Apr 13 , 2019
By TEMESGEN MULUGETA ( FORTUNE STAFF WRITER )
Nasa Garment Plc has become the 23rd company to join the nation's flagship industrial park in Hawassa after investing five million dollars.
A local company, Nasa Garment will be manufacturing shirts, trousers and sweaters from its factory inside the Hawassa Industrial Park, 285Km south of the capital. The company leased a 5,500Sqm shed on March 1, 2019.
Currently, the company is waiting for letters of credit (LC) from the Commercial Bank of Ethiopia (CBE) to import machinery from Japan, Germany, France, India and China.
Owned by two brothers Saron and Goitom Afework, the company will have a production capacity of 30,000 pieces a day and will hire 1,100 employees at full capacity.
The owners are expecting the installation of machines to be finalised by June 2019 and to start production by September 2019. The company plans to export its products to the United Kingdom and to Los Angeles in the United States.
The company has also begun the process for a six-million-dollar expansion and has requested two additional sheds, according to Raghav Pattar, CEO of the company.
Nasa Garment will be joining 139 companies registered to manufacture textile and garment products in Ethiopia. In the first half of this fiscal year, the garment industry generated 12.9 million dollars from exports, which accounts for only one percent of the total 1.21 billion dollars the country earned from overall exports during the same period.
"We are also planning to open a garment buying house [a mediator between retailers and clothing manufacturers or export houses] in Addis Abeba," Pattar told Fortune.
Hawassa Industrial Park, one of the 11 parks constructed by the state-owned Industrial Parks Development Corporation for an estimated cost of 30 billion Br. Hawassa hosts 23 local and international companies, which are now generating four million dollars a month from exports.
So far, the government has completed the construction of seven parks, while five - Hawassa, Bole Lemi I, Kombolcha, Meqelle and Adama industrial parks - are already operational and generate 85 million dollars from exports in the last fiscal year.
Located in Hawassa, the seat of the Southern Nations, Nationalities & Peoples' Regional State, the Park encompasses an area of 410,000Sqm, of which the sheds take up 300,000Sqm. The Park hosts 52 sheds that were constructed by China Civil Engineering Corporation in 2016 and designated for textile and apparel manufacturing, creating job opportunities for 24,000 peoples.
In addition to the government-owned parks, the country also has six privately-owned operational industrial parks with one more still under construction.
To increase foreign direct investment to industrial parks, an economist with decades of experience recommends the government make some policy adjustments.
Shortage of electric power supply, foreign exchange to import raw materials and bureaucratic administrative processes, has to be improved by the government, according to Ali Yibrie (PhD), a lecturer at Bahir Dar University's College of Business & Economics.
"Most of the parks including Bahir Dar, Dire Dawa and Kombolcha couldn't attract adequate investment to date," said Ali. "The government has to draw a lesson from this."
Recently, the National Bank of Ethiopia issued a new directive allowing companies operating in industrial parks to transact in foreign currency, while selling and buying raw materials with each other.
UPDATE: This story was edited on April 9, 2020, to correct that the company is fully owned by local business people and the LC was pending at CBE.
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