5 February 2007

Uganda: Another Local Firm to Sell Garments to the U.S.

Kampala — All is not lost for Uganda under the Africa Growth and Opportunity Act (AGOA).

Phenix Logistics, a local Ugandan garment maker has just received its first order to export apparel to the US from Edun Live, a high end brand owned by rock star and pro-Africa activist, Bono and his wife, Ms Ali Hewson.

The exports to America are under the AGOA that was signed into law in May 2000. AGOA provides for duty-free access to the US market for virtually all products.

Thirty-seven of the 48 sub-Saharan African countries are eligible for benefits under the AGOA.

According to top industry sources, Phenix will ship two orders of 50 tonnes each this February and thereafter 20 tonnes per month from then on.

The garments will be 100% Ugandan. Phenix managing director, Mr Yuichi Kashiwada was not available to comment on the money worth of the scheduled garment exports.

The global demand for organic cotton products is growing at 35% annually and Uganda is well positioned to become a major player in the market.

Uganda's 2005 exports under AGOA were valued at $4.9 million, representing 19% of total Ugandan exports to the United States.

Apparel manufacturing accounted for most of this trade. In February 2006 Uganda exported its first shipment of cut flowers to the United States still under AGOA.

Phenix becomes the second firm to venture into the American market after Apparel Tri Star located in Bugolobi, about three kilometres out of Kampala.

The Apparel Tri Star factory has in the recent months been hit by controversy over mismanagement and reported misuse of government cash grants and tax breaks.

The possibility and realisation of Africa's growth potential through exports to America is being championed by the Whitaker Group. The Group headed by Ms Rosa Whitaker is a premier US consulting firm that facilitates trade, investment and commerce in Africa.

"Showing Uganda's strength in this sector to such well known brands such as Edun and Woolworths will only open the floodgates of interest. The organic cotton sector has the potential to be a strong driver of economic growth for Uganda," said Whitaker at a press briefing in Kampala last week. Whitaker said the American market still awaits increased quality output from Africa.

The Whitaker Group and the Uganda AGOA office have been working to build a successful niche apparel industry in Uganda upon organic cotton's growing popularity in the US and the duty free benefits Uganda receives in the US under the AGOA.

Last week, Whitaker, Belinda Edmonds and Chris Wynn-Pots from Cool Ideas Ltd, an apparel sourcing firm from South Africa met Ugandan president Yoweri Museveni in a follow up trip to the Apparel Trade mission brought by the Whitaker Group in August 2006. The delegation also included Woolworths, a large South African garment retailer that is also the largest in Africa.

Since its inception in 2000, AGOA has helped increase U.S. two-way trade with sub-Saharan Africa by 115%.

In 2005, US total exports to sub-Saharan Africa rose 22% from 2004, to $10.3 billion. US total imports from Africa increased by 40% to $50.3 billion. In 2005, over 98% of US imports from AGOA-eligible countries entered the United States duty-free.

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