Origin Africa highlights apparel sourcing ambitions

By Jozef de Koster for Just Style Magazine

Last year all eyes at Origin Africa were on host country Ethiopia as an emerging sourcing hub for international apparel groups. This year attention switched to the return of Madagascar to the apparel export stage, with the island nation off the southeast coast of Africa bouncing back after the US reinstated its AGOA (African Growth and Opportunity Act) beneficiary status in 2014.

The sixth and latest edition of Origin Africa attracted 180 exhibitors from 25 countries to Antananarivo, the capital of Madagascar, earlier this month.

The goal of this annual pan-African cotton, textile and apparel event is to focus worldwide attention on sub-Saharan Africa both as an investment and sourcing destination, helping to grow trade between African producers and international markets providing predominantly private label production.

And the timing comes as interest in sourcing from Africa is at an all-time high, with the region set to play an increasingly important role in the textile, apparel and footwear industry over the next decade.

This year’s host country Madagascar currently sits in fourth place behind Mauritius, Lesotho and Kenya when it comes to utilising AGOA trade preferences for exports to the US. The value of its apparel exports to the US surged 162% year-on-year to $48.98m in 2015, and so far in the first nine months of 2016 has reached almost double this amount at $90.16m.

Jaswinder Bedi, the chairman of ACTIF (African Cotton and Textile Industries Federation), which hosted the Origin Africa 2016 event along with the Madagascar Export Processing Zone Association GEFP, is convinced that Africa – and particularly East Africa – will become the next big apparel sourcing destination for Europe and the US.

He predicts global supply chains will be re-organised as growing demand for textiles and apparel in China and India’s domestic markets will mainly be met by local and regional production. This will leave an opportunity for Africa to take over part of Asia’s global catering role. A great prospect indeed for a continent with a young population that is growing faster than in any other region in the world.

Brian Mandt, senior economist at the International Textile Manufacturers’ Federation (ITMF), recently pointed out that by 2035, the working-age population in Sub-Saharan Africa – more than 900m people – is expected to be as large as China’s today. Labour-intensive industries like apparel will attentively observe the development of this massive labour pool.

A land of opportunity

Not surprisingly, Madagascar’s President Hery Rajaonarimampianina described the Indian Ocean island as “a land of opportunity.”

But he did not refer to the troubles in 2002 and 2009, when political and social unrest brought the country’s apparel industry to a standstill and eventually resulted in the loss of AGOA eligibility from 2010 to 2014.

Instead, he reminded delegates that before 2009, Madagascar had annual apparel exports to the US of US$300m and was the second largest AGOA exporter after Mauritius.

And he said the country is now rapidly returning to its former top position. Since the country’s AGOA eligibility was restored in June 2014 following the formation of the country’s first democratic government, 35,000 new jobs have been created thanks to AGOA exports.

The president of the Republic also announced that 200,000 new textile and apparel jobs are likely to be created in the next five years, with one of the government’s key contributions being the facilitation of a large Malagasy Textile City.

International comparisons

Thanks to the presence of apparel industry insiders from many different countries at Origin Africa, a lot of information was available on how the local industry compares with its international competitors.

The South African entrepreneur Eugene Havemann, CEO of Madagascar Clothing Manufacturers, has garment factories in both South Africa and Madagascar. “I can’t achieve in South Africa the level of efficiency and quality I get in Madagascar,” he says, praising the superior dexterity of Malagasy garment workers.

Comparing the risks of doing business in Madagascar and emerging supply country Ethiopia, Craig Van Wyk, sales manager at Freudenberg Performance Materials, estimates that business risks in Madagascar are smaller than in land-locked Ethiopia where all exports and imports depend on the port of Djibouti. One single terrorist attack could cut the lifeline of Ethiopia’s economy, he notes.

The Bangladeshi business analyst and media consultant Mehdi Mahbub sees lots of similarities between Bangladesh and Madagascar. Problems in the Bangladeshi apparel industry are even worse than in Madagascar, he says, and yet Bangladesh is the second largest apparel exporter in the world. So Madagascar should not under-estimate its growth ambitions.

Yvonne Heinen-Foudeh, marketing and communications director of Gerber Technology for Europe, The Middle East and Africa, doesn’t think Madagascar’s low labour costs of around US$70 per month mean the Malagasy apparel industry will invest less in modern technology than competitors in higher wage countries.

Foreign customers want to communicate efficiently with their suppliers and thus will give preference to CAD-CAM equipped Malagasy suppliers. Also, apparel investors in Madagascar from Mauritius, China and India tend to install the same level of technology here as in their home-factories.

African entrepreneurs

Another focus of Origin Africa was to highlight the potential of female entrepreneurs.

While the majority of decision-makers in large African apparel companies are men, women mostly run SMEs such as small design or handicraft companies. But thanks to the She Trades Initiative of the Geneva-based International Trade Center (ITC), micro and small businesses are being helped to grow into small brands.

A number of female fashion designers got the opportunity to show their creations in a collective stand at Origin Africa, together forming an amazing, colourful group of motivated entrepreneurs, all aiming at impressing the world with their ‘African’ spirit.

Two stand-out examples included the Rwandan fashion designer Candy Basomingera (label ‘haute baso’), who proudly explained that the political and administrative elite of Rwanda now seems to understand the huge image-building potential of national fashion and is ready to support this creative industry. And Nairobi-based fashion designer Anyango Mpinga, whose ambition is to build a globally famous luxury brand based on collections that will always tell captivating stories about Africa.

Matthijs Crietee, general secretary of International Apparel Federation (IAF), assessed the fashion offer at She Trades and its first Project Upscale design competition. He couldn’t resist expressing his admiration for the women designers who are trying to force their way into global supply chains without giving up an inch of their African originality.

Author: Jozef de Koster.