In a bid to meet the government's ambitious plan of collecting 500 million dollars from the textile sector in the current fiscal year, 58 additional mid-level textile companies joined the export sector this September.
In addition to the 58 mid-level factories, which come on top of the existing 110, the Ethiopian Textile Industry Development Institute (TIDI) is aspiring to open six new factories and expand four others, in order to meet the target.
The recent move by the TIDI aims to boost export revenue from the textile sector. Currently, it is functioning at around 50pc of its production capacity, whilst generating 43pc of the exports in the manufacturing sector.
The TIDI estimates that textile factories inEthiopiawork at only 54pc of their total production capacity. The country exported close to 10,000tns of textile and garments during the last fiscal year.
"We are planning to utilise 84pc of the production capacity in every factory by the end of the current fiscal year, " Bantihun Gessesse, acting corporate communication director at the TIDI, told Fortune.
In the manufacturing sector, textile and garments are one of the major areas of focus in the Growth & Transformation Plan (GTP). This aims to increase export earnings up to one billion dollars by the end of 2014/15 fiscal year.
In the last three years, however, the sector has only brought in 244.6 million dollars; 59pc short of the planned 600 million dollars.
"Although the goal is very ambitious, we are working at fulfilling our potential to achieve it," said Bantihun. "We are pushing large textile factories to produce at their maximum potential."
The Institute, established four years ago to facilitate the country's transition to an industry-based economy, aims to increase the number of high level textile factories to 48. In doing so, it will create 40,000 new job opportunities by the end of the GTP period.
Despite its shortcomings, the sector is starting to progress, according to Bantihun.
According to the current fiscal year's two-month export review, close to 20 million dollars has been obtained so far. This is 56pc higher than the 13.2 million dollars recorded over the same period last year.
For the former employee of a state owned textile company, who is currently a private consultant, however, the inclusion of additional mid-level factories will not be the solution to boost and achieve the target set by the government.
"Even if these additional factories produce at their maximum capacity, they can only increase the volume of export by 3,000tns," the consultant told Fortune anonymously.
What matters the most is minimising the problem related to finance and the low quality and poor availability of raw materials, according to the expert.
By doing this, the government can double the volume of textile exports and maintain quality. This is vital for reaching international markets, according to the expert.
A manager of one of the private textile companies, which has been operating in the country for the last seven years, also agrees with the expert's opinion.
"Producing textile products with a high cost of inputs and weak infrastructure is a challenge for my company," he claimed. "This is decreasing the export volume over time."
His company imports raw materials to process in the factory fromChinaandPakistan. The factory is capable of producing 1,000 trousers a day, but currently producing just 100 trousers.
Currently, the number of workers employed in the factory stands at 100. This is a quarter of the staff required if it is to produce at its full capacity.
The manager of the textile factory is not pleased with the quality and quantity of cotton on offer either.
"The linkage between the raw materials, such as cotton, and the textile sector is not properly monitored," he added.
Understanding the weak linkage between the two sub sectors, the government amended the establishment proclamation of the TIDI, in order to put the mandatory role of cotton under the Institution.
The Institute currently plans to implement international best practices in 12 textile factories, in order to overcome leadership inefficiencies, weak financial management, machinery maintenance and the handling of raw material shortages, said Bantihun.