In the helicopter view of the Tanzanian Government on the development potential of the country, the cotton/textile/apparel sector seems to occupy only a modest place. Textile sector observers, on the contrary, see exciting growth opportunities. They also think that, because of the rapidly changing map of global apparel sourcing, now is the time for Tanzania to make a big leap forward.

Reading ‘The Investment Guide to Tanzania’, published by the Tanzania Investment Centre (TIC), is a sobering experience for textile people who think that Tanzania should aim at becoming the next Bangladesh, or at least the next Cambodia. In this Guide, TIC enumerates 20 priority areas of investment. Agricultural development is understandably the priority area Number One.  Knowing that Tanzania is the largest producer of cotton in East Africa and the world’s 4th largest organic cotton producer, one would expect that TIC will tell investors that investments in cotton plantations and ginneries can significantly help to strengthen the cotton value chain, while achieving poverty reduction in rural areas. But cotton cultivation is not even mentioned by TIC.

Manufacturing is another important priority area of investment promoted by TIC. Note that Tanzania wants to increase the share of industry in GDP, which now hovers around 25%, to 40% by 2025. Again, textile sector observers who in the past have witnessed the rapid and sustained growth of industrial employment in several Asian countries that prioritized textile/apparel investments, would expect that TIC strongly invites investors to look for opportunities in the Tanzanian textile value chain, stressing its enormous growth potential. However, TIC only blandly says that ‘opportunities exist in establishing full-integrated textile mills as well as plants for cotton ginning and CMT-production of garments.’  

Also in the framework of the second Five Year Development Plan (2016/17 – 2021/22), that has the ambition of transforming Tanzania into a semi-industrialized nation by 2025, there are no hints that the Tanzanian Government will make a big priority of exploiting the growth potential of the cotton/textile/apparel supply chain.

Fast growing attention from investors and retailers
However, some global retailers and (mostly Asian) textile investors believe that Tanzania has a series of trumps that will enable it to play a major role in the expected shift of apparel making from Asian to African countries. Ethiopia and Kenya are working hard to get their share. In Tanzania, this is the task of the Textile Development Unit (TDU) of the Ministry of Industry and Trade. TDU is a partnership between the Tanzanian Government and the charitable organization Tanzania Gatsby Trust. This small Unit was quite successful in drawing the attention of some large buyers and manufacturing groups on Tanzania. Recently, representatives from companies like CherryField (Turkey), TAL Group (Hong Kong), Sae-A (South-Korea), A&A Shandong (China) , Needlecraft (Jordan), Pentex UK, Shibufei (China), KAPL (India), Echo Sourcing (UK), Ridham Texport (India), Arvind (India) and Raymond (India) visited Tanzania, and many other companies are expected to come soon with a delegation of 23 coming in March 2016 with a major retailer.

Tim Armstrong, the investment promotion director of TDU stresses that Tanzania has more to offer than cotton, competitive labor (at US$70 per month) and duty free market access to USA, EU, East and Southern African countries. He points out that Tanzania has a cotton textile industry that could be further developed and function as the back bone of a complete textile supply chain enabling FOB-exports of garments made of locally woven and knitted fabrics. That’s not all. Tanzania started building some 50 km North of Dar es Salaam, a showcase mega-zone with integrated port –to be the biggest on the East African Coast (Bagamoyo Portside). Its huge gas reserves recently started to feed the national grid, guaranteeing a reliable power supply. Then there’s the new President John Magufuli, nicknamed “the Bulldozer”. Under Magufuli, tax evasion and corruption are likely to get a blow while the implementation of development plans will get speeded up.

Tanzanian and foreign expansion projects
Mike Oh, Advisor Trade/Investment of the Tanzania Chamber of Commerce, Industry & Agriculture, admits he felt jealous when he was informed about the current wave of FDI in the Ethiopian textile and apparel industry. He hopes Tanzanians will soon understand how important textile business can be for industrialisation and faster growth.

The sector is already in expansion mood.  MeTL Group, Tanzania’s largest homegrown company, has just installed a state of the art knitting and garments factory in one of its three textile mills in Tanzania, 21st Centrury in Morogo. The factory will shortly produce 90,000 pcs of polos and t-shirts per month and ultimately 6.6 million pcs annually.
A to Z Textile Mills in Arusha, a 50/50 joint venture with the Japanese multinational Sumitomo, is mainly known for its treated mosquito nets. Employment reached 7,605 by the end of 2014. Further growth can be expected since the company has widened its business to the stitching of underwear, T-shirts and polo shirts.

Also Namera Ltd in Dar es Salaam has recently set up a new knitting and garment factory. The sportswear producer Mazava Garments Ltd in Morogoro, who in 2014 exported 12 million pieces made from synthetic knitted fabric under AGOA, is considering to triple its production.

China’s JD United Manufacturing established a garment factory with 500workers, called Tooku, in Dar es Salaam’s Export Processing Zone in 2012. In 2015 employment increased to 1,300 people. This year, Tooku intends to double employment to 2,600. By 2020, the company wants to employ 5,000 people. Tooku acts mainly as a CMT producer under AGOA for VF, but has also knitwear customers from Europe. One of them is Primark.

The Indian group Ridham Texport has plans to invest initially 5 to 6 million US$ in a fine fabric production plant with yarn dyed checks. Then the group wants to integrate backward step by step. The design-to-delivery apparel supplier Echo Sourcing with head office in London, which has fashion retailers like H & M, Newlook, Inditex,… among its clients, has even bigger plans: an investment of 27-30 million US$.

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