Dubai Company Prepares for Production by October


Velocity’s capital investment was 25.9 million dollars and it employs 5,000




Velocity Apparels Companies Plc, from Dubai, is completing its factory in Tigray to begin production by the end of October 2015.

The company, established in Ethiopia with capital of 25.9million dollars, is building on 101,283sqm of land in Mekelle, near Messebo Cement Factory.

Its products include jeans and knit garments, poly-bags and cartons.

Machinery imported from Germany and Italy is being installed, according to information from the Ethiopian Textile Development Institute.

It has been 11 months since the company acquired land for the construction at the lease price of 0.75Br a square metre, said Goitom Gebrekidan, investment head at the Tigray Urban Development Trade & Industry Bureau.

Goitom added that he had recently visited the construction site. Two of its four workshops have been completed and four wells have been drilled to meet the water demand of the company.

The Development Bank of Ethiopia has lent the company 70pc of the capital, matched by 30pc from the company’s equity, according to Raghav Pattar, vice president of the company, who is supervising the construction project.

At full capacity, the factory will employ 5,000 workers, including 800 foreign workers, said Bantihun Gessese, Ethiopian Textile Industry Development Institute’s corporate communications director,

The foreign employees will come from India and Sri-Lanka. With a limited stay of 36 months they will focus on knowledge transfer, providing on-the-job training for local employees.

“It is a big investment and a huge factory,” Bantihun continued, with high export potential.

The factory will have a production capacity of 26,300 pieces of jeans, 200kg of knitted garments, 100,000 pieces of poly-bag, and 60,000 cartons annually. It plans to export 95pc of its products, particularly to the US and Europe, said Pattar.

This factory brings the number of textile factories in the country to 131. Nine other textile factories which started preparation in the first GTP are expected to join the sector in the initial period of the GTP II.

Performance of GPT-I was short of targets, achieving only 78.2 million dollars of export revenue from the planned total of 262.5 million dollars.

Ethiopia’s cotton production which is also falling behind the plan, has also been a challenge for the textile industry. In 2012/13 production of cotton in Ethiopia was 45,200tn, while the demand was 65,100tn. The following year, production fell to 33,500tn, 45pc of the 74,200tn demand by factories.

Cognisant of the shortage in supply of cotton and other raw materials locally, Velocity Apparels Company Plc will be importing from India and Pakistan, Pattar indicated.

The factory is being constructed according to the stipulated timetable and the government is a close follow up on the company’s progress, said Goitom.

“It is surely going to start operation in October,” he stressed.

The Investment Bureau will talk with the Ethiopian Electric Power, Goitom said, to upgrade the electric supply to the factory.

Velocity has factories in Egypt and Dubai and has been manufacturing knit, and denim garments for the past 34 years.



By BROOK ABDU
FORTUNE STAFF WRITER

Published on Aug 24,2015 [ Vol 16 ,No 799]


SHARE :
               


Editorial

With a reformist administration in charge of the executive, there has b...


Agenda

The new electricity tariffs that became effective on December 1, 2018,...


Fineline

Who it is that midwifed the rapprochement between E...


Commentary

Ethiopia’s economy is at a crossroads. The same old advice will not s...


Viewpoint

A recent photo between Prime Minister Abiy Ahmed (PhD) and George Soros...


Opinion

The future is bleak. Millennials and younger generations who will inher...


View From Arada

There is heated debate on the propriety, decency and morality of breast...




Business Indicators




ADVERTISEMENT



Editors Pick















//