Currently, there are around six apparel manufacturers from India who are successfully running factories in Ethiopia. However, this number is growing as Ethiopia is offering lucrative benefits to the investors besides strategic advantages. At the same time, there are many apparel exporters who are not too impressed with this emerging apparel manufacturing hub.
Having more than 950 machines in Noida and a turnover of more than Rs. 40 crore, Pooja International specializes in kidswear and womenswear manufacturing. The company’s top management explored Ethiopia sometime ago but did not have a positive takeaway. Rajat Kumar, the company’s CEO, who spent a month over there, told Apparel Resources, “If you keep running to a low-cost area, where will they go after 5 years? The same is happening in Ethiopia. Everything was done from our side. Then we saw the ground reality. Nearly for three weeks, they don’t issue containers neither outgoing and nor incoming container.”
Rajat went to a training centre and was shocked to see the working atmosphere. Most of the workers and trainees there, don’t even know how to use wash rooms. “It will take somewhere around 2 months to develop soft skills in them. So, entire training period for one worker takes around 5 months in Ethiopia,” informed Rajat. He further added that training cost is massive there. “If your factory is running on 39 per cent capacity then the buyers will not give you prices according to your capacity. The production gap is also going from your own pocket. Addis Ababa still has some infrastructure but there is no proper airport in cities like Mekelle, Hawassa, so India is by far the best country for us,” shared Rajat.
“Export might rise by having a factory there but to survive the factory must have at least Rs. 1000 crore turnover. So, it is viable for only a few big exporters,” he concluded.
Hello Rajat Sir,
Instead you should invest in Jharkhand Ranchi. I can help you with resources there. I believe investment cost will be less there when compared to Ethopia.
Thanks