Apparel Online Bangladesh Magazine November Issue 2018 | Page 22

EXPORTER PERSPECTIVE
Despite challenges, DBL upbeat about
the future of its integrated textile &
garment facility in Ethiopia
T
he increasing production and
labour costs in all the major
manufacturing destinations including
China, Vietnam and Bangladesh have
forced many brands, retailers and even
manufacturers to look for cheaper
alternatives. Taking advantage of
the same, the sub-Saharan nation of
Ethiopia — capitalising on the African
Growth and Opportunity Act (AGOA)
and backed by a Government working
hard to attract business with tax
breaks, subsidies and cheap loans —
has emerged as a strong contender.
Encouraged by the duty benefits
for exports from the African nation
to the US market, DBL Group from
Bangladesh has become the first from
the country to set up an integrated
textile and garment factory in the
Tigray region of Ethiopia.
“We started operations in May this
year and from August, we have also
started to export…,” maintained
MA Jabbar, Managing Director of
DBL Group speaking to Apparel
Online, and further added, “But there
are a lot of challenges still.”
DBL had to train up around 1,800
people while taking in 200 more from
Bangladesh to kick start its operations
in Ethiopia.
However, even if Ethiopia is moving
faster than its continental rivals in
many aspects, there is a long road
ahead especially considering the
bottlenecks that it faces including
lack of skilled labour, logistical
issues and many more. A landlocked
country, Ethiopia’s road link with
the port in Djibouti is reportedly
outdated and congested in many
parts, leading to longer lead
times and thereby undermining
its benefits of being closer to the
European market than most of its
Asian rivals.
As per a Reuters report, it takes up
to 44 days from the time a clothing
consignment leaves the factory in
Ethiopia to when it reaches buyers
in Europe, compared to an average
28 days in Bangladesh and 21
days in China, cited a report from
the Ethiopian Textile Industry
Development Institute. It further
noted that the cost involved for the
same goes up to US $ 1,870 to export
a 40-foot container, compared to US
$ 1,290 in Bangladesh and US $ 679
in Vietnam.
“Yes it’s a landlocked country and
as such has its own shortcomings,”
accepted Jabbar.
“We started
operations in
May this year and
from August, we
have also started
to export...
Even the labour
cost is almost
similar to that
in Bangladesh.
We are however
making all the
investments with
the future in
perspective.”
– MA Jabbar
Within the continent itself, Ethiopia is
facing tough competition from the likes
of Kenya, Mauritius and Madagascar.
The country stands fifth in the tally
of sub-Saharan African countries
which export apparels to its largest
market, the USA. The first four
apparel exporters to the USA from this
part of the world are Kenya, Lesotho,
Madagascar and Mauritius, according
to an analysis by Apparel Online.
Notably, Kenya exported apparels
worth US $ 120.67 million in the first
four months of 2018 as against US
$ 101.66 million in the corresponding
period of the prior year, growing
by 18.70 per cent in just one year,
while second in the tally is Lesotho
which earned US $ 98.60 million from
its apparel export to US, posting a
noteworthy increase of 19.88 per cent
on year-on-year basis.
Markedly, Madagascar too stood far
ahead of Ethiopia in apparel exports
to the USA as the value of apparel
shipment from Madagascar was almost
double than that of Ethiopia in the
review period. Apparel exports from
Madagascar to the USA was US $ 59.10
million in the period with a whopping
25.73 per cent rise over the last year.
Even Mauritius, which stands fourth in
the tally posted 10.48 per cent growth
to reach US $ 48.19 million in apparel
export values in Jan.-Apr.’18 from
US $ 43.62 million in the same period
of 2017.
Nevertheless, it is also true that
Ethiopian apparel exports have
witnessed a massive growth of
126.63 per cent in the first four
months of 2018, which still tilts the
scale in its favour.
“Even the labour cost is almost
similar to that in Bangladesh…We are
however making all the investments
with the future in perspective,” stated
an optimistic Jabbar, and there
seems to be reason enough for his
optimism. Though an H&M facility,
DBL’s Ethiopian unit has grabbed
the attention of many other brands
including PVH, Decathlon and
Lacoste, lately.
MA Jabbar, Managing Director of DBL Group
22 Apparel Online Bangladesh | November 2018 | www.apparelresources.com
“Even the top management from
Lacoste visited our facility recently
and hopefully more buyers will
approach in the coming days,” winded
up Jabbar on a positive note.