1. Preparing for export: A project proposal from VSO September 2014

2. Background VSO working at Kombolcha Institute of Technology (KiOT) Linking KiOT with local industry To improve teaching through industrial experience To facilitate education of employment-ready graduates Opportunity spotted to assist Kombolcha Textile Share Company Marketing development to achieve high-added-value exports Building on previous investment in plant and machinery

3. Initial analysis 3 main stakeholders: Kombolcha Textile Share Company (KTSC) Kombolcha Institute of Technology (KiOT) Ethiopian Government

4. Initial analysis: KTSC Issues Massive investment already made Under-utilisation of resources Domestic market: Products yield low returns Exports: Smaller market penetration than desired Low added value items (yarn) dominate No benefit of vertical integration All impact profitability and ROI Drivers Need to add sales which: * Benefit from vertical integration * Are profitable * Are sustainable These factors indicate development of high-added- value exports

5. Initial analysis: KiOT Issues Low levels of resources…but good people Engineering academic staff: low levels of industrial experience Need to build industrial experience to add quality to teaching Improve graduate employability With manufacturing/industrial understanding Need to develop a research focus To attract best students and retain best staff To enable links with international academic institutions Drivers Work in collaboration with industry Establish meaningful links with mutual benefits Start with KTSC Keen to explore areas of mutual assistance Development of a Centre of Excellence: Proposed manufacturing advisory service focusing on preparation for high-added- value exports

6. Initial analysis: Government Issues Need to achieve higher levels of export to meet GTP projections Hard currency inbound flows Balance of payments Achieve successful sale of KTSC ROI Development of employment opportunities In line with national policy of industrialisation Particularly quality employment for youth and young adults Drivers Increase hard currency revenues through development of exports Export order book improve likelihood of sales of KTSC Development of export volumes could drive employment Aim to support initiatives that drive the development of exports, particularly high- added-value exports wherever possible

7. Stage1 Initial pilot project

8. Stage 1: initial pilot project To develop a collaborative team between VSO, KTSC and KiOT in order to: Evaluate market opportunities and establish market contacts Start from potential customers’ perspective Establish requirements of potential export customers Not just product specification Analyse KTSC activities in the light of these requirements Advise KTSC on a plan to meet these requirements Assist in implementation of the plan

9. Stage 1: initial pilot project May 2014Agreement between KTSC and KiOT June 2014Collaborative team begins August 2014First major report back to KTSC Next steps now under review For summary of activities to date see separate document

10. Stage 1: initial pilot project Current status: Extensive advice and support received from UK and international companies Using networking capabilities of VSO volunteers Evaluation against ethical audit requirements completed Recommendations made; next steps under review with management Aim to be ready for ethical pre-audit within 3-4 months Evaluation against technical audit requirements underway Aim to be ready for technical pre-audit within 4-6 months (or sooner)

11. Stage 1: initial pilot project Current status: KTSC samples evaluated by major UK companies Encouraging results, particularly for terry towelling UK samples received and examined Matching work being undertaken Preliminary enquiries made about possible sources of sustainable cotton Needs more research and understanding

12. Stage 1: initial pilot project Next steps Continue working towards ethical and technical audits Matching UK samples research to be carried out Fineness of yarn Density of weave Quality of finish Finishes and treatments Work starting to look at how to standardise finishing and achieve consistency of final product

13. Stage 1: initial pilot project Overall stage 1 aim 1.Start developing active sales strategy and pitch plan within 6 months to achieve exports of high-added- value items 2.Apply learning to current product ranges to improve penetration in domestic market

14. Stage 1: initial pilot project Ongoing benefits already accruing Company: improved market understanding process control risk assessment methods and application Workforce: health & safety Existing products:quality of finish KiOT members:developing industry experience Practical application of academic knowledge

15. Stage 2 Scaling up

16. Stage 2: scaling up Target date Q1/2 2015 With a focus on enabling the Ethiopian textile industry to maximise high-added-value exports Using the experience from KTSC pilot study, develop a protocol and method of approach based on target market requirements that can be applied across textile facilities Flat linen, apparel etc Formalise the establishment of the manufacturing advisory team on a long-term basis To apply the protocol To act as industry advisors

17. Stage 3 Replication

18. Stage 3: replicating Target date Q2/3 2015 Aim of Stage 3: to replicate the industry-university collaborative approach for other industries where added-value exports or improved manufacturing and industrial standards are sought Using the experience from KTSC pilot study and the developed protocol What we have learned about the textile export market requirements is NOT INDUSTRY-SPECIFIC Example of possible industries: leather products, coffee, steel, furniture

19. Stage 3: replicating Target date Q2/3 2015 The university project partners: For each industry, an Institute of Technology geographically placed in an area with close links with the industry. Develop a collaborative network of these IOTs Share ideas, experience, resources A focus for developing university industrial experience Staff motivation, quality of teaching, retention of best staff, opportunity for research Produce students with better understanding of manufacturing: INCREASED EMPLOYABILITY

20. Stage 3: replicating Target date Q2/3 2015 The manufacturing project partners: Access academic support from partners who have knowledge of target market approaches No need to reinvent the wheel Develop a collaborative network of manufacturing partners Share ideas, experience, resources Increasing requirement for skilled engineers and technicians Through the accrued benefits of the projects, have access to employment-ready graduates equipped to understand engineering in the manufacturing context

21. Stage 3: replicating Target date Q2/3 2015 The VSO project partner: VSO propose supporting each industry project development with experienced volunteers Experienced in international markets Significant potential across many industrial sectors

22. Stage 3: spin offs 2015 onwards Issues that are being encountered in companies all over Ethiopia E.g. large stockpiles of fluorescent tubes; cannot be treated as general waste (ISO14001). Possible spin off industrial development proposals e.g. Fluorescent tube recycling Battery recycling Industrial waste water reprocessing and conservation