Tag Archives: Manufacturing
Manufacturing: Latest News
Staff, 2:42 pm
Huarong Zhang is chairman of Huajian Group, whose Chinese factories make shoes for Ivanka Trump, Nine West, Michael Kors and other Western brands. This week, Zhang brokered a $ 1.5 billion deal with the Nigerian government to build a shoe factory Nigeria. Huajian already has a shoe factory in Ethiopia manufacturing more than 2,000 pairs of shoes a day that are exported to the U.S. and European markets. Huajian produces 12 million pairs of shoes a year, mostly high-end brands for European and U.S. markets. They typically sell for at least $100 a pair in the U.S.
Staff, 1:00 am
By moving manufacturing to Ethiopia, Chinese textile companies are moving closer to their raw material base, the cotton-producing countries. This is part of their value chain repositioning, a strategy most Chinese companies are adopting. They’re are also using Africa as a gateway to emerging markets on and off the continent. Products made in Ethiopia can be exported duty- and quota free to the U.S. under the African Growth and Opportunity Act (AGOA). The same benefits apply to the E.U. Ethiopia also offers cheap electricity at US$0.04 cents per kilowatt hour. It’s now the second-largest electricity producer in sub-Sahara due to its hydropower dams.
Kurt Davis Jr., 9:54 am AFKI Original
As commodity prices have fallen, African manufacturing has increased leverage — and the attention of investors — to garner more foreign investment. Tanzania is probably one of the easier bets if you are following the crowd. Success stories include Kenya-based Catalyst Principal Partners, an East Africa-focused private equity firm which invested in Zenufa Laboratories, a leading Tanzanian pharmaceuticals manufacturer. Catalyst also invested in Chemi Cotex, which makes toothpaste, skin and hair products. Both involve non-food and beverage consumer goods that are manufactured locally. Both have taken market share due to quality products and competitive pricing.
Dana Sanchez, 4:10 pm
For many Western companies, Africa is a fresh start — an opportunity to build facilities and processes that are environmentally friendly and safe. And don’t forget the tax breaks. Manufacturing in Africa is expensive, training and the quality control are expensive. Most apparel will continue to be made in Asian countries where labor is still relatively cheap and infrastructure, in place. But in China, the world’s apparel manufacturing leader, wages have increased 80% since 2010.
Opinion: Trump’s ‘America First’ Policy An Opportunity For China To Access AGOA, US Markets By Manufacturing In AfricaBy Dana Sanchez, 9:52 am
The main target of Trump’s America First policy is China, the world’s top industrial exporter. China has positioned itself as the world’s factory. Africa does very little trade with the U.S. and is no threat to U.S. jobs. Because China is Africa’s biggest export market, the America First policy will hurt Africa. The export-oriented China creates wealth by exporting manufactured goods to the U.S. and other Western markets. China can circumvent Trump’s efforts by relocating some of its manufacturing to Africa to take advantage of AGOA and access the U.S. market through Africa.
Dana Sanchez, 10:35 am
Ethiopia’s shoe-making industry is getting more attention in the U.S., where 87 percent of imported footwear is from China. A local group of 10 Ethiopian leather and footwear manufacturers have joined forces to supply footwear products destined mainly for the U.S. It’s part of a pioneering effort to persuade global buyers that Ethiopia is an alternative sourcing market to Bangladesh and Vietnam. Ten major brands visited Ethiopia recently. Most are are represented by the 1,000-member American Apparel and Footwear Association.
Staff, 5:36 pm
Poor power supply is partly to blame for the Nigerian government’s inability to build a robust auto industry. That leaves vehicle imports as one of the only ways to meet local demand. Nigeria’s auto market is worth over $4 billion a year, but it does not translate into anything meaningful, a stakeholder said. Starting in 2015, stiff new tariffs were levied on new and used Nigerian vehicle imports. Imports fell more than 50 percent.
Dana Sanchez, 3:47 pm
Africa is increasingly attractive to global clothing brands, but poor infrastructure remains a challenge. East African suppliers need to upgrade their facilities and enter into long-term partnerships with buyers, McKinsey suggested. Buyers need to evaluate the region as a true strategic option rather than just a testing ground. U.S.-owned Tommy Hilfiger and Calvin Klein brands source 5-to-6 percent of global production from Africa. “We believe that production could grow… over the next five years to over 25%,” said the company CEO at the U.S.-Africa Business Forum.
Dana Sanchez, 11:35 am
Ethiopia moved closer to its goal of being an auto industry hub when South Korea’s Kia Motors signed a deal to start assembling cars there. Tax breaks and cheap labor are some of the attractions. For now, Ethiopia must compete with South Africa and Morocco. Egypt, Kenya and Sudan also assemble vehicles. Kia has faced stiff competition in recent years from U.S. and Japanese rivals while demand in emerging markets has cooled. “It is important to penetrate the African market,” a Kia boss said.
Dana Sanchez, 2:17 pm
Despite doom-and-gloom predictions by economists, this bit of good news for South Africa’s economy augments recent reports that South Africa regained its place as the continent’s biggest economy. Economic growth in the second quarter helped the country escape a predicted recession for the second time in seven years. The surprisingly strong growth mostly reflects a bounce back following the disaster of Q1, an economist said. Few expect the growth to be sustained.
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