Tirupur-based knitwear industrialists are visiting Ethiopia to analyze the prospects of making investments in the African country. The Tirupur cluster is witnessing an increase in production and operation costs. Many established players are looking for expansion opportunities and Ethiopia offers investment opportunities. With that, they can improve their market shares. Ethiopia offers advantages including cheap labor, ready-to-use sheds, income tax breaks and training subsidies and offers tax-free gateways into the US, Europe and China. From Ethiopia exporters can ship garments without duty to these two major markets.
In Ethiopia, Tirupur units hope to concentrate on producing bulk quantities of basic styles of garments rather than tough styles. Besides the labor cost, which is 50 per cent lower compared to India, another big advantage in Ethiopia is that land and building are readily available. So it is just a plug and play model with cheap power.
Indian textile mills are also setting base in Ethiopia. KPR Mills from Tirupur has started a unit in Ethiopia. Other prominent textile players to have followed suit are Raymond, Arvind, Best Corporation and JJ Mills. KPR has invested in a capacity of ten million units, providing employment for nearly 1000 people. Raymond’s plant in Ethiopia has a capacity of two million jackets.