New opportunities for Africa as global apparel manufacturer

Thursday, 28 August 2014
The question of how long China will remain the largest clothing manufacturer continues to linger on. Not only does the country have to contend with increasing competition from neighboring countries such as Bangladesh, India and Vietnam, but also with the growing appeal from countries in Africa as well.

This African allure is increasingly attractive to retailers, especially to large American apparel companies such as VF Corp. and PVH Corp. This appeal is partly thanks to the African Growth and Opportunity Act (AGOA), which ensures that garments produced in over 45 African countries do not have to pay import duties in the US. More so, these products are not subject to the textile quota, even if the raw material used to make the garment, such as cotton, comes from another place, similar to garments manufactured in China, reports Apparel News.

“Africa is prime and ready to go,” said chief supply-chain officer for PVH Corp., Bill McRaith, parent company of labels such as Tommy Hilfiger and Calvin Klein. The company is said to have made a 20 year commitment to the country and has its sights set on vertical operations and ethically responsible factories. According to McRaith, manufacturing costs are low in Africa, as low as in Asia, but the pace of production is also lower. PVH Corp. currently produces clothing in Lesotho and Kenya, and is set to take the next step into a more vertical model which includes the company using African cotton to produce its garments.

Clothing manufacturing in China continues to become more costly

The production of clothing and textiles in China has become more expensive in recent years, as prices and wages continue to increase in the country. 41 percent of all imported clothing in the US still comes from China. However, import quotas and import taxes still apply to apparel imported from China, which makes the products more expensive in the US and affects company margins.

But its is not just American clothing companies who have their eye on production in Africa at the moment, according to McRaith. European fast-fashion retailers have also set their sights on African manufacturing. “The beauty of Africa is low cost.” Fashion companies, such as H&M, Tesco and Primark are producing clothing in Ethiopia at the moment, as the monthly livable wage for apparel workers is around 100 dollars a month. Ethiopia is also known for its cheap energy, which is generated by geothermal and hydroelectric sources, which makes the cost for electricity in the country one-fifth of that in China.

Madagascar is another country which is growing increasingly attractive for overseas companies to produce garments from, as well as Benin, Lesotho, Rwanda, Senegal and Tanzania. However, one of the disadvantages to manufacturing in these countries is that there is little control on the working conditions which factory workers are subjected to. Although minimum wages do apply in this region, an organization like Fair Wear Foundation has yet to become active. The Max Havelaar Foundation, also known as the dutch member of FLO International which unites 23 Fair trade producers across the world, reports that there are no requirements for working conditions for clothing factories in West Africa currently in place.

Although attention to humane and environmental friendly production in Africa may still be in its infancy at the moment, it does not mean that there is nothing being done to ensure all manufacturing to carried out under fair circumstances. Liberty and Justice is a sterling example of a textile manufacturer who has all stages well regulated. The company has factories in Ghana and Libya and is the first fair trade certified clothing manufacturer in Africa, receiving five stars from GIIRS, the international standard for sustainable investment. Liberty and Justice tend to take on local women who have difficultly finding employment and claim to pay 20 percent higher wages than other clothing factories in the area. The company has set up a network of factories in several African countries, known as 'Made in Africa' for which the same standards apply.

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