1. Holistic View of Textile Value Chain of Africa
Rajeev Arora
Executive Director
African Cotton & Textile Industries Federation /

2. COTTON TRADE WORLD VS AFRICA
2011/12
Million tons
2012/13
2013/14
Million tons (projected)
World Production
28.042
26.684
25.63
Africa’s Share
5.6%
5.4%
6.0%
World Consumption
22.789
23.291
23.48
1.3%
1.5%
1.6%
World Imports
9.759
9.867
8.81
1.4%
1.7%
2.4%
World Exports
9.870
10.078
11.0%
12.6%
15.4%
Source ICAC June 2014

3. Supply & Use of Cotton Status in africa Region Imports 2013/14 Prod
Cons
Exports
North Africa
119
154
184 87
Francophone Africa
902
n/a 17
892
Southern Africa
506 59
164
404
World
25,628
8,811
23,461
000 Metric Tons
Source: ICAC June 2014,

4. World Cotton Million tons Lower cotton prices ahead Production
Mill Use
Lower cotton prices ahead
January

5. Supply & Use of Cotton Status in africa Region Imports 2018/19 Prod
Cons
Exports
North Africa
120
200
280 40
Francophone Africa
1,200
n/a 25
1,175
Southern Africa
680 70
260
500
World
28,000
9,000
000 Metric Tons
Source: Forecasts by Terry Townsend, ACTIF Consultant

6. AGOA OPPORTUNITY
Total imports of textile & apparel products by USA stood at US$ 101Bn (Source: OTEXA, 2012)
SSA enjoys Duty free Quota free access into US for Garment exports under AGOA
Total U.S. Apparel imports from Africa under AGOA US$ 864 Million (0.8%) (Source: ACT, 2012)

7. EPA OPPORTUNITY
Africa enjoys duty free Quota free access into EU for Textile products through the Economic Partnership Agreement (EPA)
Total imports of textile & apparel products by EU stood at US$ 234Bn. (2012)
Total EU textile and apparel imports from Africa stood at US$ 9.3 Bn (4%)
Source: ITC calculations based on UN Comtrade

8. KEY CONSTRAINTS AFFECTING VALUE ADDITION
Lack of conducive policy environment for Textile Investments
High operating costs due to obsolete technology & equipment among others
High competition from dumping pricing from Asia
Poor infrastructure and poor connectivity / logistics
Reliance on expatriate workforce for technical support
High costs of doing business

9. KEY CONSTRAINTS AFFECTING VALUE ADDITION
Lack of political commitment for sustainable policies to bring FDI
Porous borders leading to dumping and smuggling
Second hand clothing
No anti dumping policies and to check cheap import.
Copyright infringement
High cost of finance

10. ROLE OF ACTIF
Foreign Direct Investments(FDI): ACTIF explores investment in the cotton textile & apparel value chain in Africa, including developing due diligence and match making for JV’s
B2B Linkages: ACTIF facilitates Business to Business linkages with member countries
Access to Information: ACTIF provides information access including reports and special studies for national policies and strategies
Market access: ACTIF actively develops linkages with member countries and regional economic communities (RECs) like EAC, COMESA, SADC

11. ROLE OF ACTIF
Policy & Advocacy: ACTIF is very active in advocacy activities in partnership with its members and partners to improve the policy environment across the region
COMESA CtC Strategy: ACTIF has been recognized as the private sector representative for the implementation of the COMESA Cotton to Clothing strategy. With support of our funding partners, ACTIF has developed an priority implementation plan from the strategy and is currently monitoring the implementation activities;

12. TEXTILE VALUE CHAIN : VIEW OF ETHIOPIA & KENYA
BCI VALUE ADDITION PROJECT
TEXTILE VALUE CHAIN : VIEW OF ETHIOPIA & KENYA

13. ETHIOPIA: POLICY REFORMS LEADS TO TEXTILE INVESTMENTS
Low cost of power – 5 US$
Availability of trainable, educated cheap labour
Provision of fiscal and non fiscal incentives
Tax holidays;
Amortization of investment before tax;
Soft loans on local investors up to 90% and foreign investors up to 70%;
Abundant arable land available for cotton production;
Availability of cheap water;
Easy access to land on a lease fee ranging from 0 to 3USD/m2 in regional states for a lease period of years depending on the specific investment location.
Availability of Industrial zones with ready to operate shells;
Technical support [expatriates] at no tax;
Investments are constitutionally and by law (of Multilateral Investment Guarantee Agency of the World Bank) guaranteed of non commercial risks.

14. COTTON MILL USE IN ETHIOPIA INCREASING WITH GROWING TEXTILE INVESTMENTS
Thousand metric tons lint
Northern Africa
Other SSA Countries
Franc Zone
Ethiopia
Source: ICAC

15. KEY ADVANTAGES IN ETHIOPIA
Low cost of power – 5 US$
Availability of trainable, educated cheap labour
Provision of fiscal and non fiscal incentives
Tax holidays;
Amortization of investment before tax;
Soft loans on local investors up to 90% and foreign investors up to 70%;
Abundant arable land available for cotton production;
Availability of cheap water;
Easy access to land on a lease fee ranging from 0 to 3USD/m2 in regional states for a lease period of years depending on the specific investment location.
Availability of Industrial zones with ready to operate shells;
Technical support [expatriates] at no tax;
Investments are constitutionally and by law (of Multilateral Investment Guarantee Agency of the World Bank) guaranteed of non commercial risks.

16. Kenya: the leading apparel exporter from africa under agoa

17. KENYA: VALUE ADDITION ACTIVITIES
The government, under the Ministry of Industrialization & Enterprise development has placed the Textile Industry among its top 3 priority sectors. Impact so far:
Power Cost is now being subsided for Textile & Apparel Industries;
Government is aggressively marketing the country for Textile Investments;
Better Cotton Initiative Value Addition – A Niche Project for developing a full value chain project from Cotton farming under BCI to EU Market for finished garments. This project is the first of its kind in Africa and has the potential to be replicated in other countries;

18. OVERALL OBJECTIVE
Niche production of cotton via Better Cotton Initiative provides an opportunity to engage cotton farmers in a sustainable model of cotton production. The production activities are already under way spearheaded by the Fibre Directorate [Formerly CODA], supported by Solidaridad;
The overall objective of this project is to develop a full value chain project in Kenya, in collaborations with various institutions and support partners regionally and internationally;
The collaborations are targeting value addition of the certified BCI cotton up to finished garments and linkage to market in EU;
This project is the first of its kind in Africa;

19. SPECIFIC OBJECTIVES
Improve the livelihoods of cotton farmers: The project involves working with a selected group of farmers that will ensure maximum socio economic impact to them and their households.; 
Sustainable production: This project will emphasize sustainable production practices across the value chain, a concept that is growing in demand and practice in the modern world today; 
Value Addition: The cotton produced in this project will be processed into high valued finished garments, thereby creating jobs and increasing earnings within the region as compared to sale of raw cotton; 
Access to market: This project will enable the producers to access high valued end markets in response to the growing demand in Europe for sustainable cotton products.

20. Phase 3: Phase 1: Phase 2: Production & Ginning
Spinning, Knitting, Weaving
Phase 3:
Apparel Production & Marketing

21. PHASE 1 Salawa Ginnery PPP Model Cotton Farming Ginning Marketing
Targeting 5000 farmers
Training activities
Ginning
Certification & Training
Upgrade for efficiency
Marketing
Link to Certified Spinners
Local & International markets
PPP Model
Salawa
Ginnery

22. PHASE 2 & 3: VALUE ADDITION
Spinning
Certification
Technology Upgrade
Optimization
Knitting & Weaving
Dyeing & Finishing
BCI Membership
Design
Link to local and international sourcing
Apparel Production
Certification
Optimization
Promotion & Marketing
Local & International markets

23. VALUE ADDITION ACTIVITIES
Overall Project Lead: To develop linkages &
coordinate project implementation
Consultancy: Technical Assistance on
Value Addition for Textile & Garment Companies
Consultancy: Technical Assistance in
Marketing and Linkages to EU Retailers & Brands

24. VALUE ADDITION SUPPORT PARTNER

25. CAPTURING VALUE ADDITION
Value Addition x 10 times which can create 9 million jobs if 100% value is added to current African lint
Fibre
1 Kg
0.7 US$
0.5 person
Yarn
0.75 Kg
3.40 US$
0.75 person
Fabric
3.35Mtr
8.5 US$
2.0 persons
Garment
2 Trousers
15.50 US$
4.0 persons
Retail
38.80 US$

26. Changing Perceptions, Building Synergy & Doing Business
Origin Africa
Hosting
‘Africa Sourcing and Fashion Week’
21st – 23rd October 2015, Addis Ababa / Ethiopia
Changing Perceptions, Building Synergy & Doing Business