Ethiopia: Chinese Firm Ploughes $70m Into Textile Plant

Kingdom (Ethiopia) Linen Plc is building a large plant in Adama for 200 million dollars

Kingdom (Ethiopia) Linen's yarn factory is expected to be operational after two months.

A Chinese company set up a new export-oriented yarn plant in Adama, Oromia Regional State, with an investment of 70 million dollars.

Kingdom (Ethiopia) Linen Plc built the integrated plant on 2.9ha of land and plans to produce 5,000tn of linen yarn annually, generating 45 million dollars from exports.

The company is constructing the plant in three phases on 32ha of land for a total of 200 million dollars. The first phase of the project is underway for 70 million dollars on 12ha of land designed for sheds and administrative buildings.

The first phase of the construction of the plant, which is expected to begin trial production after two months, started in mid-2018, and all major construction for the first phase was completed in July of this year. All the equipment used for the construction of the plant was imported from Italy and China.

When becoming fully operational, the total production capacity of the plant will be 20,000tn, four times the first phase level, and will employ 4,500 people.

The company will be exporting its products to the Kingdom's existing clients in Italy, Portugal and India, according to Chan Zhang, deputy general manager of Kingdom (Ethiopia).

"Instead of using the government's standard sheds, Kingdom built its factory to its tailored specification," she adds.

IT Electronics Eleventh Design & Research Institute Scientific & Technological Engineering Corporation Limited, a company engaged in engineering consultation, design and general contracting, is the contractor for the project. Shanghai TJU Engineering Service Co., Ltd, a Chinese company specialised in construction project supervision for industrial assets, is supervising the construction of the plant.

The company is also partnering with Adama Polytechnic College to provide an apprenticeship programme for their students during the machine installation, according to Chan.

Founded in 1999 and listed on the Hong Kong Stock Exchange in 2006, Kingdom currently has four production factories and an organic flax raw material production base in China with more than 3,000 employees. Kingdom's total annual production capacity of linen yarn in China has reached 18,000tn, and the company now shares over 10pc of the global linen yarn market.

Kingdom Ethiopia will join the 1,345 textile, apparel, garment and leather industry projects registered by the Ethiopian Investment Commission and the regional investment bureaus. Out of the total companies, only 16pc of them are operational, while the remaining are at the implementation and pre-implementation stages.

Last year, the country generated 110 million dollars from the export of textile products, meeting only 46pc of the goal. Shortages of cotton, lack of trained employees and instability in some parts of the country were the causes for the shortfall.

Abera Kechi (PhD), Ethiopian Institute of Textile & Fashion Technology Scientific Director at Bahir Dar University, believes that besides transferring technological advancement and creating job opportunities, it will generate forex for the country and increase the competency of Ethiopian products in the international market.

He also suggests that the shortage of electric power supply and the culture of labour will be a challenge for the company.

"To motivate the employees to be more productive, they will have to pay a relatively good salary," Abera said.

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