•Emerging Textiles & Apparel
Manufacturing in West Africa
Hosted by
United States Fashion Industry Association (USFIA) and
the Tony Blair Institute for Global Change (TBI)
February 11, 2021
2:00 P.M. Eastern/11:00 A.M. Pacific
At any time during the
presentation, you may
enter your questions
here:
Emerging Textiles & Apparel
Manufacturing in West Africa:
focus on Côte d’Ivoire
FEB 2021
1
About Tony Blair Institute for
Global Change
Tony Blair Institute for Global Change
About TBI
The Tony Blair Institute for Global Change (TBI) delivers
innovative and practical policy solutions and advisory
services for governments and leaders.
Experts in our Government Advisory unit help countries
and their leaders turn their vision for development into
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on issues such as the challenges posed by technological
advances and globalisation.
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Building on the success of the
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TBI is expanding it footprint to
Asia and beyond.
2
West Africa T&A insights and
perspectives
As global players look to reconfigure their supply chains, West Africa offers
attractive prospects to build a new, sustainable apparel manufacturing hub
ANTWERP
9-18 days
NEW YORK
14-26 days
ECOWAS
Pop: 350m
GDP: $717b
With preferential access to the US and EU market as well as political support for ETLS and AFTCA*, West Africa
governments have demonstrated increased preparedness to engage with global brands and best-in-class
manufacturers. To succeed, investment and industrialization must be approached as a collaborative partnership
towards an ambitious and sustainable regional approach.
* ETLS: Ecowas Trade Liberalisation Scheme; AFCTA: African Continental Free Trade Area
Sources: TBI analysis
9
West African governments have been investing to develop their manufacturing
sector and T&A-centered strategies
SENEGAL
• Minister of Economy is proactively
engaging T&A investors and refining
support policies, including the
establishment of a dedicated export
zone in Diamniadio close to port
•
New international airport and
additional transport projects underway
•
During Covid-19, government supported
local SMEs to manufacture artisanal and
reusable masks, and facilitated tax
rebates and suspensions for companies
not laying-off their workforce
•
West Africa cotton flows
% of regional cotton flows – est. 2019
Importance of the transit
•
•
•
Planned investments in ports, TVET
No.1 in Doing Business in West Africa
•
Most competitive container seaport in
the region, with key links to landlocked
cotton producers
•
Effective government leadership and
commitment to T&A manufacturing,
including greenfield opportunities
within industrial park strategy and
development of dedicated solar plant
with new tariffs structure
•
Alignment of labour code with T&A
industry’s good practices
Niger
Chad
Burkina Faso
Côte
d’Ivoire
Africa’s No.3 cotton producer:
produced 203k MT in 2019 and
exported over 90% in its raw state –
strong potential as yarn and fabric
production hub
GoCI launched a revived T&A strategy in
2019 and is developing new industrial
parks located around cotton production
zones with fast links to the seaports and
dedicated industrial zone
Mali
Senegal
The UN contributed $200m to Senegal’s
Economic & Social Resilience Program
Established commodity supply chains for
cocoa, cashew and cotton, with
supporting infrastructure, policy target
of 50% domestic processing of crops
•
Focus country
CÔTE D’IVOIRE
•
Togo
Benin
Togo
Ghana
Nigeria
Cameroon
Ghana
Central African
Republic
•
Advanced manufacturing base with
private sector-led modern industrial
parks near the newly expanded Tema
port and Tema highway
•
Cabinet approval of T&A sector plan as
strategic anchor industry to generate $1
bn in exports, 200k jobs in next 10 years
•
Launch of WB-supported $200m Ghana
Job & Skills Program to train skilled
workers for local T&A industry and other
light manufacturing sectors
•
Elimination of VAT for all manufacturers
in local textiles industry
Burkina Faso
•
Africa’s No.4 cotton producer
•
GoBF launched the "Textile
Renaissance" project, a dedicated
industrial park for cotton processing in
Bobo Dioulasso
•
Development of energy supply through
the development of 4 solar power
plants amounting to 150 Megawatts
10
Sources: TBI analysis
T&A companies are already present in West Africa, but the sector remains
embryonic, with opportunity to grow and scale
UNIWAX
Côte d’Ivoire
DTRT Apparel Ltd.
Ghana
Printing
• Owner: Vlisco – Netherlands
• Product: Wax Printed Fabric
• Production: 24M yards = 22M m
• Workers: 650
• Leader of Wax Print Fabric in Côte
d’Ivoire
• Gross Sales: 37B FCFA ($64M)
• Net Outcomes: 4B FCFA ($7M)
• Sourcing: Grey fabrics from China and
Benin
• Marketing:
A-Star
Burkina Faso
Garment
West Africa’s largest garment (CMT) exporter
with main export markets in the US and EU
• Began Ghana operations in 2013 – licenced
free zone company; exempted from all
import/export tariffs with duty-free access
to US
• Workers: over 2,8K
• Production per week: 80K t-shirts and 50K
polo shirts
• Main raw materials source: Asia
• Repurposed part of their operations in 2020
to produce PPE for the Government of
Ghana and their main US customers
Côte d'Ivoire
Benin
Niger
Mali
Guinée
Togo
* Spinning, Weaving and Garment manufacturing, with local sourcing of cotton fibres
Source: TBI Analysis, DTRT
Integrated*
• Joint venture between Government of
Burkina Faso (45%) and Turkish
company Ayka Textile (55%)
• Ayka Textile: Founded in 1988;
- Ready-made garment manufacturer
and exporter
- State of art technology
• An integrated* cotton processing plant
under development
• Estimated production of 100K garments
items per day
• EU and local market
• 12K direct jobs (up to 80% women) for
both skilled and semi-skilled labour, and
up to 50K indirect jobs
Emerging trends underscore the call for a new type of T&A Industry
• $9.6B in revenues in 2018
Emerging industry trends
• Factories in Morocco, Tunisia, Egypt, Ethiopia,
Jordan, Lesotho, Mauritius and Madagascar.
1
• Concerns about environmental externalities becoming
increasingly significant
• Cennydd Williams, Hub leader, Africa and Middle East
• Matt Butler, Outreach Director Hawassa IP
• Major emphasis now on green growth
2
• “A salary of 104 per month isn’t an obstacle. We are doing
business in Kenya and it’s $150.
• “Speed is key and that’s why West Africa is so attractive: it’s
10 days closer to the US.
• "We are always interested in vertical integration. It simplifies
management, speed of execution and strengthens quality control.
• ✔ 10 days shorter lead time to the US
• ✔ textile availability a huge asset to attract companies
• ✔ salary not a deal breaker and lower than some already
successful countries
• ✔ FCFA pegged to euro an advantage for stability
Source: UNIDO, interview with PVH Corp, Interview with Primark, PVH 2018 Annual Report, TBI Analysis
• ✔ french language not an obstacle for operations
Intensifying a “green shift”
Deepening digital transformation
• Digital transformation of society and its permeation into
every aspect of industrial production gaining more
importance
3
• Digitalisation presents opportunities for enterprises:
productivity gains
Intensifying a “circular economy”
• In the emerging ‘circular economy’, as much as possible
everything is reused, recycled or used as a source of
energy and, only as a last resort, disposed of
• Global companies such as Nike, H&M, Philips and IKEA
are implementing aspects of the circular economy into
their global business practices.
The region presents compelling advantages to develop vertical, fast and sustainable
T&A value chain solutions that are scalable and globally competitive
Africa preferred cotton fibre production – 2018
Tons
West Africa’s comparative T&A advantages
1
Cotton
Mali
6,225/277,000
With a critical mass of cotton grower countries (5% of world production
and 15% of exports in 2018), West Africa has the strongest regional
cotton linkages in Africa and a growing reputation as a premium cotton
quality producer (80% classified as superior grade)
2
Ethiopia
11,292
Carbon neutrality - Best in class value chain
West Africa offers greenfield opportunities for global T&A actors, which
create the space to develop climate-friendly infrastructure such as ecoindustrial parks (EIPs). Emerging industry trends point to growing interest
in EIPs as they help operators to reduce their carbon footprint
3
Zambia
34,370
Côte d’Ivoire
140,879
Market access & time to market
Benin
713
Ghana
863
Enabling environment
Well-developed cotton transit corridors and logistics, combined with
favourable government policies and a large skilled and trainable
workforce, are critical building blocks for vertical integration across the
region
Tanzania
10,424
Burkina Faso
259,073
With preferential access and proximity to the US and EU markets, West
Africa has a 10-day speed advantage on other African regions (13-14 days
compared to 20+ days from East Africa ports)
4
Uganda
2,023
Mozambique
27,420
Preferred cotton
fibre Production
High
Madagascar
500
Cameroon
106,880
13
Low
South Africa
11,000
13
Sources: TBI analysis
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Global leaders in the Textile and Apparel Industry have already manifested
their interest in the Region and Côte d’Ivoire
PVH, H&M, VF and their suppliers visited Côte d’Ivoire in November 2019, with the intention to test installations and
local ecosystem’s readiness to develop such a large scale value chain
Prime Minister of Côte d’Ivoire, Ministers of Budget, Transports and of Equipment & Roads, Executive Vice-President PVH
Sourcing, Executive Director VF Asia Sourcing Limited, Country Responsible H&M Ethiopia Liaison Office, TBI Côte d’Ivoire
Main Takeaway
• The delegation confirmed their interest in exploring relocation of a sustainable and integrated value chain in West Africa
• Given the size of the required investments, preferred option is a regional approach including Côte d’Ivoire
Source: CI Energies, National Action Plan for Renewable Energies in Côte d'Ivoire, Ministry of Energy and Petroleum, ECOWAS, TBI Analysis
To succeed, investment and industrialisation must be approached as a collaborative
partnership with a shared commitment to key values
SHARED COMMITMENT
1. Develop vertical, fast and flexible T&A value chain solutions that are scalable and globally competitive
2. Construct best-in-class facilities based on international ‘gold standards’ for park management and
building regulations, including environmental and socio-economic performance
3. Protect the environment through the highest standards of sustainability, including land use, energy
and water efficiency (e.g. renewables, zero liquid discharge of effluent) towards carbon-neutral factories
4. Create decent and sustainable local jobs, linking industry demands with quality vocational training to
create suitable skills base and good working conditions
5. Collaborate as a regional West Africa Hub to optimize economic and social value by supporting the free
movement of labour and goods as well as ease of doing business across the region
With the highest global standards in mind, a T&A industry in West Africa could become a global source of quality,
sustainably produced apparel, significantly boosting industrial GDP in the region and employing thousands of
people along regional cotton, textile and fashion value chains.
15
3
T&A opportunity in Côte d’Ivoire:
the value proposition
Côte d'Ivoire has a well structured cotton sector, that can offer faster lead times,
integrated, sustainable and traceable production
Sector’s structure
Producers
This structure permits scalability for Textile
firms:
+70K
farmers
• Ginneries can be the entry-point;
• Textile companies with strong financial &
technical capacities can take advantage of
this structure : engaging only with
ginneries to upgrade production on best
international quality standards.
A yearly average forecasted production of
~270k tons of cotton fibres for 2020-25
Organized in co-ops
633k tons of
cotton seed
Lead Times
• Captures ~30% of West Africa’s cotton
fibres flows
• Is exploring feasibility for a carbon neutral
supply chain
3 companies
• Total capacity:
• Spinning & weaving
companies
• Assigned to zones of
• Owned by private
• 3 biggest with +85% fibre
production
• One big printing
company
• CIV is a lead time country by geography but at present lacks sufficient volume to
establish direct shipping routes to the United States
- From Abidjan to Rotterdam takes 20-25 days
- Direct routes could save up to a 10-day shipping time
• Is promoting an integrated value chain to
compete as a lead time destination
Infrastructures
6 companies - 16 factories
•
• Receive technical &
Textile Companies
3 Biggest
Ginneries
130,000 farmers
ginneries
Geography +
market access
Ginneries
• Preferential access to EU and US markets via AGOA and EU-ACP-EPA
Industrial parks
Green energies
• A total of 2,809 Ha of industrial lands suitable for T&G
industrial implantation (rented at USD 1.69-3.38 per m2
per year)
• Is exploring eco-industrial parks construction
• Will increase to ~46% the share of renewables in its energy mix
by 2030, from approximately 30% in 2020
• Is developing hydro, bio, solar and wind energy via several
projects
Sources: Conseil Coton Anacarde, Primark, ABF 2018 Annual Report, PVH 2018 Annual Report, Intercoton, CI Energies, National Action Plan for Renewable Energies, Ministry of Energy and Petroleum
17
Côte d'Ivoire has a well structured cotton sector, that can offer faster lead times,
integrated, sustainable and traceable production
Sector’s structure
Producers
This structure permits scalability for
Textile firms:
A yearly average forecasted production of
“270k tons of cotton fibres for 2020-25
6 companies –
16 factories
130,000 farmers
•
Organized in co-ops
•
Affiliated to ginneries
•
Receive technical &
financial assistance
from ginneries
Textile Companies
3 Biggest
Ginneries
+70K
farmers
• Ginneries can be the entry-point;
• Textile companies with strong financial
& technical capacities can take
advantage of this structure : engaging
only with ginneries to upgrade
production on best international
quality standards.
Ginneries
3 companies
•
Total capacity: 633k
tons of cotton seed
•
Spinning & weaving
companies
•
Assigned to zones of
exclusivity
•
Owned by private
Ivorians
•
3 biggest with +85%
fibre production
•
One big printing
company
A two-fold strategy focusing on attracting FDI and building the capacity of local
ecosystem to grow is being developed
Two complementary axis
(Act now for now)
FDI-focused CT&A strategy
Current global model
• Based on production
factors
- CIV is not competitive enough on
costs
8 Wages
8 Electricity
ü
Advanced global model
• Best in class at fair price
- With global partners looking for a
differentiated offering
(Act now for later)
Industrialization of local ecosystem
• Build backward linkages with local SMEs
• Makes it easier to implement and transfer
technology
• Job creation and sustainable livelihoods
- Eco-industrial park
• Plays to CIV’s strengths
- Traceability
• Comprehensive training & upskilling
- Integrating tech within design
- Scalable regionally
Source: TBI Analysis
18
This strategy will aim at filling the existing gaps along the value chain, focusing on
FDI while developing the capacity of existing local actors
Existing gap
Well-integrated and organised
Cotton Grow + Ginning
Farmers
• 120,000 smallholder farmers cultivating a
total of 408,448 Ha
• Average plantations: 3 Ha
• ~270k tons of cotton fibre per year
• Organized in professional organizations
(Co-Ops)
• Affiliated to ginneries based on geography
• Receive technical & financial assistance
from ginneries
Ginneries
• 6 ginning companies with 16 factories of
633k tons of cotton seed processing
capacity
• Assigned to zones of exclusivity
• 3 biggest own +85% of the total fibre
production: which makes the production
easily traceable and scalable
Source: Conseil Coton Anacarde, TBI Analysis
Missing link
Existing gap
With one success story
Not done industrially, handicraft
Printing
Garment manufacturing
Spinning &
Weaving
UTEXI, COTIVO, FTG
UNIWAX
Small designers/handcraft men
• 3 struggling companies
• Owner: Vlisco – Netherlands
• Products: unbleached fabrics
and yarns
• Product: Wax Printed Fabric
• Mostly informal with a craft production
system: <75% informal and targeting the local
market
• Owned by private Ivorians
• Outdated and out of
maintenance machinery:
hinders productivity and
products quality
• Aged and unskilled
workforce
• Limited access to raw
materials: ginners don’t like
to sell to domestic firms
since their payment terms
are not reliable
• Unstable market access due
to poor products quality
• Production: 24M yards = 22M m
• Workers: 650
• Leader of Wax Print Fabric in Côte
d’Ivoire
• Gross Sales: 37B FCFA ($64M)
• Net Outcomes: 4B FCFA ($7M)
• Few successful well-known designers, but
producing small volumes for local, regional
and international markets
• Difficulty to produce in large quantities:
manual artisanal and “tailor-made” production
types
• Sourcing: Grey fabrics from China
and Benin
• Struggles with hard competition from
counterfeit and imported products from Asia
as well as second-hand clothes
• Marketing: ~70% local and ~30% in
the Region
• Faces massive counterfeiting of its
products from China
• Low international presence: Does not benefit
from AGOA or APEs, raw materials being
sourced in non-eligible countries
• Operations are considered healthy
and are expanding
• Abroad delivery issues: rudimentary means of
delivery (National Post: 2 weeks; Commercial
flights: passenger suitcases...)
19
A streamlined thinking process is being driven by the Government of Côte
d’Ivoire to conceptualise and create an attractive local CT&A Industry
Stage
Details
Project status
A vertically-integrated ‘best in class’, carbon neutral supply chain for CT&A takes roots in Côte d’Ivoire with the operations of wellknown global brands/suppliers and backward linkages to local players, ultimately creating a sustainable ecosystem
Strategy & value
proposition
• Axis 1: Target the global market by attracting structuring foreign direct investment through a strong value proposition focused on
sustainability, competitiveness and traceability
• Axis 2: Develop the local ecosystem through a targeted industrial policy to encourage the emergence of local manufacturers, support
the creation of upstream and downstream links, create jobs, and integrate local players in the sector over the long term
• Traceability: i. Create a vertically-integrated value chain with downstream linkages between global players and local actors
Projects & concepts
identification
• Sustainability: i. Build eco-industrial parks for better social, environmental and economic performance of the Industry, ii. Increase the
local production of cotton and raise the share of certified sustainable cotton, iii. Offset carbon emissions, iv. R&D lab and AgTech
• Competitiveness: i. Set up a favourable legal and regulatory framework, ii. Build a performing and supportive set of infrastructures
(industrial parks, transports, energy), iii. Develop a skilled and ready-to-job labour force, iv. Digitize processes
• Conception and finalisation: Design and Feasibility studies for the identified projects
Projects design and
implementation
Sources: TBI Analysis
• Investment promotion: Outreach and Expression of interest
• Partners engagement: Establishing relationship with financial/technical institutions to support project implementation
20
04
Côte d’Ivoire’s business
ecosystem and structural
advantages
Côte d’Ivoire has grown at 8.5% p.a. since 2012 with forecasted 1.8% growth in
2020
In 2018, Côte d’Ivoire tapped international capital markets for first 30-year sovereign bond issuance
Foreign Direct Investment (FDI) in Côte d’Ivoire
Million US$
Business Climate
Moodys, Fitch
1,200
1,009
975
1,000
800
439
Debt expected to stabilize at
40% of GDP (below peers) with
smooth debt maturity into 2024
thanks to active management
620
578
600
Rated in speculative class with
stable outlook in 2020
494
400
200
2014
2015
2016
2017
2018
2019
FDI in Côte d’Ivoire have increased at 14.9% CAGR between 2014 and
2019, as a result of important reforms that boosted foreign investors’
confidence in the country.
Source: IMF, WAEMU, Moody’s, Fitch, Jeune Afrique, Article IV
Strong economic performance since 2012,
reflecting
• A political normalization: 10 years of political stability;
• An improved business environment: +67 places in
Doing Business between 2013 and 2020;
• A supportive and controlled fiscal policy: within the
regional norms.
22
A highly attractive investment regime positions Côte d’Ivoire as a leading
destination in Africa
The new investment scheme was introduced in 2018 to target foreign investment to priority sectors
Implementation Phase
T&G Oriented
• A 2-years 100% exemption from customs duties, except
royalties and community and continental levies
Incentives
Operational Phase
• Tax holidays depending on the location of the plant or
industrial complex :
o 50% over 5 years in Abidjan and neighbouring towns;
• A 2-years 100% exemption from VAT
o 100% over 5 years + 50% over 5 other years in big
regional cites)
o 100% over 10 years + 75% over 5 other years in smaller
cities
On materials, capital goods, first batch of spare parts acquired locally or imported,
goods, services and work carried out locally or abroad
• Unrestricted access to foreign currencies - free access for
companies to currencies
Guarantees to
investors
Deductible to Profit tax, Contribution of patents and licenses, Property tax, VAT and
employer’s responsibility for local jobs
• Free access to locally produced raw or semi-finished raw
materials
• Authorization of asset transfers (subject to regular tax) and
expatriate staff salaries (in foreign or local currency)
Source: CIV Investment Promotion Agency
23
Key contacts to accompany you on this exciting trip
Government of Côte d’Ivoire
Dr. Adama Coulibaly
General Director, Conseil Coton Anacarde
Email: a.coulibaly@conseilcotonanacarde.ci
Tel: +225 07 08 61 33 33
Simplice Gue
Director of information System, Studies and
Foresight, Conseil Coton Anacarde
Email: guesi@conseilcotonanacarde.ci
Tel: +225 05 05 00 54 04
Strategic Partner Tony Blair Institute
Valérie Vencatachellum
Country Head, Tony Blair Institute for Global Change
Email: v.vencatachellum@institute.global
Tel: +225 07 58 37 50 76
Robin Baxter
Consultant, Tony Blair Institute for Global Change
Email: robin_baxter@fitnyc.edu
Tel: +1 917 943 6224
24
Thank you for attending!
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