11 September 2017

Rwanda: Chinese Firm to Set Up Textile Factory in Rwanda

Rwanda Development Board (RDB) has signed a memorandum of understanding (MoU) with Huajian Group, a Chinese business and investment company specialising in shoe manufacturing.

Huajian Group is owned by Zhang Huarong and it mainly specialises in production of high- and middle-end women's shoes with three production bases, including one in Ethiopia.

Yesterday's agreement is part of the company's expansion plans in East Africa.

"Zhang Huarong has invested in Ethiopia and now produce shoes worth over $30 million. His success has shown him that Africa is a place where you can make high quality exports for products consumed by markets like in the US," said Clare Akamanzi, the RDB chief executive.

"He has done his homework and has seen that Rwanda is one of the most attractive places to do business, and he wants his next factory to be in Rwanda serving as centre for East Africa."

The agreement will see the company establish a factory that will be producing shoes, clothes, bags as well as electronic equipment.

According to Zhang, his company's plan is to invest over $1 billion for the next 10 years and create over 20,000 jobs.

"For the past three days, I have developed a feeling that Rwanda is much like any European country because there's high efficient government with proper management," he said.

Zhang expressed confidence about his future investment in Rwanda as he believes the country's development strategy is quite similar to China's.

"Rwanda's development strategy is similar to China's strategy in producing high end products and increasing exports. Politics is steady, the leadership of this Government is efficient," he said.

Zhang is interested in investing in electronics and IT development, creating jobs and boosting Made-in-Rwanda exports. He also plans to produce cell phones, air conditioners and computers.

He said he was inspired to invest in Africa by the likes of Li Yong, the director-general of the United Nations Industrial Development Organisation (UNIDO), and Justin Yifu Lin, the former World Bank chief economist and senior vice-president for development economics, both of whom are Chinese.

According to RDB officials, the Government has already availed land at the Kigali Special Economic Zone and they believe Zhang's investment will contribute to export diversification, which is in line with the country's vision.

"We are confident that Zhang's commitment to invest in Rwanda will diversify and improve exports of finished products," Akamanzi said.

Factory to be up in April

In April, Zhang said, they expect to have put up the manufacturing plant, and that they plan to train about 200 Rwandans before the end of the year.

He highlighted plans to invest and build five light industrial parks in the developing countries of Africa in the next 10 years, producing and processing clothing, shoes and hats, bags and suitcases, electronics and other light industrial products, and will in the process provide 100,000 job opportunities.

Huajian Group joins a list of other Chinese companies in textile sector operating in the country one of which is C&H Garments Factory, which is one of the country's fastest growing textiles firms currently making police uniforms, safety vests, and most recently military kit.

In the last six years (2011-16), Rwanda has witnessed an unprecedented number of Chinese investments especially in the areas of tourism, ICT, construction, agriculture, manufacturing and infrastructural development.

The total estimated amount of Chinese investments registered in Rwanda is equivalent to $103 million, according to RDB. The total jobs registered from these investments is 5,425.

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