Ethiopian investors build first private textile industrial park

Ethiopian investors are constructing the first private textile industrial park in Hawassa town, the regional capital of Sidama Regional State, at a cost of four billion birr, it was learnt.

The textile industrial park will have a total of 14 sheds each resting on 11,000 square meters of land. The industrial park will also have one-stop-shop service center, firefighting department, residential apartment and water treatment plant.

Established by three Ethiopian investors, the Hawassa Textile and Industrial Park S.C. has acquired the Hawassa Textile Factory for 500 million birr. The company is now constructing the new textile industrial park in the premise of the Hawassa textile factory, which has a total area of 350,000 square meter (35 hectares). The industrial park will sprawl over 250,000 sq.m of land (25 hectares). 

The Chinese construction firm, Sinoma, is the contractor ,which agreed to build the textile industry park for 89 million USD.  

The investment project will have two phases-the construction of the first private textile industrial park and the renovation of the old Hawassa textile factory.

Ahmed Abdaruf, CEO of the Hawassa Textile and Industrial Park S.C. told Origins Business that work on the construction of the industrial park commenced a year ago. Ahmed said the land preparation work has been completed adding that the footings have been built. According to him, 37 percent of the civil work has been completed.

“Shortage of cement and steel and the sky rocketing prices of these critical construction inputs have delayed the project. However, we didn’t suspend the construction,” Ahmed said.

The industrial park was initially planned to be constructed with an outlay of over 2 billion Birr investment. However, a change in the design has surged the construction cost to 4 billion Birr.

“The major work was preparation of land. Steel structure and electrical works are the remaining activities,” said Ahmed, adding, an agreement has been signed with another Chinese firm to manufacture and supply the steel structure.

“Construction of the industrial park will be completed in a year time as we did not cease our work,” he said.

Lack of financial provision is another predicament. Mr. Hiwot Tadesse, General Manager of Hawassa Textile and Industrial Park, said that the company has been financing the construction of the industrial park from its own coffer.

“Absence of finance was stemming from the National Bank of Ethiopia’s (NBE) directive, which ordered banks not to provide loans,” Hiwot said.

“Constructing such a massive project with a significant national importance with own resource is very challenging,” he said, adding, “We are hoping to secure bank loan as NBE’s directive has been lifted”.

Hiwot anticipates that construction of the industrial park could be finalized within eight months if the shortage of steel and cement as well as the loan issues are addressed.

According to Ahmed, the company has submitted a loan request to one of the leading state bank.

The investment project has an immense national contribution in terms of generating foreign currency and job creation. “Hence we hope that the bank will provide loan to the project,” said Ahmed.

Once completed, the industrial park will create jobs for 25,000 young Ethiopians.

According to Ahmed, the company has received requests from some companies which are interested in leasing shades. “We are already in talks with some garment factories,” he said.

Last week, Chinese Ambassador to Ethiopia Mr. Zhao Zhiyuan, visited the project and held discussions with officials of the Hawassa Textile and Industrial Park S.C and Sinoma. The company executives briefed the Ambassador about the overall progress on the project. 

In addition to the industrial park development project the Hawassa Textile and Industrial Park S.C is renovating the old Hawassa textile factory. The old textile machineries are being replaced with modern ones.  

According to Ahmed, the company is working to transform the old textile factory into a yarn factory. “The factory will have two lines-the first line will produce acrylic yarn while the second one will produce nylon,” he said.

Most of the first line machineries have been imported and installed in the factory. “Few machines are remaining at the Port of Djibouti. We will transport and install them and the first line will start production in a couple of months.”

Machineries for the second line are being purchased.      

The first line will have a production capacity of 7 tons of Acrylic yarn per day while the second line will daily produce 10 tons of nylon.

Ahmed said 600 million Birr will be invested to replace old machineries with new modern ones. United Bank has provided financing for the project. The textile factory plans to supply the products to local textile factories and export market.

The textile factory will create 1200 jobs. 

Ahmed said the Sidama Regional State has been very helpful.

Zenebe Legesse, Sidama Region’s Investment Bureau Head, praised the investment project.

“The investment project has a significant importance to the country,” he said.

“Financial provisions and duty-free opportunities will be facilitated for the company,” Zenebe pledges.

He says investment creates job opportunities, knowledge-transfer and generates foreign currency. “Therefore we serve investors coming to Sidama with due respect,” he concluded.