ACTIF Presentation Rajeev Arora Executive Director African Cotton & Textile Industries Federation
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Transcript of ACTIF Presentation Rajeev Arora Executive Director African Cotton & Textile Industries Federation
ACTIF Presentation
Rajeev AroraExecutive Director
African Cotton & Textile Industries Federation
www.actifafrica.com / www.cottonafrica.com
INTRODUCING ACTIFINTRODUCING ACTIF
The Vision:
An integrated cotton, textile and apparel industry that effectively competes on the world market
Mission:
To develop and successfully deliver services that enhance our membership’s competitiveness in the world market
A regional trade body formed by the cotton, textile and apparel value chain stakeholders in Eastern and Southern
Africa in June 2005
COTTON TRADEWORLD VS AFRICA
2011/12Million tons
2012/13Million tons
2013/14Million tons (projected)
World Production 28.042 26.684 25.63
Africa’s Share 5.6% 5.4% 6.0%
World Consumption 22.789 23.291 23.48
Africa’s Share 1.3% 1.5% 1.6%
World Imports 9.759 9.867 8.81
Africa’s Share 1.4% 1.7% 2.4%
World Exports 9.870 10.078 8.81
Africa’s Share 11.0% 12.6% 15.4%
Source ICAC June 2014
African Cotton Production
Production
Share of World Production
Million tons
Source: ICAC June 2014
Supply & Use of CottonStatus in africa
Region 2013/14
Prod Imports Cons Exports
North Africa 119 154 184 87
Francophone Africa
902 n/a 17 892
Southern Africa 506 59 164 404
World 25,628 8,811 23,461 8,811
Source: ICAC June 2014
000 Metric Tons
AGOA OPPORTUNITY
Total imports of textile & apparel products by USA stood at US$ 101Bn (Source: OTEXA, 2012)
SSA enjoys Duty free Quota free access into US for Garment exports under AGOA
Total U.S. Apparel imports from Africa under AGOA US$ 864
Million (0.8%) (Source: ACT, 2012)
U.S. Textile & Apparel Imports from Sub Sahara
Africa (SSA)
SSA
World
EXPORTS UNDER AGOA2013 DATA
Country MSME % Share $ Million % Share
Kenya 92.716 36.3% 308.77 32.4%
Lesotho 71.4 27.9% 321.27 33.7%
Mauritius 28.6 11.2% 191.4 20.1%
Swaziland 13.1 5.2% 49.97 5.2%
South Africa 12.7 5.0% 20.60 2.2%
Madagascar 11.6 4.5% 20.7 2.2%
Tanzania 10.5 4.1% 10.40 1.1%
Ethiopia 7.35 2.9% 10.5 1.1%
Malawi 2.9 1.2% 8.4 0.9%
Botswana 1.5 0.6% 5.8 0.6%
TOTALS 252.7 98.9% 948.0 99.4%
Source: ACT Report 2014
EU OPPORTUNITY
Africa enjoys duty free Quota free access into EU for Textile products through the Economic Partnership Agreement (EPA)
Total imports of textile & apparel products by EU stood at US$ 234Bn. (2012)
Total EU textile and apparel imports from Africa stood at US$ 9.3 Bn (4%)
EU Textile & Apparel Imports from Africa
Africa
World
Source: ITC calculations based on UN Comtrade
ROLE OF ACTIF
Foreign Direct Investments(FDI): ACTIF explores investment in the cotton textile & apparel value chain in Africa, including developing due diligence and match making for JV’s
B2B Linkages: ACTIF facilitates Business to Business linkages with member countries
Access to Information: ACTIF provides information access including reports and special studies for national policies and strategies
Market access: ACTIF actively develops linkages with member countries and regional economic communities (RECs) like EAC, COMESA, SADC
ROLE OF ACTIF
Policy & Advocacy: ACTIF is very active in advocacy activities in partnership with its members and partners to improve the policy environment across the region
COMESA CtC Strategy: ACTIF has been recognized as the private sector representative for the implementation of the COMESA Cotton to Clothing strategy. With support of our funding partners, ACTIF has developed an priority implementation plan from the strategy and is currently monitoring the implementation activities;
Highlights of key achievements
Extension of AGOA’s third country fabric provision to 2015
In 2011 & 2012, ACTIF was instrumental in engaging with key stakeholders including in US trade representatives, Members of US congress and Senate, Diplomatic corps and civil society. ACTIF Chairman was also invited to speak at a congressional hearing on AGOA. The end result was extension of AGOA’s third country fabric provision to 2015, saving over 300,000 jobs that were at stake!
Highlights of key achievements
Favorable Rules of Origin for the CTA sector adopted under EAC-COMESA-SADC tripartite
ACTIF has been actively involved in representing the private sector views in the EAC-COMESA-SADC tripartite discussions. This has led to favorable provisions for the Cotton, textile and apparel sector being adopted into the final draft of the tripartite document. The document is currently going through the political process before the FTA can be launched.
Highlights of key achievements
Investment Development – PVH Investment Delegation to East Africa: At least twenty Textile & Apparel companies from 5 countries in Asia made a strategic visit to Ethiopia, Kenya and Uganda in April 2014 to explore investment opportunities. The mission was organized by Philippe Van Heusen (PVH) and Vanity Fair (VF) in partnership with African Cotton & Textile Industries Federation (ACTIF) working with its member associations in the 3 countries visited along with export and investment promotion agencies.
Investment Visit to Kenya Investment Visit to Uganda
OTHER ACHIEVEMENTS
Trade Events
ACTIF has developed and also successfully partnered in developing trade events for the cotton textile & apparel sectors in Africa under Origin Africa (2011-2014) and Source Africa (2013 & 2014);
Information Dissemination
ACTIF has successfully developed a number of valuable reports
Capacity Building Seminars
ACTIF successfully organized Capacity building seminars for the CTA Industry in Africa under Source Africa events in 2013 and 2014 in Cape Town, South Africa
Projects Priority Areas linked to COMESA CtC Strategy
1 Capacity building of national federations Develop the industry's technical and human resource capacity
2 Cotton by-products markets prospectsAddress emerging industry standards and target appropriate channels/products (apparel)
3 Promoting investments in East African region Strengthen Regional and International Market Linkages
4Textile & Apparel industry optimization to build competitiveness
Develop Quality Standards, Standardization and Systems across the value chain
5CTA value chain development through value addition
Address emerging industry standards and target appropriate channels/products
6 Establishment of center of excellence Develop the industry's technical and human resource capacity
7 Evaluation of cotton support centersPromote good agricultural practices and train farmers/ginners to improve productivity
8Supply side analysis for 10 Countries: Mauritius, Zimbabwe, Zambia, Madagascar, Burundi, DRC Congo, Malawi, Egypt, Ethiopia & Eritrea
To capture country information and supply side data to enhance regional MIS and to promote trade across the regional cotton to clothing value chain
PROPSOED STRATEGIC INTERVENTIONS UNDER THE COMESA COTTON TO CLOTHING STRATEGY
Supply & Use of CottonStatus in africa
Region 2018/19
Prod Imports Cons Exports
North Africa 120 200 280 40
Francophone Africa
1,200 n/a 25 1,175
Southern Africa 680 70 260 500
World 28,000 9,000 28,000 9,000
Source: Forecasts by Terry Townsend, ACTIF Consultant
000 Metric Tons
WHY AFRICA?
Overview of global clothing industry
Clothing export industry has grown from US$40 billion in 1980 to $422 billion in 2012, averaging 29% growth annually
No major changes in main importing countries
19 World Clothing Import 1982
Source: WTOSource: WTO
20 World Clothing Import 2012
Source: WTO
Overview of global clothing industry
21
The major exporting countries have been playing musical chairs:
from quota countries to non-quota countries
after expiration of MFA in 2005; to cheapest countries
to countries with Free Trade Agreements (FTAs) or Generalised System of Preferences (GSPs)
22 World Clothing Export 1980
Source: WTOSource: WTO
World Clothing Export 201223
Source: WTO
Overview of global clothing industry
Wage Trends in
Major Clothing
Exporting Countries
Note:
GDP/capita gives an indication of
the standard of living
Source: CIA Factbook / Wikipedia
25
Where will be the next Apparel production Frontier?
Countries where they have:
•Geographical advantage: Nearness to raw materials and markets
•Trading advantage: Bi-lateral or multi-lateral Free Trade Agreement
•Demographic advantage: Abundance of unemployed labour
Why Africa?26
Africa has:•Geographical advantage:
• Cotton production Mali, Burkina, Cote D’lvoire, Mozambique
• Close to EU & US
•Trading advantage: • Duty Free to EU• AGOA
•Demographic advantage: • Abundance of unemployed labour
WHY AFRICA?27
Healthy Growth Momentum
Robust growth over the past 10+ years
Economic Growth:
4.2% (2012), projected to accelerate to 4.5% (2013), 5.2% (2014)
5 out of the top 10 fastest growing economies in 2013 are African countries, 4 out of 10 in 2012 (IMF)
Business Insider predicted 9 out of the 20 fastest growing economy in the next 40 years will be African countries.
WHY AFRICA?28
Healthy Growth Momentum (Cont’d)
Even resource-poor countries (Mozambique, Ethiopia) have grown, backed by mineral resource discoveries and buoyant commodity prices
Africa’s trade with emerging countries has gained in importance, e.g BRICS (Brazil, Russia, India, China, South Africa)
The US economy
Its gradual recovery is good news for garment exporters in Africa with increasing support from American buyers
WHY AFRICA? 29
• Africa becoming a major consumer market- Total population of 1 Billion
- More than 10 countries have GDP per capita exceeding $5,000
- More than 10 countries have millionaire growing at between 20% to 108% over the last 5 years
- Clothing export to Africa grown from $3.5 Bn in 2003 to 10.1 Bn in 2012
• The Obama Administration and AGOA:- Anticipates a seamless renewal of AGOA beyond 2015- AGOA enjoys strong bi-partisan support
LONG TERM FUNDAMENTALS – OPPORTUNITY FOR AFRICA
Increasing capita fiber consumption in emerging economies
Source: PCI-Fibres, The Fiber Year, ITMF
Asia is destined to put more focus on its domestic market in the coming years. Africa is therefore set to establish itself as the next sourcing destination
Year World West Europe Turkey North
America China India
2007 11.7 23.7 18.0 37.8 16.0 4.6
2009 11.0 21.9 14.6 30.2 17.2 4.8
2011 12.2 23.6 16.6 34.5 19.9 5.1
2013 13.0 24.0 16.9 36.2 21.1 5.5
Other reports show even higher trends for India
VALUE ADDITION OPPORTUNITIES
1) Increasing demand for high qulaity fabrics targeting AGOA & EU markets is a huge opportunity to invest in the Textile Industry;
2) Huge potential in the Cotton By Products Industry to enhance income to cotton farmers;
3) Increasing demand for African Fashion & Designs;
4) Increasing demand for hometextile & home decor from Africa;
CAPTURING VALUE ADDITION
Value Addition x 10 times which can create 9 million jobs if 100% value is added to current African lint
Fibre
1 Kg
1.6 US$
0.5 person
Yarn
0.75 Kg
3.40 US$
0.75 person
Fabric
3.35Mtr
8.5 US$
2.0 persons
Garment
2 Trousers
15.50 US$
4.0 persons
Retail
2 Trousers
38.80 US$
AFRICA’S POTENTIAL
Africa’s Land Mass depicting the
continent’s potential
10th – 12th November 2014HOTEL INTERCONTINENTAL
Nairobi, Kenya
Africa’s Cotton, Textile & Machinery
Trade Fair
fiber fabric clothing fashion accessories home décor
machinery
www.originafrica.org
Origin Africa 2014 event
Changing Perceptions, Building Synergies & Doing Business
•The event will highlight the creativity and innovation of the African cotton, textile and clothing industries•Special focus on business, trade and investment – regional and international – capturing the spirit, style and innovation of modern Africa.
Components:
•Trade Expo; Seminars; B2B Meetings; Designer Fashion Showcase
Target Participants:
•Cotton, Fibre, Yarn & Textiles, Apparel & Fashion, Home Textiles & Décor, and Accessories sectors; Support Agencies; Investment Agencies; Export Agencies; Textile Machinery/Technology Suppliers; National Delegations; and Country Pavilions Investment Promotion;
Special features
Cotton Fibre Component
•B2B activities will be organized between Ginners and Spinners to promote cotton Trade and value addition in Africa;
Home Textile & Home Décor Component:
•A special Home Textile Component has been included to showcase key regional suppliers;
Factory Visits
•Factory visits to be organized for investment delegations and sourcing agents;
Students Category
•A Students Category has been included in the Trade Expo to showcase up coming talent;
B2B Meetings
37
• This will be pre-arranged meetings to match African
manufacturers with international and regional retailers, brands,
wholesalers and agents.
• An opportunity for African manufacturers to showcase African
made textiles, apparel, footwear and services to European,
American and African buyers.
conclusion
Value Addition Opportunities exist across the entire value chain
Thank you