Africa looks forward to rapid development of textile industry, Chinese enterprises help Africa achieve industrialization

The textile industry in African countries is generally underdeveloped. Even Egypt, which is dominated by the textile industry, faces problems such as backward production technology, outdated equipment and skilled workers. At present, the development of the textile industry has become a wish of Rwanda, the East African Community and even Africa as a whole.

More than 70% of donated clothing worldwide was eventually sent to Africa. According to the data, whether it is new clothes or old clothes, Rwanda spends more than 100 million US dollars on clothing imports every year. “We want to be independent and wear the clothes we make.” Gerald Muqub, co-CEO of Rwanda Private Enterprise, raised hope.

African choice of Chinese entrepreneurs

In terms of raw materials, although Egypt has some famous yarns, fabrics and accessories, it lacks more varieties. 70% of Egypt's yarn fabrics and 80% of accessories must be imported.

China is the world's largest textile trading country and a target country for developing closer trade relations in Africa. However, the Chinese textile industry also has its own problems. As domestic labor costs continue to rise, Chinese companies are beginning to look for cheaper labor and target Africa. For example, Ethiopia is the second largest population country in Africa. The starting salary of clothing workers is about 21 US dollars per month, only 145.6 yuan, far below the domestic level.

In addition, the reason why more and more Chinese entrepreneurs choose Africa is also the raw materials. According to statistics released by the National Bureau of Statistics, according to statistical surveys of 31 provinces (autonomous regions and municipalities) in the country, the national cotton output in 2016 was 5.343 million tons, a decrease of 260,000 tons from the decrease of 260,000 tons in 2015. Where to find cotton? Many entrepreneurs give the answer - Africa. Among them, Tanzania is a famous cotton producer in East Africa. For the textile industry, it is undoubtedly able to reduce costs significantly close to the origin.

"African manufacturing" determination

Although the textile industry in some countries in Africa has developed rapidly, it is still dominated by processing trade in processing, and the added value of its exports of textiles and clothing is very low. Many Chinese textile companies have used the fact that African textile fabrics rely heavily on imports, first expanding the export of textile fabrics in these countries. In addition, due to the strong support of African countries to the local textile industry, a series of preferential policies to attract foreign investment have been introduced, and the training of local textile industry practitioners has formed a certain scale. These favorable factors have enabled foreign investors to establish textiles locally. The objective environment of clothing companies has become more favorable.

For example, the Rwandan government has formulated some preferential policies to attract foreign investment, and strongly encourage and support foreign capital investment in the textile industry. “The policy of the Rwandan government is the biggest driving force for her. The local government does not accept any taxes other than personal income tax, and all clothing exported from Africa to the United States is exempt from import duties within 15 years.” Ma Xiaomei, who opened the C&H clothing factory in Rwanda The introduction said.

However, at present, China's state-owned enterprises have to face a series of problems such as incomplete infrastructure. For example, the transportation cost from Kigali, Rwanda, to Mombasa, Kenya, is often higher than that from Mombasa to Guangzhou.

Despite this, under the overall plan, many Chinese companies with capital and technological advantages have invested in Africa to build factories. Not only ordinary clothing, but also leather products, plastic products and shoes have begun to be transformed into “Made in Africa”. Among them, China's famous women's shoe manufacturer "Huajian Group" is an outstanding representative, the company has established a women's shoe factory in Ethiopia. The cooperation between Huajian and Ethiopia is mutually beneficial and win-win. While Huajian acquired a large amount of low-cost labor and raw materials, it helped Ethiopia to develop light industry and solve the problem of unemployment in nearly half of the country's population.

In the future, "China hopes to turn 'Made in China' into 'China and Africa.'" Tian Xuejun, China's ambassador to South Africa, said at the Johannesburg Summit of the China-Africa Forum in 2016 that China is very much looking forward to helping Africa complete its industrialization. In 2063, manufacturing can account for more than 50% of Africa's GDP.

South Africa: the size of the textile industry in Africa

South Africa is the most developed country in Africa. It has a high level of economic development, good infrastructure and abundant resources. Its gross domestic product and foreign trade volume rank first in Africa.

South Africa has the most advanced industrial infrastructure for transportation, electricity and communications in Africa. The cost of doing business in South Africa is much lower than in developed countries and some developing countries. South Africa's tariff and value-added tax policies, open commercial information, small foreign exchange controls, and stable political environment have many advantages in attracting investment. In China's economic development strategy, the government has always emphasized "going out" and encouraging domestic enterprises to strengthen overseas investment. Therefore, the cooperation between China and South Africa in economic and trade has great potential.

At present, the South African textile industry is the largest in Africa. South African consumers have a diversified and small number of textile demand, and their demand for varieties is no different from that of developed countries, but the overall consumption level is only about 1/3 of that of developed countries. South Africa's local real estate clothing can only meet 60% of domestic demand, the local demand for clothing in winter and summer is large. Fashion tastes tend to European style, whites demand for clothing is generous, traditional and hand-crafted; blacks require clothing to be bright and colorful, and middle and low-end products are more popular.

As the largest trading partner of South Africa, China's textile, clothing, footwear and hat products have been very popular in South Africa and the African continent.

According to the data, as of the end of 2015, China has invested a total of about 13 billion U.S. dollars in South China, and there are more than 300 Chinese-funded enterprises in South Africa (including representative offices), including 140 large and medium-sized Chinese-funded enterprises, involving finance, mining, home appliances, and communications. , automotive, construction machinery, real estate, textiles and clothing, logistics and other fields.

Tian Xuejun, Chinese ambassador to South Africa, said that for a long time, South Chinese-funded enterprises have actively participated in the economic and social development and construction of South Africa, consciously abide by South African laws and systems, live in harmony with local people, earnestly fulfill their corporate social responsibilities, and enthusiastically participate in local education. , health care and social welfare undertakings.

Egypt: African textiles for Europe and the United States

If the industrial technology of Chinese textile enterprises is transferred to Africa, not only can they enjoy hardware benefits such as energy, but also enjoy software conditions such as policy concessions. Some of the textile industry is a good choice for the relatively developed regions, and Egypt is one of them.

Egypt is located in the Nile Delta, with fertile land, abundant sunshine and abundant natural resources. The annual average production of Egyptian long-staple cotton and ultra-long-staple cotton accounts for up to 35% of the world. If the investment is set up, the price of natural gas and industrial electricity in Egypt is relatively low, which makes the production cost relatively reduced and the products more competitive. The data shows that Egypt's electricity bill is 0.3 yuan per kWh, natural gas is 3.5 yuan per cubic meter, and 93 gasoline is only 2.3 yuan per liter. In addition, human resources are also very low, the average monthly salary is equivalent to about 600 yuan, and the industry workers are also very skilled.

Egypt, which is at the junction of Asia, Africa and Europe, has a superior geographical position. The radiation market is very broad. The population of Egypt is about 82.5 million, and the total population of the surrounding areas such as the Middle East and North Africa can reach nearly 600 million. At the same time, Egypt is the only way to enter Europe and the Americas. It is also the gateway to Africa in the face of the world. It also has sea transportation, air transportation and land transportation networks connected to African countries connected to Europe, Asia and Africa. Conducive to the sale and transportation of products, is the distribution center of textile import and export trade.

In terms of software conditions, Egypt has a large demand for textile fabrics, dyes and garments, and has certain spending power. It is understood that the average consumption of Egyptian men’s clothing is 550 US dollars per year; for women, it is more than 900 US dollars. In contrast, its domestic production capacity is extremely limited, with less than 1,000 local factories.

In particular, in order to promote the development of foreign trade, Egypt has adopted further trade liberalization, reduced tariffs, reduced operating costs, enhanced transparency in foreign trade management, and incentives to improve port services, customs procedures, quality control and product standards. A series of measures. In addition, Egypt has also significantly lowered import tariffs, such as lower import taxes on asset equipment, especially for garment machinery, textile machinery, parts, chemicals and dyeing products. Egypt reduces the production costs of domestic enterprises and supports the development of national industries. These have provided a good market environment for Chinese companies to enter the Egyptian and Middle Eastern markets.

As an important industrial sector in Egypt, the textile and garment industry accounts for 30% of the country's industrial output and 25% of the country's exports. At the same time, under the free trade agreement with the EU, Egypt exports textiles and clothing to EU countries to achieve duty-free, which will undoubtedly accelerate more "Made in Egypt" into the EU.

Nigeria: Cotton spinning industry to be revitalized

In the 1970s, when the Nigerian oil economy prospered, cotton was an important export crop for Nigeria. At that time, there were 176 textile companies in the country, and Kaduna, Kano and Kachina had a large number of cotton spinning industries.

In 1980, Nigeria’s textile industry had a value of 8.9 billion U.S. dollars, accounting for about 25% of GDP. The chairman of the Asaba Chamber of Commerce pointed out that in the 1960s and 1980s, the textile industry played a leading role in the Nigerian economy. Nuo and Kaduna’s factories employed millions of workers, and the textile industry contributed a lot to the country’s GDP. However, as the government's work shifted to oil, it neglected the development of the textile industry and agriculture, leading to serious problems in the development of the industry.

Data show that in 2012, Nigeria's textile industry output fell to only $300 million. According to the National Bureau of Statistics, in the first quarter of 2016, the textile, clothing and footwear industry contributed only 2.1% of GDP in Nigeria.

According to the 2006/2007 annual report of the International Cotton Advisory Committee, there are only 51 ginning companies in Nigeria, but only 17 are fully operational, with a capacity utilization rate of only 33% and only 250,000 cotton farmers. The committee also showed that in 2016, Nigeria's cotton production was 51,000 tons, with an area of ​​253,000 hectares and an average production of 202 kg/ha.

The head of the Nigerian Textile Manufacturers Association said that Nigeria imports about $4 billion in textiles and raw materials from India, China, the United States and Turkey each year, and there are a large number of smuggled imports.

The lack of quality seeds has become a key factor constraining the development of the Nigerian cotton industry. The middlemen in the process of selling cotton with water, sand and even stones have also tarnished the reputation of Nigerian cotton. Some countries in Europe even banned Nigerian cotton imports.

In order to alleviate the situation of the Nigerian textile industry, the Nigerian government approved the establishment of a new special fund for cotton, textile and garment manufacturing to provide low-interest loan support to enterprises. It is reported that in 2010, the Nigerian government has established a 100 billion naira cotton garment industry development fund. Some companies have benefited. Based on past experience, the fund has introduced new support and management mechanisms, including further reduction of loan interest rates, extension of loan terms and new supporting policies. One of the supporting policy measures is that the cotton and garment products purchased by the Nigerian army, various military organizations and government agencies must be manufactured locally.

Experts called on the federal government to set up the National Cotton Council, and increased investment in cotton in the budget to provide technical guidance on cotton planting to reverse the decline of the cotton spinning industry. The chairman of the Asaba Chamber of Commerce called on the government to revitalize the textile industry as soon as possible to create more jobs. He pointed out that governments at all levels should encourage the production of cotton and provide a strong environment to encourage the private sector to flourish.

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