Ethiopia’s MK Bags Destine for Europe


The country generated 33,344 dollars from the export of 1,043 bags




A Korean leather-bag manufacturer generated 33,344 dollars in its first export of Michael Kors (MK) handbags, one of the world’s trendy products, to Europe and New Zealand.

The export-oriented company, Pungkook Ethiopia Bags Manufacturing Plc, made its first export of 1,043 purses last week, selling the bags for a unit price of 32 dollars. The company, which had recently entered the Kombolcha Industrial Park (KIP) with 2.3 million dollars investment, occupies four shades at the park totaling 27,500sqm.

Pungkook Ethiopia started operations in April 2018 and is planning to expand its product destination to the USA, Japan, and European countries. It is also aiming to increase its investment to 7.2 million dollars, according to Lee Eun Tae, general manager of Pungkook Ethiopia. The company is a subsidiary of Pungkook Corporation founded over five decades ago in Seongnam, South Korea. Pungkook Ethiopia mainly manufactures sports, outdoor, travel, and handbags for different brands such as Adidas, Reebok, Nike, Under Armours and Michael Kors (MK). It has about 30,000 employees and 11 corporate located in five countries including Ethiopia.

Among the many reasons the company established in Ethiopia are the country’s relative security, safety and advantages under the African Growth and Opportunity Act (AGOA), according to Lee.

The leather and the raw materials are imported from South Korea, China, Hong Kong, Vietnam and other countries. For the current fiscal year which started this week, the company plans to produce 366,000 bags, 60pc of its capacity. The company currently hires 302 employees and plans to add 150 more employees this week. Pungkook Ethiopia is the only company operating inside the park.

Another three companies which have rented sheds inside the park are in the process of installing machines and are expected to join the market soon, according to Yodit Wolde, expert of Industrial Park Facilitation at KIP.

An Italian synthetic fabrics manufacturer, Carvico Ethiopia Plc, the United States clothing manufacture Trybus Bridgetex Ethiopia Plc and the Chinese textile spinning manufacturer Saytex Spinning Plc are three other companies expected to commence operations soon. Inaugurated in July 2017, the park rests on 75ha and incorporates nine sheds in its first project phase. It is expected to create 20,000 direct and indirect job opportunities.

The Park has a health centre, fire brigade, commercial building and one-stop shop services dedicated to the issuance of business licenses, registration of trade names, customs clearances, work permits, visas, and banking. The park is located close to Kombolcha Airport, 367Km away from the capital and 480Km away from the ports at Djibouti.

Eshete Brehan (PhD), a lecturer at the School of Mechanical & Industrial Engineering at Institute of Technology at the Addis Abeba University’s (AAU), beleives the industrial parks would help the country to improve trade deficits by attracting foreign investments.

He believes the companies coming to the country are not transferring technologies effectively to the local employees and he says that, “they are not using locally sourced raw materials.  Therefore the country will not benefit fully.”

 



By YONATAN BELAY
FORTUNE STAFF WRITER

Published on Jul 07,2018 [ Vol 19 ,No 949]


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