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Low cost Ethiopia attracts investments in apparel sector

Ethiopia is fast developing into a dynamic apparel sourcing hub. China, South Korea, India and other countries have opened new plants in the nation, while a growing number of European and US brands are sourcing garments. As a part of its drive to lift the country to middle-income status by 2025, the country has been building industrial parks. The newest is Hawassa Industrial Park. Among the 15 companies with factories there is PVH, a US apparel company. PVH’s 280 employees produce garments for a number of international brands, including Calvin Klein.

Ethiopia's low labor costs make it an attractive garment sourcing destination. The country’s young, cheap workers give it the potential to grow into a major garment hub. Another factor in the country’s favor is its fast developing infrastructure. Ethiopia used to depend heavily on trucking, hindering its transition to a more export-oriented economy. But the railway connecting Addis Ababa to Djibouti will help solve this problem.

At present, most companies investing in Ethiopia are apparel makers and other light industry manufacturers. But General Electric plans to make medical equipment in the country, and Samsung is working with a local partner to produce printers. Hyundai will build a commercial vehicle assembly plant.

 
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