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Is Africa The Final Frontier For Global Clothing Brands?

Is Africa The Final Frontier For Global Clothing Brands?

The Clothing business is not easy and that is why global clothing brands like H&M, Calvin Klein and Tommy Hilfiger are constantly searching for cheaper supply markets.

For a long while these brands have looked to outsource their production to countries in Asia such as Bangladesh, Sri Lanka and India, but with rising minimum wage demand and other misfortunate events in these markets, they are now obliged to look for other source markets and Africa is turning out to be the next best alternative.

According to the World Labor Organization, the minimum wage in Bangladesh is at least $67 per month. This is three times the amount Ethiopia’s garment sector, which has no minimum wage pay its workers.

With most countries in Africa that produce their own cotton benefiting from the just renewed free-trade agreement with the US, under the Africa Growth and Opportunity Act (AGOA), the region is quickly becoming too attractive for these brands to over look.

The ability to grow their own cotton shortens the production period, which explains why US retail chains such as Walmart are increasingly stocking trousers made in Ghana.

AGOA has had a positive impact on sub-Saharan Africa’s clothing industry and is an important part of the reason why textile plants have started opening across the region, Wall Street Journal reports.

“In the global economy, light manufacturing is constantly moving,” Guang Chen, the immediate former World Bank’s country director for Ethiopia, told Wall Street Journal.

“We see the possibility of this kind of industry moving away from Asia, because the labor cost is rising in China rapidly.”

Ethiopia, a country with deep cultural heritage and a rich fashion sense, has for long only been appreciated locally, but with a world known super model and century old textile industry the country is popping on the global fashion radar.

Several local fashion designers, such as Yefikir Design a brain child of local fashion designer Fikirte Addis, are flourishing on the international markets, building on the demand for African made wears globally.

“Africa is a huge opportunity to demonstrate how the industry can work together,” Colin Browne, managing director of product supply and Asian sourcing for VF Corp., which owns such brands as Lee, Wrangler and Timberland, said last year during a meeting with his top Asian apparel suppliers.

In an effort to accelerate the move to Africa, VF has teamed up with it biggest rival PVH and invited their best 20 suppliers from Asian countries like China, India and Sri Lanka on a tour across the continent to show them the need to invest in apparel factories on the continent.

Ethiopia, which recently commissioned a $250 million industrial part at Bole Lemmi that’s exclusively for foreign investors in the garment sector, stood out as one of the best destination for these suppliers.

“Ethiopia seems to be the best location from a government, labor and power point of view,” M. Raghuraman, chief executive for corporate marketing and branding at Sri Lanka’s largest clothing exporter Brandix Lanka Ltd., told Wall Street Journal.