DEVELOPMENT BANK OF ETHIOPIA

PROJECT DATA ANALYSIS AND MANAGMENT

DIRECTORATE

GARMENT MANUFACTURING AND MARKETING

(1ST UPGRADE)

Prepared by:
Mesfin Woldemariam Team Manager
Moges Tesfa Sr. PDAM Officer
Henock Tsegaye Sr. Chemical Engineer
Kefale Mosa PDAM Officer
Genet Mulatu Jr. PDAM Officer

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 June 2017

Table of Content page

ACRONYMS.................................................................................................................................................v

LIST OF TABLES........................................................................................................................................vi

LIST OF FIGURES....................................................................................................................................viii

1. INTRODUCTION.................................................................................................................................1

1.1. Background....................................................................................................................................1

1.2. General objectives..........................................................................................................................2

1.2.1. Specific Objectives.....................................................................................................2

1.3. Methodology..................................................................................................................................3

1.3.1. Type and source of data.............................................................................................3

1.3.2. Method of Data Analysis...........................................................................................3

1.4. Scope and Limitation of the Study.................................................................................................4

2. COMMODITY DESCRIPTION...........................................................................................................5

2.1. Definition.......................................................................................................................................5

2.2. Classification of Garment..............................................................................................................5

2.2.1. Classification of Garment by their Function.............................................................5

2.2.2. Classification of Garment by Gender Differentiation...............................................5

2.2.3. Classification of garment by type of fabric...............................................................6

2.3. Types of Garment..........................................................................................................................7

2.4. Characteristics of Garment............................................................................................................9

2.5. Uses of Garment..........................................................................................................................10

2.6. Quality and Standard Requirement of the Commodity................................................................10

3. MATERIALS AND INPUTS STUDY...............................................................................................11

3.1. Description...................................................................................................................................14

3.1.1. Yarn.........................................................................................................................14

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 3.1.2. Fabric.......................................................................................................................15

3.1.3. Sewing threads.........................................................................................................19

3.1.4. Accessories and Trim..............................................................................................19

3.1.5. Packing materials.....................................................................................................21

3.2. Production and Import of Materials.............................................................................................23

3.2.1. Production of yarn, fabrics and sewing thread in Ethiopia......................................23

3.2.2. Import of materials..................................................................................................24

3.3. Demand for Raw Materials..........................................................................................................31

3.3.1. Fabrics and yarn.......................................................................................................31

3.3.2. Sewing thread..........................................................................................................31

3.4. Demand supply gap......................................................................................................................31

3.5. Problems and Opportunities.........................................................................................................32

3.5.1. Problems..................................................................................................................32

3.5.2. Opportunities...........................................................................................................32

3.6. Market channels of Raw Materials..............................................................................................32

3.6.1. Raw materials for full production (from raw materials to producing)....................32

3.6.2. Raw materials for order base production.................................................................33

3.7. Raw materials import price trend.................................................................................................35

4. GARMENT MANUFACTURING PROCESS & TECHNOLOGY SELECTION............................36

4.1. Garment processing from fabric..................................................................................................37

4.1.1. Overview of Pre-Production....................................................................................37

4.1.1.1. Design......................................................................................................................37

4.1.1.2. Pattern Making.........................................................................................................37

4.1.2. Production Stages....................................................................................................39

4.1.2.1. Fabric spreading (fabric relaxing)...........................................................................39

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 4.1.2.2. Fabric cutting...........................................................................................................40

4.1.2.3. Sorting and bundling................................................................................................41

4.1.2.4. Pre-sewing Activities (Fusing, Printing & Embroidery).........................................42

4.1.2.5. Sewing.....................................................................................................................45

4.1.2.6. Garment Finishing Department...............................................................................46

4.2. Garment processing from Yarn....................................................................................................48

4.2.1. Socks processing..................................................................................................................48

4.3. Garment Manufacturing Machinery requirements.......................................................................48

4.4. Building and Construction...........................................................................................................60

5. MARKET STUDY..............................................................................................................................63

5.1. Market Segmentation...................................................................................................................63

5.2. World Production.........................................................................................................................63

5.3. World Trade.................................................................................................................................63

5.4. Articles of Apparel, Accessories (Knit or Crochet):....................................................................63

5.5. Articles of apparel and aaccessories (not knit or crochet)...........................................................66

5.6. Global Apparel Consumption......................................................................................................68

5.7. Domestic Market for Articles of Apparel....................................................................................69

5.7.1. Demand Side............................................................................................................69

5.7.2. Supply Situation.......................................................................................................75

5.8. Demand Supply Gap....................................................................................................................84

5.9. Marketing Channels and Arrangements.......................................................................................84

5.10. Price Trend...........................................................................................................................86

5.10.1. Garment Marketing Problems..................................................................................87

6. ORGANIZATIONAL STRUCTURE AND MANPOWER REQUIREMENT..................................88

6.1. Organizational Structure..............................................................................................................88

6.2. The Role of Major Responsible Bodies in a Garment Factory....................................................90

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 6.3. Manpower Requirement...............................................................................................................92

6.3.1. Incentive Scheme.....................................................................................................94

6.3.2. Skilled and Unskilled Labor....................................................................................94

7. ENVIRONMENTAL AND SOCIOECONOMIC IMPACTS............................................................95

7.1. Environmental Impacts of Garment Industry..............................................................................95

7.2. Socio-Economic Significance of the Garment Industry..............................................................95

8. PUSH, PULL AND SUCCESS FACTORS........................................................................................97

8.1. Push factors..................................................................................................................................97

8.2. Pull Factors..................................................................................................................................99

8.3. Success Factors..........................................................................................................................100

9. DBE EXPERIENCE IN THE SUBSECTOR....................................................................................101

10. CONCLUSION AND RECOMMENDATIONS..........................................................................103

10.1. Conclusion.........................................................................................................................103

10.2. Recommendations..............................................................................................................105

11. PARAMETERS, TECHNICAL COEFFICIENTS AND BASIC ASSUMPTIONS....................106

11.1. Basic Assumptions.............................................................................................................106

11.2. Conversion rate of garment production (input – output relationship)...............................106

11.3. Revenue..............................................................................................................................107

11.4. Costs...................................................................................................................................108

11.4.1. Investment cost requirement..................................................................................108

11.4.2. Operational cost.....................................................................................................109

11.5. Working capital requirements............................................................................................112

12. REFERENCESS............................................................................................................................114

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 ACRONYMS

AGOA- African Growth and Opportunity Act (AGOA)

COMESA- Common Market for Eastern and Southern Africa

CSA- Central Statistics Authority

EBA-Everything but Arms

ERCA – Ethiopian Revenue and Customs Authority

GDP - Gross Domestic Product

GTP – Growth and Transformation Plan

HSC – Harmonized System Code

ITC - International Trade Center

ETDI – Ethiopian Textile Industry Development Institute

TVET-Technical Vocational and Educational Training

UoM- Unit of Measurement

US- United States

LIST OF TABLES

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Table 3.1 Sample of Garments and Corresponding Required Materials....................................................11

Table 3.2 Fiber characteristics in terms of Durability, Wrinkle resistance, Absorbency and Care............13

Table 3. 3 Type and Source of packing material used for garment manufacturing...................................22

Table 3.4 Domestic Production of yarn, fabrics and sewing thread, 2003 E.C to 2008 E.C......................22

Table 3. 5 GTP II, Domestic Production Plan of Yarn and Finished Fabrics, 2008 E.C -2012 E.C...........23

Table 3.6 List and Quantity of Imported Materials 2012 to 2016.............................................................24

Table 3. 7 GTP II production and export plan of garment, yarn, and fabric.............................................30

Table 3. 8: Average Price Trend of Yarn, Fabrics and Sewing Thread, 2003 E.C – 2007 E.C..................34

Table 4. 1: List of machineries and equipments along with their purpose.................................................47

Table 5. 1: World articles of apparel, accessories, (knit or crochet) export trend in '000' USD and average
annual export growth.................................................................................................................................63

Table 5. 2: World top fifteen article of apparel and accessories (knit or crochet) exporting countries, their
export value in thousand USD and share of world export by 2016............................................................63

Table 5. 3: World import of articles of apparel and accessories, knit or crochet in '000' USD..................64

Table 5. 4: World top fifteen articles of apparel and accessories (knit or crochet) importers in 2016.......64

Table 5. 5: World articles of apparel and accessories (not knit or crochet) export trend in thousand USD65

Table 5. 6: World top fifteen exporters of articles of apparel and accessories (not knit or crochet)..........66

Table 5. 7: World import trend of articles of apparel and accessories (not knit or crochet) in ‘000’ USD 66

Table 5. 8: World top fifteen articles of apparel and accessories (not knit or crochet) importing countries,
their import value in thousand USD and share of world import in 2016....................................................67

Table 5. 9: Per capita apparel consumption in major markets (USD per capita)........................................68

Table 5. 10: Domestic production trend of articles of apparel in Ethiopia.................................................69

Table 5. 11: Article of apparel per capita consumption trend and average annual growth rate..................69

Table 5. 12: Domestic demand projection of articles of apparel in Ethiopia..............................................70

Table 5. 13: Articles of apparel export trend of Ethiopia (both knitted and not knitted)............................70

Table 5. 14: Export projection of articles of apparel..................................................................................71

Table 5. 15: Total demand for articles of apparels of Ethiopia..................................................................71

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Table 5. 16: Articles of apparel knitted (crocheted) export by destination in 2015....................................72

Table 5. 17: Articles of apparel not knitted (not crocheted) export by destination in 2015........................72

Table 5. 18: Ethiopia’s textile and apparel export to US under AGOA (from 2002 to 2016)....................74

Table 5.19: Capacity utilization rate of integrated garment factories, 2008 E.C........................................75

Table 5. 20: Capacity utilization rate of garment factories, 2008E.C........................................................75

Table 5. 21: Garment and wearing apparel (except leather) production trend in Ethiopia.........................77

Table 5. 22: Average weight of a dozen of articles of apparel...................................................................77

Table 5. 23: Domestic production trend of articles of apparel in Ethiopia.................................................78

Table 5. 24: Domestic production projection of Ethiopia's articles of apparel...........................................79

Table 5. 25: Import trend of article of apparel (Knitted) to Ethiopia.........................................................79

Table 5. 26: Import trend of articles of apparel not knitted........................................................................80

Table 5. 27: Ethiopia's import trend of articles of apparel both knitted and not knitted.............................80

Table 5. 28: Import projection of articles of apparel to Ethiopia...............................................................80

Table 5. 29: New entrant Garment Projects, their installed capacity and date of commencement.............81

Table 5. 30: Domestic production projection of articles of apparel by new entrants in Ethiopia...............82

Table 5. 31: Total supply projection of articles of apparel in Ethiopia (‘Kg).............................................82

Table 5. 32: Demand-Supply gap (‘Kg)....................................................................................................83

Table 5. 33: Average export selling price trend of garment products in USD...........................................85

Table 6. 1: Manpower requirement of garment factories...........................................................................90

LIST OF FIGURES

Figure 3. 1: Interlaced direction and sample woven fabrics with corresponding garment product............17

Figure 3. 2: Marketing channels of raw materials for integrated production.............................................32

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Figure 3. 3: Market channel for raw materials when production is order based.........................................33

Figure 4. 1：General Process flow for garment manufacturing...................................................35

Figure 4. 2: Making of basic designs of cuts needed based on the design pattern......................................37

Figure 4. 3: Usage of degitizer board to input the basic design into the design software...........................37

Figure 4. 4: A plotter printing cut patterns on a paper...............................................................................38

Figure 4. 5: Fabric spreading table............................................................................................................39

Figure 4. 6: Automatic and manual fabric cutting.....................................................................................40

Figure 4. 7: Industrial automatic fusing machine.......................................................................................41

Figure 4. 8: Screen printing process..........................................................................................................42

Figure 4. 9: 6 color carousal printing machine..........................................................................................42

Figure 4. 10: electric curing machine........................................................................................................43

Figure 4. 11: Big industrial embroidery machine (33 head)......................................................................43

Figure 4. 12: Assembly Line System.........................................................................................................44

Figure 5. 1 Marketing Channel for Articles of Apparel.............................................................................84

Figure 6. 1: Organizational structure.........................................................................................................87

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 1. INTRODUCTION

1.1. Background

The economic growth (GDP at constant basic price), during the five years of GTP I period, the
share of agriculture, service and industry in GDP averaged 38.5%, 46.3% and 5.1%, respectively.
Within the industry sector, the share of the manufacturing sub-sector in total GDP by 2014/15
remained at below 5 percent. This showed that the manufacturing base has remained very narrow
during GTP I implementation period.

Textile and apparel sub-sector is among the priority areas identified by the Ethiopian
government in transforming the country’s traditional agrarian economy to
industrialization. Ethiopia has had potential for textile and garment industry and the global
market is also conducive for the expansion of the sub-sector.

Parallels to the increase in world population and growing of middle class in many parts of the
world, including Africa and Asia, the demand for garment and textile products is rising.
Countries which are known for exporting garment and textile products such as China and India
are also becoming less competitive globally primarily due to the rise in cost of labor.

Ethiopia, on the other hand, has huge and cheap labor force as comparative advantage making
labor intensive manufacturing sub-sectors like textile and garment industries more attractive and
competitive. Ethiopia’s location is also a strategic one close to various markets including Africa,
Asia and Europe. Moreover, Ethiopian made products also enjoy preferential treatments to
various markets including the European Union market under the Everything but Arms (EBA)
initiative and to the US market under the African Growth and Opportunity Act (AGOA).

The textile and garment sub-sector is under growing pressure to expand more rapidly with the
Ethiopian government setting ambitious goals for the industry. Government has targeted the
textile and garment sub-sector as a key economic activity towards harnessing the growth of
national economy by generating hard currency. To this end, the government, during the second
phase of growth and transformation plan (GTP II), according to Ethiopia’s Textile Industry
Development Institute (TIDI), has forecast $ one billion in annual revenue from textile and
garment export.

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Moreover, according to the institute, more than 152 new investments are expected during GTP II
with creation of more than 170,000 job opportunities. During the period, it is also anticipated that
ten industrial zones to be built entirely by the government are targeted to foster realization of the
plan.

However, the sub-sector’s performance has not been satisfactory during GTP I period with
annual earnings from export not exceeding $100 million against $ 1 billion as a plan and
yardstick. The sub-sector has also been surrounded with intertwined problems such as shortage
of raw materials, inefficiency, and lack of modern technological applications. But the
government insists that future for the sub-sector is bright. It has provided incentive schemes for
private sector so as to attract more investment in the sector with 100% duty free import of
machineries and equipment.

Hence, this commodity study is an upgrade one which aims at rigorously evaluating the prospect
of garment manufacturing and reaches at concrete findings that assist appropriate working units
to pass sound decision whether Development Bank of Ethiopia has to intervene in financial and
technical support by visualizing it from different aspects.

1.2. General objectives

The general objective of the study is to produce a document that will serve as a source of data
and information (reference) for appraisal of projects related to the sub-sector and for making
proper decision in the process of delivering credit to prospective borrowers.

1.2.1. Specific Objectives

The specific objectives of the study are to provide pertinent data and/or information on:

Definition of the commodity, its nature & character, classification, uses and quality & standard
requirements;
Types of raw materials required for manufacturing of articles of garment, their availability & sources,
quality requirements, market prices & trends, and marketing arrangements;
The nature of the product & its manufacturing processes & techniques;
The facilities and machineries & equipment required for manufacturing of articles of garment;
The availability of market, market prices & trends for the product, and marketing arrangements;

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 The organizational structure and manpower required for production, and the availability of skilled &
semi skilled workforce;
The environmental impacts and their respective mitigation mechanisms;
The socio-economic benefits of manufacturing and marketing of the commodity;
Pull, push and success factors;
Providing assumptions and coefficients for estimation of revenues, costs and others; and
To assist the concerned organs of the bank to decide on financing of projects originating from the
assessment of the sub-sector.

1.3. Methodology
1.3.1. Type and source of data
In this study both primary and secondary data were used. To collect primary data, purposive
sampling was employed based on criterions; modern technology utilization of firms, export
performance of firms and recommendation from ETIDI. Accordingly, Primary data were
collected from four private operational firms at Hawassa Industrial Park through structured
questionnaire and interview. On the other hand, secondary data were collected from various
relevant literatures, internet, Ethiopia Textile Development Institute, and previously updated
commodity study.

1.3.2. Method of Data Analysis

Descriptive statistics was used to analyze the collected data in different parts of the study. These
typical tools employed for exploring the descriptive summaries in this study were growth rates
such as AGR, CAGR, and Geo-mean. Geo-mean was employed for those data that have an
observable fluctuation during the period of analysis. CAGR and AGR were also applied in
different parts of the study according to the nature of the data that exhibits a similar and
fluctuating pattern.

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 1.4. Scope and Limitation of the Study

The study mainly focuses on garment manufacturing and marketing in Ethiopia by including
socks and pants as additional products to those encompassed in the previous commodity study;
and following additional product (socks), yarn was also added as additional raw materials to raw
materials covered in previous study (fabrics). The resultant of these additional products and raw
material alters the scope of previous study, and become upgrade. The major limitation emanates
from enormous nature of the sub-sector and product diversity. Accuracy will be there if specific
products are pointed out independently and studied parallels.

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2. COMMODITY DESCRIPTION

2.1. Definition

Garment is somewhat generic term representing a piece of clothing and synonymously used
with the words apparel, cloth and dress.

2.2. Classification of Garment

2.2.1. Classification of Garment by their Function

Religious clothing might be considered a special case of occupational clothing. Sometimes it is

worn only during the performance of religious ceremonies. However, it may also be worn
everyday as a marker for special religious status.

Industrial Clothing: With the increasing industry establishments and the growing concern of the
manufacturers towards the safety of their workers, the market for industrial clothing is growing
due to the demand of work apparels and protective garments. Boiler suits, industrial gloves,
industrial leather jackets, industrial safety trousers, industrial tool bags, leather leg guard, leather
safety sleeves- the list is increasing continuously.

Animal Clothing: People these days have become more adventurous and love such sports where
there is thrill. Along with other water and adventurous sports, the sports using various animals
are also liked by them. Apart from this, animals are also widely used in farms etc. these are items
such as animal blankets, harness sets, horse boots, bridle, halters, harness and saddle are growing
very fast.

2.2.2. Classification of Garment by Gender Differentiation

Men’s clothing: there are variety of formal as well as designer clothes for men’s including
jackets, jeans, pants, shirts, shorts, trousers, T-shirts, under wears, sports wears, beach wears etc.
Women's Clothing: Fashion keeps on changing and more so for women's clothing. From
formal, casual, and corporate wears to designer and exclusive wear, women's clothing doesn't
know any boundaries. It includes Ladies Frocks, tops, skirts, T-Shirts, tunics, jeans, shirts,
shorts, trousers, swimsuits, outerwear, waistcoats, wraparound - all have their own increasing
markets.

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 2.2.3. Classification of garment by type of fabric

Garment can also be classified by the types of fabric they made from as woven and knitted
garments. Knitwear is manufactured primarily from cotton and wool yarns and artificial and
synthetic fibers, including textured yarns. Synthetic raw materials are more widely used for knit
goods than for woven fabrics because knitted fabrics have an open structure and are permeable to
air and moisture. Woven apparels are made from woven fabrics which are formed by weaving.

2.2.3.1. Denim (Jeans)

Denim is a woven fabric commonly made with a blue cotton warp yarn and a white cotton
filling yarn. When it was first designed, denim was primarily used to make work clothes and
tough clothing like overalls, but today it is used for everything from purses and skirts to denim
jackets and other fashionable clothes.

Denim classifications based on type of washes

Raw: Raw or “unwashed” denim requires the shortest washing time. Most of the dye is retained
and softeners maybe added to soften the resin finish.

Medium: Chemicals for bleaching and softening are added; requires longer washing time until
enough of the indigo dye bleeds out to achieve the medium blue.

Light: Chemicals for bleaching and softening are added; requires longest washing time, with
greater dye loss to achieve the light blue color.

Advantages of Denim Garment

There are several advantages associated with denim jeans, which emerge when the denim jeans
are compared with other types of clothing.

One of those advantages of denim jeans over other types of clothing is in the fact that denim
jeans tend to be highly durable. This mainly has to do with the toughness of the denim jeans
material, and the stitches normally employed in putting the jeans together. The big advantage of
denim is that it is really strong and hard to break.

Yet another advantages associated with denim jeans is in the fact that they tend to be very
aesthetically appealing. This has something to do with both the colors and designs.

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Denim has always been used for very durable outdoor work clothing. Because of its weight,
rigidity, and thickness, denim is chosen for casual jackets, skirts, and jeans. Now that so many
garment-finishing techniques are applied to denim, its use has broadened into different lifestyles.

Disadvantages of denim garment

Hot water washing: denim stretches out, requiring hot water washing and drying to recover the
fit and it also creates thick layers of fabric when sewing.

Poor colorfastness: color will bleed into laundry and rub off (crock) onto other surfaces. Denim
clothes can be ironed at high temperatures and it easily fades due to the dye being on the surface.

2.3. Types of Garment

Shirt: is a cloth garment for the upper body. It is an undergarment originally worn exclusively
by men. A shirt is more specifically a garment with a collar, sleeves with cuffs and a full vertical
opening with buttons or snaps. (North Americans would call that a "dress shirt", a specific type
of "collared shirt").

Coat: is a long garment worn by both men and women, for warmth or fashion. Coats typically
have long sleeves and are open down the front, closing by means of buttons, zippers, toggles, a
belt, or a combination of some of these. Other possible features include collars and shoulder
straps.

Overcoat: is a type of long coat intended to be worn as the outermost garment, which usually
extends below the knee. Overcoats are most commonly used in winter when warmth is more
important.

Jacket: is a hip- or waist-length garment for the upper body. A jacket typically has sleeves, and
fastens in the front or slightly on the side. A jacket is generally lighter, tighter-fitting, and less
insulating than a coat, which is outerwear. Some jackets are fashionable, while others serve as
protective clothing.
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Skirt: is a tube- or cone-shaped garment that hangs from the waist and covers all or part of the
legs. A skirt can be a draped garment made out of a single piece of material, but most skirts are
fitted to the body at the waist and fuller below, with the fullness introduced by means of dart,
gores.

Dress: (also known as a frock or a gown) is a garment consisting of a skirt with an attached
bodice (or a matching bodice giving the effect of a one-piece garment). In Western culture,
dresses are usually considered to be items of women's and girls' apparel.

Socks: type of garment made from yarn used for all age group (kids, adults, women, men).

Neckties: neckwear consisting of a long narrow piece of material worn (mostly by men) under a
collar and tied in knot at the front.

Suit: is a set of garments made from the same cloth, usually consisting of at least a jacket and
trousers. Lounge suits (also known as business suits when sober in color and style), which
originated in Britain as country wear, are the most common style of Western suit.

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Undergarments: are clothes worn under other clothes, often next to the skin. They keep outer
garments from being soiled by bodily secretions and discharges, shape the body, and provide
support for parts of it. In cold weather, long underwear is sometimes worn to provide additional
warmth.

Some undergarments are intended for erotic effect. Special types of undergarments have
religious significance. Some items of clothing are designed as undergarments, while others, such
as T-shirts and certain types of shorts, are appropriate both as undergarments and as outer
clothing. If made of suitable material, some undergarments can serve as nightwear or swimsuits.

2.4. Characteristics of Garment

A. Characteristics of knitted garment

The knit garment is tougher and better able to withstand wear that Allows for stretch and
recovery as body moves; as a result it is known for comfort and ease of fit. The knitted garment
is softer and suppler because its thread is treated differently. Knitted is produced by using
needles to pull threads up through the preceding threads to produce fabric. Items such as
sweaters and stockings are made by the knitting method and will readily "give" in response to
pressure of the body. The disadvantage to the knit garment is that it is easily damaged by
pulling of one thread in the garment which will distort or even destroy the garment. An example
of this problem is seen by the "run" in stockings and "pulls" in a sweater.

B. Characteristics of woven garment

The woven garment is the most common in clothing construction and it has the ability to be more
versatile in its construction. Because of the ability to cut the material and shape it by means of
sewing, it is far more popular in the garment industry. Material made by weaving is thinner as a
rule and is not prone to raveling in handling.

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This allows the garment maker to cut shapes that are not ordinarily available to the knitted
garment. Garments made by this method can be embellished by any number of add on items such
as buttons, woven in patterns, or different types of lace and contrasting materials sewn to the
fabric.

Woven garment has less tendency to shrink than knits and do not stretch out. It is more difficult
to produce but it can use lower quality yarns and have superior resistance to wind.

2.5. Uses of Garment

Clothing protects against many things that might injure the uncovered human body. Clothes
protect people from the elements, including rain, snow, wind, and other weather, as well as from
the sun. However, clothing that is too sheer, thin, small, tight, etc., offers less protection. Clothes
also reduce risk during activities such as work or sport. Some clothing protects from specific
environmental hazards, such as insects, noxious chemicals, weather, weapons, and contact with
abrasive substances. Conversely, clothing may protect the environment from the clothing wearer,
as with doctors wearing medical scrubs.

Clothing performs a range of social and cultural functions, such as individual, occupational and
sexual differentiation, and social status. In many societies, norms about clothing reflect standards
of modesty, religion, gender, and social status. Clothing may also function as a form of
adornment and an expression of personal taste or style. In some societies, clothing may be used
to indicate ethnicity and cultural heritages.

2.6. Quality and Standard Requirement of the Commodity

In the garment industry quality control is practiced right from the initial stage of sourcing raw
materials to the stage of final finished garment. For textile and apparel industry product quality is
calculated in terms of quality and standard of fibers, yarns, fabric construction, color fastness,
surface designs and the final finished garment products. However quality expectations for export
are related to the type of customer segments and the retail outlets. According to the Ethiopian
quality standard authority, currently there’s size designation of clothes and standard sizing
systems for Ethiopia’s garment manufacturing. The content of this document will be annexed at
the end of the final document.

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3. MATERIALS AND INPUTS STUDY

Materials for garment manufacturing vary in type, quantity, composition, etc. based on specific
type of garments that might differ due to technological update and customer expectation among
others. As an overview these materials can be classified as main, accessories and trim materials
including packing materials. Further, given accessories and trim materials, main raw materials
classified as knitted fabrics, which are used for underwear and some other overcoat garments
such as T-shirts, polo shirts, blouson, etc.), as woven fabrics (production of woven fabric is
mostly experienced in Ethiopia), and nonwoven fabrics, which are mostly used for production of
overcoat garments, i.e., garments get in touch with human body rarely, such as Shirts, Suits,
Trousers, jacket, etc. In addition, the classification of the main raw materials can also extended
from fabrics back to yarn, because they are some garment products finished at knitting stage, for
example socks. Hence, given the above classification, sample of required materials are stated in
the table 3.1 below based on the sample of garment products (source: Ethiopian Textile
Development Institute). For further information, refer list of all raw materials in the Document
“Ethiopian Input output coefficient for Textile and garment products” prepared and approved by
Ministry of Industry.

For any garment product the following Materials and input is required:

A. Major raw materials

 Fabrics – woven, knitted and non woven fabrics, which can be used separately/in
combination, and this decision depends on producer preference.
 Yarn – includes cotton yarn, nylon yarn, etc – used for socks production
B. Accessories and trim – threads, zipper, button, resin (required in little quantity in
particular garments, for example for t-shirts), collar, etc.
C. Packing materials – Garment Packaging Pouches, poly bag, Carton box and P.P band.

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 Table 3.1 Sample of Garments and Corresponding Required Materials

Materials

Garment type Main materials Accessories and Trim Packing

materials

Pant Finished Knitted fabrics Las, elastic for waistband, label and Polyethylene
thread sheet and carton
box

Polo Shirts -Ladies, men’s, and Finished Knitted fabrics Thread, button and label >>
children polo shirt

T-shirts -Ladies, men’s, and Finished Knitted fabrics Thread and label >>
children T-shirt

Socks Cotton socks, Cotton yarn, and elastic yarn Thread, label, and hook >>

Nylon socks Nylon yarn (white), acid dye

Trousers Trousers made of leather Finished knitted and/or Woven Thread, Zipper and/or button, elastic for
& knitted fabrics and/or fabrics waistband (optional), and label >>
woven fabrics

Shirts Quilted shirt, and other Quilted Fabric and other woven Interlining for collar and cuffs, thread, Polybag
shirt types fabrics button and label

12
Suits Men's Suit Set of Two Fabric Solid/ Fabric Stripe/ Check, Thread, button, label, Tag, looper, hanger, Polybag
Piece (Jacket + Trouser) Lining Fabric, Pocketing Fabric, hanger clip, Logo tape up to 2", Waist
with lining Shoulder Pads, Sleeve head/ Felt Band Fusible up to 2", Loop Fusible up to
for Sleeve head and Canvas for 1", Hook & Eye, Polybag Sticker, Zipper ,
Sleeve head, Body felt, Canvas, Slider, Waist Band up to 2" or Fabric of
Under Collar felt, Woven Fusible pocketing description, Arm Hole Tape 2-
interlining, Non-woven fusible 5cm,Brakebind,Collarbind, and Double
inter-lining, and Non-woven non- fusible net
fusible interlining

13
 3.1. Description

3.1.1. Yarn

Yarn is made up of a wide variety of materials, ranging from synthetics such as acrylic, rayon,
nylon, acetate, Polyester and spandex, to natural fibers including various wools (from sheep),
cottons (from cotton plants), and silks (from silkworm’s cocoon), through spinning process.
Yarns are either further processed into knit/woven fabrics through knitting/weaving process, or
directly converted into non-woven fabrics (http://www.dummies.com).

A characteristic of yarn is typically determined by characteristics of materials they made up of

(fibers). In addition, the types of fiber used to manufacture the garment also tend to be identified,
which shows role of fiber in garment production, for example, fiber identification label to name
the fiber(s) used in the clothing.

Broadly, there are two bases of fiber classifications; on the basis of Length (Staple/Short –
cotton, jute, wool and Filament/Long – silk, nylon, polyester, rayon) and on the basis of Origin
(Natural Fibers – plant (cotton, jute, flax, and coir), animal (silk and wool), mineral (asbestos)
and Manmade Fibers – Regenerated (Rayon) and Synthetic fibers (Nylon, Polyester and
Acrylic)). Except silk, all natural fibers are short stranded. Regarding fibers quality, different
types of fibers have specific qualities — some good, some not so good. Often, manufacturers of
yarn/fabric blend different types of fiber to offset an undesirable characteristic their product. In terms of
durability, wrinkle resistance, absorbency and care, some fibers are characterized in the below table.

Table 3.2 Fiber characteristics in terms of Durability, Wrinkle resistance, Absorbency and Care
Fiber Name Durability Wrinkle resistance Absorbency Care
Acetate Poor Poor Good Dry clean
Acrylic Moderate Good Poor Machine wash
Cotton Very good Poor Excellent Machine wash
Nylon Excellent Excellent Poor Machine wash
Polyester Excellent Excellent Poor Machine wash
Rayon Moderate Moderate Good Machine wash gentle

Wool Moderate Excellent Slow/good Dry clean

Source: http://bolgerm.victorschools.org

14
As shown in the table 3.2 above, no sole fiber type fulfills all the required property sufficiently,
which signifies the use of yarn made of multiple fiber types with appropriate proportion be
provide product with required property.

3.1.2. Fabric

The term ‘fabric’ is a generic name for any material made through weaving, knitting, spreading,
crocheting, or bonding that may be used in production of further goods (garment, apparel,
etc.).Apparel manufacturing can employ either separate or combination of the three types of
fabrics; knitted fabric, woven fabric (light fabrics, e.g. fabric for suits, shirts, etc.) and non-
woven fabrics (heavy fabrics, e.g. denim and other military fabrics). Non-woven (matted
together) fabrics are sheet or web structures made by bonding together through entangling fiber
filaments (and by perforating films) mechanically, thermally, solvent treatment or chemically.
3.1.2.1. Knitted fabrics

Knitted fabric is unique in that it possesses a high order of elasticity and recovery. It can be
stretched to a considerable length and yet will gradually return to its original shape or
conformation. It is this feature of the fabric, plus its air permeability arising from its looped
structure, that imparts to it such desirable and appealing properties from the consumer's point of
view as:

(a) A diversity of constructions, and the variety of fibers and finishes available.

(b) Generally soft and light weight.

(c) Good drapability - knitted fabrics conform to the figure without constricting the wearer.

(d) A high order of wrinkle resistance. Creases in knitted fabric brush right out.

(e) Comfort - the knitted structure is porous and it allows the skin to breathe freely. Its elasticity
permits greater freedom of body movements

(f) Ease of care. Knitted apparel launders without difficulty.

(Source: http://admin.umt.edu.pk)

15
Knitted fabrics classification

There are mainly two bases of knitted fabrics classification; based on amount of stretch and
method of constructing knits.
 Based on amount of stretch of the knit

Based on amount of stretch, knitted fabrics are typically classified as firm (stable) knits;
moderate stretch knits, two–way stretch knits, and super stretch knits.
Firm, stable knits have very little stretch and are handled much like woven fabrics. These may
include double knit, sweatshirt knit, boiled wool, and raschel knit.
Moderate stretch knits are those that stretch about 25 percent in the crosswise direction.
Moderate stretch knits allow enough stretch for comfort but are not intended to conform to body
contours. These may include lightweight single knits such as jersey and warp knits such as tricot.
Interlock knits are lightweight and drapable, slightly heavier than jersey knit, and don’t curl at
the edge, making them easier to handle than jersey knit. However, runs may form on the
crosswise edge. Fleece is a double napped knit that has a moderate amount of stretch.
Two–way stretch knits may have up to 50 and 75 percent stretch in the lengthwise direction and
up to 50 to 75 percent in the crosswise direction. Typically used for leotards, swimsuits, and
bodysuits; they can also be used for other form fitting garments.
Super stretch knits stretch 100 percent or more in both directions. Spandex and latex add the
extra elasticity to these knits. Super stretch knits are used for performance enhancing sportswear
and ski wear (source: http://www2.ca.uky.edu).
 Based on method of constructing knits

Based on methods of constructing, knitted fabrics are classified as weft (or filling) knits and
warp knits.
i. Weft (filling) knits

Weft (or filling) knits are knits made through four basic stitches; flat or jersey stitch (also
sometimes called a plain knit), the purl stitch, the rib stitch, and the interlock stitch, which also
used in double knits.

Flat or jerseys knit fabrics– these type knits have visible flat vertical lines on the front and
dominant horizontal ribs on the back of the fabric.

16
The flat or jersey knit stitch is used frequently because it is fast, inexpensive, and can be varied
to produce fancy patterned fabrics. It is made with a variation of the stitch by using different
yarns or double – looped stitches of different lengths to make terry, velour, and plus fabrics, so
that run-resistant of the knit created. Knitted fabrics made through this method are also
applicable to make nylon hosiery, men’s underwear, and T-shirts.

Purl knit fabrics - look the same on both sides of the fabric. They are known by having many
attractive patterns and designs, and often used in the manufacture of bulky sweaters and for some
children’s clothing.

Rib stitch knits – characterized by having excellent elasticity because in these fabrics stitches
are drawn to both sides of the fabric. Rib knits are used for the “ribbing” which is usually found
at the lower edges of sweaters, on the sleeve cuffs, and at necklines. They are also used for a
variety of different kinds of garments.

Interlock stitch knits - are variations of rib stitch knits. The front and back of interlocks are the
same. These fabrics are usually heavier and thicker than regular rib knit fabrics. Knit fabrics
made through this method are paramount in production of garment that do not ravel or curl at the
edges.

Double knits - are fabrics made from the interlock stitch and variations of that stitch. The front
and back surfaces of the double knits have a rib like appearance. These fabrics are generally
firm, less adapt to stretch, more resilient, and heavier than single knits. They are also run
resistant and do not ravel. Often they are made from polyester and wool.
ii. Warp knits

Warp knit fabrics are constructed with yarn loops formed in vertical or warp direction. All the
yarns used for a width of a warp knit are placed parallel to each other in a manner similar to the
placement of yarns in weaving. The fabric has a flatter, closer, less elastic knit than weft knit and
is very often run resistant. There two common types of warp knits; tricot and raschel.

Tricot knits - are made almost exclusively from filament yarns because uniform diameter and
high quality are essential yarn characteristics. These fabrics are usually plain or have a simple
geometric design. The front surface of the fabrics has clearly defined vertical Wales, and the
back surface has crosswise courses.

17
General characteristics of tricot knits include softness, good drapability, non-raveling, and
elasticity. The wide range of textile products made from tricot knits include lingerie, sleepwear,
robes, men’s shirts, blouses, dresses, waitresses’ and nurses’ uniform, backing for bonded
fabrics, and automobile upholstery. Tricot knits are made predominantly from nylon, acetate, and
polyester fibers.

Raschel knits - are produced from spun or filament yarns of different weights and types. Most of
them can be identified by their intricate designs, the open-space look of crochet or lace, and an
almost three-dimensional surface effect design. Raschel knits are used for a diverse group of
products, including lace and lace trims, sweaters, thermal underwear, swimsuits, blankets, and
tennis nets (source: http://www.uen.org).
3.1.2.2. Woven fabrics

Woven fabrics are fabrics made through interlacing two or more yarns at 90 degree angles. They
are weave plain, twill, satin and basket types. They can be easily cut into different shapes and are
excellent in producing styles in garments. They are manufactured in different widths depending
on the end use.

Figure 3. 1: Interlaced direction and sample woven fabrics with corresponding garment
product

18
 3.1.3. Sewing threads

Thread is a tightly twisted strand of two or more ply of yarn that is circular when cut in cross
section. It is used for sewing purpose in home machines and commercial industry areas. About
95% of all sewing thread that is manufactured is used in commercial and industrial sewing.
Sewing thread is distinguished from yarn by the fact that thread is used to sew together garments
or other products, but yarn is the collection of fibers used to weave or knit in to a textile fabric.

Thread Selection

- Generally, threads are selected keeping the following things in mind.

- The manufacturer and the brand of the thread. For all the hard work you put in, you obviously
want the thread to be of good quality made by good manufacturers.

- The color number

- Its weight and the number of plies or strands that are twisted together

- The fiber content

-Whether or not the thread is mercerized. Mercerized cotton thread is put through a series of
processes causing the thread to swell, become round or straighten out. This increases the thread’s
luster as well as improves water/dye absorption. Since long stapled fibers respond best to
mercerization, it is usually those types of cotton that are used. Most threads currently
manufactured are mercerized.

3.1.4. Accessories and Trim

Normally garment accessories can be classified in three ways:

 Garment accessories/Basic accessories
 Decorative accessories
 Finishing accessories
A. Garment accessories/Basic accessories - are accessories that basic in garment industry, and
these include, Zipper, Interlining, button (for example: Snap button, Plastic button, Metal
button), Label (Main label, Size Label, Wash care label), Motif (Leather, Plastic, batch
Metal), Pocketing fabric, Lining, Velcro, Elastic, Cord, Ribbon, Toggles, Rivet and Collar
bone. Type and quantity to be used depends type of the garment.

19
Button is a small disc, typically round, object usually attached to an article of clothing in order
to secure an opening, or for ornamentation.

Zipper or (zip fastener) is a popular device for temporarily joining two edges of fabric. It is used
in clothing (e.g. jackets and jeans), luggage and other bags, sporting goods, camping gear (e.g.,
tents and sleeping bags), and other daily use items.

Lining is one kind of trimmings which is used underside of garments and use in next to skin.
Interlining is a layer of flannel fabric sewn in between the face fabric and the standard lining.
Interlining provides insulation and also adds a luxurious weight and softness, improves the drape
of the fabric, and protects fragile fabrics. It is a popular choice with silk draperies.
B. Decorative Accessories – used to decorate the garment and these includes, Elastic tape,
Buttonhole tape, Piping, Velvet ribbon, Fringes, etc.

Trimmings: Those accessories which are used in sewing section are called trimmings, are
general name for a patterned, woven or knitted ribbon in cotton, silk, wool, or man-made fiber.

Scalloping, Rick-rack: Narrow bowed, zigzag, or scalloped ribbon, plain or multi-coloured in

cotton or man-made fibers for edge trimming of traditional costumes and children's wear.

Elastic tape: It is an elastic cotton strip. It is highly elastic, flat, braided band containing rubber
or elastomeric fibers.

Buttonhole tape: Broad elastic tape with buttonholes located in the center.

Piping: it is Cotton or linen plain woven ribbon about 1 cm wide, used as a tailoring aid for
edges, reveres, and collars.

Moiré ribbon: Cotton, silk or man-made fiber ribbon with a moiré pattern for hat bands and
bows.

Seaming tape - include cotton or viscose twill woven tape for stabilizing seams.

Welted tape: cotton or viscose tape with a narrow welt at the edge.

Ribbed tape: include cotton, silk, or viscose tape with pronounced ribs for decoration or for
waistbands.

Velvet ribbon: Cotton, silk or viscose narrow-woven velvet; sensitive to handling.

20
Bias binding: Tape cut on the bias (diagonally) in various widths and materials, plain or
patterned, either flat or folded for use as binding.

Stamped tape: Interlining tape with pre-stamped marks to show sewing width and seam
allowance.

Taffeta ribbon: Filament yarn ribbon, plain or check patterned, for ribbon bows.

Galloon: A particularly supple, plain or patterned braided ribbon for piping or binding in
outerwear.

Fringes: A narrow edging of projecting yarns which are not woven into the fabric, in viscose,
wool, or silk.

Cords: Circular braided materials of various thicknesses in viscose, cotton or synthetics. Used as
decoration for clothing, in household textiles, and in sporting goods.

Tassels: Expensive, hand-made articles in silk or viscose. A combination of fringes, cords, and
braids.

Rosettes: Decorative items used either alone or in combination with ornamental textiles.

Soutache: A moldable flat braid with two ribs in silk or viscose used for formal clothes.

Pompons: Bunches of wool, silk or synthetics used as trimmings, hanging alone or in groups.
C. Finishing accessories – these are accessories required to finish the garment and vary in
selection as well as in quantity based type of garment. These accessories include, hang tag,
Price tag, tissue paper, PP belt, Tag pin, Plastic clip, Collar insert, Back board, Necks insert,
etc. (Source: http://textilelearner.blogspot.com)

3.1.5. Packing materials

The packaging include to transport and distribute the products from the factories to distribution
centers to retail stores as well as the retail packaging that goes to the consumer. Packing is
important aspect of a given garment, and plays a great role in providing care and advertising (the
price ticker, hangtag, bar cod stickers, Brand name, where it made, ratio of the fabrics) so that
one can easily understand about the product. These materials are varying sizes and thicknesses
(which can be customized as per the clients' requirement and necessity), and characterized by
lightweight, high durability, excellent strength and temperature resistant.

21
Hence, packing materials for garment can classified based on garment types; and some of them
among others include:

 Garment Packaging Pouches – for packaging of varied apparels and garments

 Men's Suits Packaging Materials - useful to package the corporate, professional, party,
casual and wedding suits. It gives complete protection to the suits from dust, moisture,
germs and other hazards.

 Shirt Collar Band and Strips - highly useful in the process of packaging the collar & bow
used in shirts.

 Polyethylene plastic and acid - free cardboard boxes

 Poly bags /Master poly bag/ Blister poly bag

 Cartons - Inner and Outer carton, for safety

 P.P band, for binding the carton

(Source: https://www.indiamart.com)

22
 Table 3. 3 Type and Source of packing material used for garment manufacturing
Sr.no Types of packing Unit of measurement Source
Domestic Import
1 Suit cover pcs 
2 Hanger “ 
4 Collar supporter “ 
5 pins Pk 
6 Poly bag Kg 
Carton box pcs 

Source: - Previous Garment commodity study

3.2. Production and Import of Materials

3.2.1. Production of yarn, fabrics and sewing thread in Ethiopia

Ethiopia is known for textile manufacturing including yarn, fabrics and thread. Currently many
companies are engaged on production of yarn, fabrics and sewing thread to satisfy the rising
demand of the garment producers as well as other possible demanders.
Production during GTP I (2003 E.C – 2008 E.C) show an increasing; yarn (25%), fabrics (24%),
and sewing thread 290%.
Table 3.4 Domestic Production of yarn, fabrics and sewing thread, 2003 E.C to 2008 E.C
S. Product Unit GTP I (E.C) Domestic Production
No List 2003 2004 2005 2006 2007 Growth
Rate
1 Yarn (’000KG) 2,047 2,671 7,867 10,808 5,047 25%

2 Fabrics (’000sq.m) 12,433 19,808 28,795 39,042 29,446 24%

3Sewing TONS 14 2 791 791 3,238 290%

Thread
Source: Ethiopian Textile Industry Development Institute in reference to CSA

Ethiopian Textile Industry Development Institute had prepared yarn and finished fabrics
production plan for GTP II. As shown in the table 3.5 below, production of yarn, woven and
knitted finished fabrics is expected to reach 313 thousand tons, 370 million meters and 141
thousand tons respectively at the end of GTP II period.

23
 Ta
Sr. No. Raw Materials Type Measurement 2008 2009 2010 2011 2012
ble
1. Yarn in thousand ton 90 128 177 238 313
3. 5
2. Woven finished fabrics in million meters 132 173 226 291 370
3. Knitted finished fabrics in thousand ton 51 66 87 111 141
Total 273 367 490 640 824
GTP II, Domestic Production Plan of Yarn and Finished Fabrics, 2008 E.C -2012 E.C

Source: Ethiopian Textile Industry Development Institute

3.2.2. Import of materials

Ethiopia imports accessories for production of garments and other textile products. In addition,
import of locally available raw materials also made due to limitations in terms of quality and
quantity. Regarding quality, production of export oriented garment depends on taste and
preference of customers (importing countries) that includes detail description of the product. But
most of the time what customers expected and locally available raw materials to produce the
expected product mismatch. Due to these factors and eager to compete the world market,
garment industries are forced to import quality raw materials from abroad (Hawassa Industrial
Park Development, in reference to companies currently engaged on garment production in the
park). The import trend 2012 to 2016 shows growth rate of 6% (fabrics and yarn), 4% (sewing
threads) and 5% (accessories). The import was mainly made from china, Italy, India, United
Arab Emirates, Germany and others. As shown in the table 3.4 above, domestic production of
fabrics, yarn and sewing threads; and import trend (table 3.6 below) for these similar materials
were increasing at a positive growth rate. As per information obtained from Ethiopian Textile
Industry Development Institute, export of textile and garment products is one of the major seven
pillars that Ethiopian government had taken into consideration in encouraging technology

24
transfer and developing specialized experience among others in the sector, in process of effort to
produce quality garment products to international market. The export oriented garment products
in turn require recruiting of quality raw materials from international market (due to quality
related problem in the domestic market) although growth of the current domestic production data
shows positive. This is the reason why the growth rate of domestic production (which demanded
by domestic market oriented garment producing companies) and import of raw materials on the
same direction (positive sign).

25
 Table 3.6 List and Quantity of Imported Materials 2012 to 2016
List of Imported Materials
Years Growth
Fabrics HSC Unit 2012 2013 2014 2015 2016 Rate (%)
Woven fabrics, with >=85%
carded wool or of fine animal
1 hair, >300g/m2 51111900 ('000kg) 1,956.20 1,332.54 1,526.53 1,523.10 627.58
Woven fabrics of high tenacity
yarn of nylon... or of
2 polyesters 54071000 ('000kg) 102.27 708.01 537.14 5,251.84 6,519.28
Woven fabrics, <85%
synthetic staple fibres +
3 cotton, nes, >170g/m2 55141900 ('000kg) 191.18 188.43 6.15 3.55 8.40
Woven Fabrics Of High
Tenacity Synthetic Filament
4 Yarn Of Viscose Rayon 54081000 ('000kg) 3.22 - 33.12 39.08 135.11
Woven pile and chenille
5 fabrics of other textiles, nes 58019000 ('000kg) 28.27 177.49 364.36 430.62 245.10
Woven fabrics of combed
wool or of combed fine animal
6 hair, nes 51129000 ('000kg) 15.55 0.33 25.36 7.48 0.31
Woven fabrics with >=85%
combed wool or of fine animal
7 hair, =<200g/m3 51121100 ('000kg) 186.54 59.20 0.13 0.62 0.32
Woven fabrics of synthetic
8 staple fibres, nes 55159900 ('000kg) 3.29 0.54 0.48 3.95 3.65
Printed woven fabrics of
synthetic yarn, >=85%
9 textured polyester 54075400 ('000kg) 94.32 197.18 610.50 466.70 424.64
Printed woven fabrics, <85%
synthetic filaments, mixed
10 with cotton 54078400 ('000kg) 8.86 - 6.66 - -

26
List of Imported Materials Years Growth rate
Fabrics HSC Unit 2012 2013 2014 2015 2016 (%)
Printed, dyed or coloured
woven fabrics, >=85%
11 polyester staple fibres 55121900 ('000kg) 20.36 42.76 0.91 0.03 0.42

12 Woven fabrics of noil silk 50071000 ('000kg) 0.10 0.17 - 0.00 -

Dyed woven fabrics of
synthetic filament yarn,
13 >=85% textured polyester 54075200 ('000kg) 190.93 207.79 187.51 217.32 184.51
Dyed woven fabrics, <85%
14 artificial staple fibres, nes 55169200 ('000kg) 0.48 - - - 0.01
Narrow woven fabrics of man-
15 made fibres, nes 58063200 ('000kg) 256.66 224.29 433.62 433.32 533.32
Narrow woven fabrics of other
16 textiles, nes 58063900 ('000kg) 137.49 247.27 319.88 428.64 312.93
Narrow woven fabrics, with
>=5% elastomeric yarn or
17 rubber thread 58062000 ('000kg) 73.83 134.90 176.00 195.51 517.99
Other Woven Fabrics of Synth'c
Yarn >=85% Textrd/Non-
18 TextrdPolystrFilmnt 54076900 ('000kg) 15,166.41 12,320.58 13,427.11 13,679.83 15,756.52
Warp pile fabrics, cut, of man-
19 made fibres, nes 58013500 ('000kg) 22.13 1.75 - - -

Fabricated asbestos fibres;...

compressed asbestos fibre
20 jointing, in sheets or rolls 68129300 ('000kg) 6.79 0.59 11.77 10.20 8.32

Other fabricated asbestos

21 fibres 68129900 ('000kg) 76.69 46.45 22.51 31.19 17.82

27
List of Imported Materials Years Growth rate
Fabrics HSC Unit 2012 2013 2014 2015 2016 (%)
Tyre cord fabric of high
tenacity yarn of nylon or other
22 polyamides 59021000 ('000kg) 221.73 363.98 464.09 517.46 500.58
Tyre cord fabric of high
23 tenacity yarn of viscose rayon 59029000 ('000kg) 1.01 - 54.00 - 0.02
Textile fabrics impregnated...
24 with plastics, nes 59039000 ('000kg) 736.71 658.52 438.34 490.66 413.74
Textile fabrics coated with
gum or amylaceous substances
25 for books, etc 59011000 ('000kg) 10.83 0.01 0.01 20.45 0.91
Textile Fabrics Combined
With Rubber/Leather/Other
26 Material Techn. Purposes 59111000 ('000kg) 41.81 8.19 4.64 11.96 24.66
Textile fabrics impregnated...
27 with polyvinyl chloride 59031000 ('000kg) 775.69 830.21 844.61 1,231.20 946.21

Plain weave fabrics, <85%

polyester staple fibres +
28 cotton, >170g/m3 55141100 ('000kg) 75.39 20.70 8.20 3.41 -
Needle loom felt and stitch-
29 bonded fibre fabrics 56021000 ('000kg) 4.55 0.02 18.92 208.17 50.46
Pile fabrics of man-made
fibres, nes, knitted or
30 crocheted 60019200 ('000kg) 318.99 410.32 112.09 442.20 197.64

31 Rubberized textile fabrics, nes 59069900 ('000kg) 6.68 1.36 0.35 11.57 11.38
Textile fabrics otherwise
impregnated...; painted
32 canvas... 59070000 ('000kg) 1,308.58 244.44 232.54 98.69 86.19

28
List of Imported Materials Years Growth rate
Fabrics HSC Unit 2012 2013 2014 2015 2016 (%)
Knitted or crocheted
rubberized textile fabrics
33 (excl. adhesive tape) 59069100 ('000kg) 2.26 1.59 2.09 1.72 28.74
Other Knitted or Crochetted
34 Fabrics 60029000 ('000kg) 3.49 2.46 0.38 5.17 14.76

Total ( all fabric types) ('000kg) 22,049.28 18,432.07 19,870.01 25,765.62 27,571.51 6%
Yarn
Yarn, <85% polyester staple
1 fibres, nes, nprs 55095900 ('000kg) 17.00 20.39 76.17 62.39 32.12
Yarn of artificial staple fibres,
2 put up for retail sale 55113000 ('000kg) 8.61 - - - -
Yarn, <85% polyester staple
fibres, with artificial staple
3 fibres, nprs 55095100 ('000kg) 136.07 68.76 27.01 101.89 124.21
Gimped yarn and strip;
4 chenille yarn; loop wale-yarn 56060000 ('000kg) 72.88 0.46 0.00 1.24 3.12
Textured yarn of polyesters,
5 nprs 54023300 ('000kg) 1,300.13 1,976.97 3,173.47 4,252.74 7,323.69

6 Textured yarn, nes, nprs 54023900 ('000kg) 88.28 207.29 422.32 475.58 126.01
Multiple or cabled yarn,
>=85% staple fibres of nylon,
7 etc, nprs 55091200 ('000kg) 90.27 0.13 0.38 1.61
Multiple or cabled yarn, nes,
8 nprs 54026900 ('000kg) 525.47 700.93 568.44 495.89 468.53

List of Imported Materials HSC Unit Years Growth rate

29
 Yarn 2012 2013 2014 2015 2016 (%)
Single synthetic yarn, nes,
9 with =<50turns/m, nprs 54024900 ('000kg) 261.42 294.93 21.92 9.93 110.23
Metallized yarn, being textile
10 yarn, or strip, etc, in thread 56050000 ('000kg) 30.63 39.47 27.32 66.35 58.85
Multiple or cabled yarn of
11 polyesters, nprs 54026200 ('000kg) 26.61 327.56 142.27 186.82 118.88
Cotton yarn (excl. sewing), put
up for retail sale, with <85%
12 cotton 52079000 ('000kg) 0.24 1.68 2.59 0.23
Uncombed single cotton yarn,
with <85% cotton, nprs,
13 <=14mn 52061100 ('000kg) 171.42 183.92 63.36 - -

High tenacity yarn of

14 polyesters, nprs 54022000 ('000kg) 58.93 25.93 232.13 346.94 597.16

Multiple or cabled yarn,

>=85% acrylic or modacrylic
15 staple fibres, nprs 55093200 ('000kg) 11,125.43 7,932.60 9,294.48 9,237.37 8,086.24

Multiple or cabled yarn of

16 viscose rayon, nprs 54034100 ('000kg) 117.03 169.76 628.67 547.19 845.71
Other synthetic filament yarn
17 of nylone or other poly amides 54021900 ('000kg) 32.61 3.66 29.86 135.22 40.84

Total ( all yarn types) ('000kg) 14,063.02 11,954.30 14,707.56 15,922.54 17,937.41 6%

List of Imported Materials HSC Unit Years Growth rate

30
 Sewing Threads 2012 2013 2014 2015 2016 (%)
Sewing thread of synthetic
1 filaments 54011000 ('000kg) 764.75 1,296.45 886.24 999.08 1,225.67
Sewing thread of synthetic
2 staple fibres 55081000 ('000kg) 446.34 449.24 235.44 140.85 121.85
Sewing thread of artificial
3 staple fibres 55082000 ('000kg) 14.88 40.73 19.96 31.03 28.13
Sewing thread of artificial
4 filaments 54012000 ('000kg) 16.32 26.05 37.51 42.14 54.55
Cotton sewing thread, with
<85% cotton, not put up for
5 retail 52041900 ('000kg) 0.10 7.87 2.58 3.22 7.81
Cotton sewing thread, put up
6 for retail sale 52042000 ('000kg) 3.15 1.13 3.50 9.22 21.81

Total ( all Sewing thread types) ('000kg) 1,245.54 1,821.47 1,185.24 1,225.54 1,459.81 4%
Accessories
148.8 210.5 191.8 336.9 180.4
1 Clothing accessories, nes 62171000 ('000kg) 9 1 8 3 7 5%
Source: ERCA, 2012 to 2016
Note: Other woven fabrics include chiffon lady’s polyester material, fabric polyester taffeta, etc., Multiple or cabled yarn, >=85%
acrylic or modacrylic staple fibers include trousers waist underlining and lining and others stated in generic form are detailed in the
parameter.

31
 3.3. Demand for Raw Materials

3.3.1. Fabrics and yarn

Demand for fabrics and yarn comes from local garment manufacturing industries and export. During GTP
I, export demand for yarn is growing with 25%, but fabrics export decreased by 11% (from 2,687,000 kg
in 2003 E.C to 1,680,000 in 2007 E.C) which shows shortage of fabrics.

For GTP II, garment production, and yarn and fabrics export plan is shown in table below.

Table 3. 7 GTP II production and export plan of garment, yarn, and fabric

Description Measurement
2008 2009 2010 2011 2012
Woven in million
garment number 68 88 106 129 140
Garment Knitted in million
garment number 99 156 204 275 314

Yarn in million Kg 2.24 3.30 6.37 11.90 22.34

Export
Fabrics in million Kg 3.74 7.05 13.92 17.15 34.39
Source: Ethiopian Textile Industry Development Institute and own computation

3.3.2. Sewing thread

Sewing thread is used for hand sewing and in home sewing machines. Ninety-five percent of all sewing
thread that is manufactured is used in commercial and industrial sewing. Industrial sewing thread issued as
an input in shoe industry, knit wear factories, furniture and upholstery, blanket manufacturing for ribbon
sewing and rural household for needle sewing and mending clothes. Similar to yarn and fabrics, demand
for sewing thread is not totally satisfied by locally due to different factors, that is why import is made.

3.4. Demand supply gap

It is impossible to quantify demand supply gap due variety in garment products that in turn require its own
specific input output coefficient conversion factor and availability of integrated textile factories that might
result in double counting problem.

32
 Although these factors hinder to quantify demand for yarn, fabrics and sewing threads in terms of
quantity, and comparison with production, there are factors that might signify existence of demand supply
gap in terms of quantity or quality, i.e., garment companies can prefer and source high quality raw
materials from abroad, regardless of volume of raw materials in domestic market, especially order based
export oriented companies.

3.5. Problems and Opportunities

3.5.1. Problems

Raw materials quality problem

 The garment factories sourcing their finished fabrics and sewing threads from abroad because in
sufficient local supply (Quality and Quantity)

Availability problem
 Domestic factories are not capable of manufacturing quality fabric especially for export
 Less investment in weaving and knitting subsector 0

Other problem
 Synthetic sewing thread currently is not produced in the country

3.5.2. Opportunities

 Suitable Climatic and Natural Resources for cotton plantation

 Importation of inputs through second schedule custom duties
 Supply of accessories through bonded warehouse input supply scheme

3.6. Market channels of Raw Materials

The market arrangement of raw materials for garment production, there are two main ways in which the
raw materials are flowing.

3.6.1. Raw materials for full production (from raw materials to producing)

This is when the producer purchase raw materials and produce by his own and supplying for market. In
this case the source of raw materials can be import and local, and the producer is paying 20% tax and
covered the transport. The paying system is by LC method.

33
 Figure 3. 2: Marketing channels of raw materials for integrated production

3.6.2. Raw materials for order base production

This channel is when the firm is producing by order in which raw materials, all inputs and accessories are
fully supplied by the other party which makes agreement with the producer. The local producer is only
cutting and making based on the agreement, and in this case, the import raw materials is tax free, producer
do not cover raw materials transportation cost. But, if raw material is from domestic market, transportation
cost is covered by producer.

34
 Figure 3. 3: Market channel for raw materials when production is order based

NB: Bonded system: - when raw materials are totally imported by the auction agreed (the foreigner) and
Ethiopian inland revenue authority and garment industry (local producer) together control the warehouse
not to sell locally all the imported fabrics and controlling the entry and the exit of all fabrics and the
products.

Voucher system: The controlling mechanism that taken by Inland Revenue yearly imported fabrics must
re-exported after the garment is sewed must reported yearly by the manufacturer for Inland Revenue
authority. In both cases interest is free (Previous Garment Commodity study).

35
 3.7. Raw materials import price trend

Raw materials price trend for 2003 – 2007 E.C shows increasing rate except for yarn which is decreasing
at rate of (10%). As shown in the table below, the price of yarn is decreasing linearly from period to
period but price trend of other materials is increasing at decreasing positive growth rate (up and down).

The decreasing average growth rate of yarn does not panacea to show availability of quality yarn in the
domestic market because yarn import data is growing with growth rate of 6% as indicated in table 3.6;
rather it indicates availability of quality yarn internationally at competitive price.

Table 3. 8: Average Price Trend of Yarn, Fabrics and Sewing Thread, 2003 E.C – 2007 E.C
Type of Raw Material and their Price/Kg
Years (E.C) Yarn (Dollar/kg) Fabrics (Dollar/kg) Sewing Thread (Br/Kg)
2003 4.46* 8.55* 62.76
2004 3.33 6.24* 62.28
2005 2.98 5.25 84.83
2006 2.60 5.48 63.36
2007 2.42 5.47 64.58
Average/Geometric Growth Rate (10%) 2.07% 0.72%
Source: Team computation (unit conversion) based on ERCA data
*Compared to the three years data (2005 E.C – 2007 E.C), the first two years data are outlier because their
variation from year to year is highest. Hence, these are excluded while computing the import growth rate
of fabrics. In addition, the import price data of yarn for 2003 is outlier (*) compared to others.

36
4. GARMENT MANUFACTURING PROCESS & TECHNOLOGY SELECTION

A complete garment has to face several processes from its order receiving to packaging and storage.

It starts early from designing and development stage because it affects the cost of garment products. After
receipt of the raw fabric, the design of the garment will be set and the necessary cuts will be made on the
fabric as per the design. The cut fabric will then be transferred into a sewing process. Then after, it will be
transferred into the finishing department where the sewn materials pass different activities depending on
the product to be made before being sent to the packaging section.

The complete work flow of the process can be seen below here and will be elaborated in the coming
subchapters.

Figure 4. 1：General Process flow for garment manufacturing

37
 4.1. Garment processing from fabric

4.1.1. Overview of Pre-Production

4.1.1.1. Design

The design stage in garments manufacturing is the stage where the products to be made are decided and
put into a clarified drawing suitable to be changed into production.

The design process require a high level of experience and professional knowledge in order to achieve
quality results and a profitable product, so unless a designer is extremely well rounded and experienced in
the apparel industry prior to launching their own line, it is prudent to seek out consultants who can help
you navigate the process.

Most garment manufacturing companies in Ethiopia use readymade designs that are bought from
experienced designers and design companies.

If the market for the finished product is order based, then most of the time, the design is provided by the
buyer. After placing an order buyer send the technical sheet and art-work of an order to the merchandiser.

4.1.1.2. Pattern Making

Pattern making is the activity of transferring the design we want to make on the raw fabric from the design
stage onto the actual fabric. It is a diagrammatic representation of the garment used for reproducing
garment to fit a specific figure.

Although there are many ways literatures classify pattern making activities, it is most convenient to
classify pattern making activity depending on the process as manual pattern making and CAD
(Computerized) pattern making activities.

Manual pattern making is not recommended nowadays because they inhibit large scale production as it is
not convenient and safe to make marking on a piled number of fabrics based on manual drawings. But
many companies in Ethiopia still use manual pattern making activity despite it reduce productivity and
efficiency.

38
 CAD (Computerized) pattern making

The process starts from getting the design pattern from the design team. Then after, the CAD pattern
making section will pass through different steps to make a final plot of design on a paper which will be
used in the cutting department. The process is illustrated below

Receiving tech pack: Tech pack that contains all the information regarding the style illustration, size,
trims, colors, stitch and seam class, fit, sampling details, packing and finishing details is received from the
design team.

Make basic pattern: Basic pattern is made by using the design software in one base size.

Figure 4. 2: Making of basic designs of cuts needed based on the design pattern

Digitizing: This base size is then digitized on the digitizer board. A digitizer is a table sensitive data
(pattern) input device that allow users to select and draw images with a special pen called a stylus or a
mouse. This unit consists of a digitizing work table and a free floating cursor which are used to convert
shapes into the format understood by the computer.

Figure 4. 3: Usage of degitizer board to input the basic design into the design software

39
Fit sample making: The main target of making a fit sample is to follow the details instruction about that
garments style. After making, it’s sent to the buyer to rectify (in case of order based market), or to the
design team. It is done manually.

Grading: After confirmation of the sample by the design team or the buyer, the basic patterns are
transferred to the computer on pattern design studio. Patterns initially are made in only one size. We need
to proportionally increase or decrease the size of a pattern, while maintaining shape, fit, balance and scale
of style details. Getting correct fit and drape of a garment but also maintain the measurements as graded
specs is essential. Using the CAD system, the pattern is resized according to a predetermined table of
sizing increments (or "grade rules").

Plotting：The computerized plotter can then print out the pattern in each size.

Figure 4. 4: A plotter printing cut patterns on a paper

After pattern making is finished, the developed pattern prints (mostly called marker papers) will be sent
to the production department where it will be used for cutting purposes.

4.1.2. Production Stages

4.1.2.1. Fabric spreading (fabric relaxing)

Spreading is the process of unwinding large rolls of fabric onto long, wide tables and laying them in
superimposed plies of specified length. Putting the fabrics in lay form helps to cut the fabric properly. The
number of lays depends upon the number of garments desired and the fabric thickness.

40
 Figure 4. 5: Fabric spreading table

After the required number of fabric lays are put on the spreading table, marker paper (the print outs of
patterns from the plotter) is laid on the top of the fabric layers. This process is sometimes called marker
making.

4.1.2.2. Fabric cutting

Cutting department is an important department in readymade apparel industry. It is the process of

separating the fabric as a replica of pattern pieces. Fabrics have to cut here according to marker of
garments.

There are wide varieties of cutting tools and machine, starting from hand scissors and manual cutting
machines to semi automatic and full automatic cutting machines. Most companies in Ethiopia use semi-
automatic cutting machines which are effective equipments.

Semi automatic cutting machines and Automatic cutting machines are thus the widely used equipments in
different manufacturing companies all over the world and recommended for manufacturing activities these
days.

41
Some widely used cutting machines include, Straight knife cutting machine, Band knife cutting machine,
Round knife cutting machine, Die cutting machine, Notcher cutting machine, Drill cutting machine,
Computer controlled knife cutting machine, Laser beam cutting machine, Water Jet cutting machine, and
Plasma torch cutting machine.

Figure 4. 6: Automatic and manual fabric cutting

4.1.2.3. Sorting and bundling

After cutting the fabric, layers are sorted size-wise and color wise. The sorter sorts the patterns according
to size and design and makes bundles of them. This step requires much precision because making bundles
of mismatched patterns can create severe problems.

On each bundle there are specifications of the style size and the marker too is attached with it. Bundles are
then kept on inventory tables, before these are sent to undergo the next process.

Bundling is carried out after the cut parts passed the required operations based on the style like printing &
embroidery, fusing, quality audit & finally all the parts including some accessories are bundled together
and delivered to sewing section.

This process can also be done manually and many factories in Ethiopia use the manual sorting and
bundling method. Although the automated system may improve system performance, the manual system
can also be used effectively.

42
 4.1.2.4. Pre-sewing Activities (Fusing, Printing & Embroidery)

 Fusing
Fusing is an alternative method of joining fabric. It is widely used to attach the interlining. Resin coating
of interlining melted by heating into the fabric under pressure and when it becomes cool and hard; both
fabric and interlining are attached strongly. Fusing is controlled by four processing components such as
temperature, time, pressure and cooling.

Figure 4. 7: Industrial automatic fusing machine

 Printing

There are many types of fabric and garment printings available like; plastisol print, high density print,
suedo ink print, discharge print, sticker print, pigment print, glitter print, metallic print and so on.

The best way to assess the printing process for this study will be to look at the process by the machinery it
is done with, thus here under are listed the most widely used machinery used for garment printing.

 Screen printing:- This is a mechanical process where ink is mechanically applied to a substrate
with the use of a screen and squeegee.

43
 Figure 4. 8: Screen printing process

 Carousal printing machine: - These machines will be available both in automatic and semi
automatic models and with 4, 6, 8, 10 and, 12 multi color models. The double spring model gives
the customers a maintenance free performance of the machine.

Figure 4. 9: 6 color carousal printing machine

44
  Electric curing machine: - Electric curing used for fixing the printing paste on to the printed fabric.

Figure 4. 10: electric curing machine

 Embroidery

Embroidery is the handicraft of decorating fabric or other materials with needle and thread or yarn.
Embroidery may also incorporate other materials such as, pearls, beads, quills, and sequins. Today,
embroidery is most often seen on caps, hats, coats, blankets, dress shirts, denim, stockings, and golf shirts.
Embroidery is available with a wide variety of thread or yarn color.

Figure 4. 11: Big industrial embroidery machine (33 head)

45
 4.1.2.5. Sewing

Sewing is the dominant process in garment assembly. Satisfactory garment assembly and performance
depend on correct choices of stitches, seams, threads, needle, sewing machine and fabrics to be sewn.

Selection of appropriate stitch, seam types and other factors varies with product component, end use,
quality level and equipment available. As it is labour intensive process, proper controlling and training of
the operators is most important for assembling of quality garment.

Sewing operation is a manual process and sewing machinery used varies from product to product. The
different sewing machinery for different products has been compiled in the machinery list section.

There are two major types of garment construction methods:

 Assembly line work

 Tailor method

Assembly Line Work

This method is most commonly used by garment industries. In this method the operator is specialized in
sewing only one part of the garment and so to complete the entire garment a number of operators are
required in the production line.

Figure 4. 12: Assembly Line System

46
 Tailor Method

In this case the whole garment is sewed by one operator but specialized operation, like over locking,
hemming, bar tacking, button holes and sewing are done by separate workers.

It is mostly practiced by in house tailors and small garment factories and in sampling room of garment
industries.

4.1.2.6. Garment Finishing Department

The so called finishing department in the garment industry refers to the department where the ready sewn,
and trimmed garments from the sewing lines are going to iron pressed, tagged, and pass through other
activities. This department mainly deals with the operations which make the garment presentable and
saleable to the customers in the stores.

The widely used steps of garments finishing are as follows;

Goods Received from Sewing Section

At first, finished garments are received from sewing section as per order quantity. Good received from
sewing section is the first step to finishing section.

Thread Sucking by Machine

In this step, extra lose sewing thread are sucked from the garments. Threads are suckered by two systems.
One by done by hand which is manual system and the other is done by sucking machine.

Washing & drying

An industrial apparel washing is a technology. It is the technology which is used to modify the outlook,
appearance; comfort-ability and design of the readymade apparel made from solid color dyed or pigment
printed fabric.

There are many varieties of industrial apparel washing; such as, normal wash, pigment wash, bleach wash,
acid wash, sand blasting, super white wash, etc…

Apparel washing industries need the following machines for various types of apparel washing. The most
common machines and units are: garments washing machine, garments drying machine, sand blasting
unit, boiler for steam generation, and wash water treatment plant.

47
 Ironing

Ironing is a finishing process done by a cloth to heat and pressure with or without steam to remove creases
and to impart a flat appearance to garments. Ironing process is also called as pressing process. After
completing ironing, garments have to be folded.

Attach Price Tags and Accessories

After above process, different types of tags and accessories are attached with the garments as per buyer
comment. For an export order, it is a must to attach price tags with the garments.

Metal Detection

Garments are passed through into the metal detection m/c for metal check. Now most buyers
recommended using metal detector for garments more safety. To use metal detector for kid’s item is
must.

Folding

Garments are folded according to buyer directions in a standard area. There are four types of folding in
garments. They are as follows-

 Stand up

 Semi stand up

 Flat back

 Hanger pack.

4.1.2.7. Packaging

Packaging is mostly done using polyethylene bags and corrugated box (cartons) together in the garment
industry.

Some information like carton box no, size, shipping mark, and destination are printed on the cartoon.

48
 4.2. Garment processing from Yarn

4.2.1. Socks processing

Unlike woven garments manufacturing which start manufacturing process from fabrics, socks processing
starts form thread knitting.

Socks could be knitted from natural fiber (cotton, wool), textured yarn of nylon, mixed spun yarn of
synthetic fiber and natural fiber, and mixed knit of synthetic filament textured yarn and spun yarn of
natural fiber.

The manufacturing process begins with raw material preparation, and then winding of the raw materials,
yarn into cone will take place. In order to make the yarn slide easily it is necessary to apply oils during
winding operation. The yarn is then set on the designated sock knitting machine and is knitted into either
sock or stocking shape. The open part of the stock that comes out of the knitting machine is then linked in
a linking machine. Socks which have gone through the various processes will have oil stains and dust.
Hence, to begin with they are washed to get rid of oil stains and dust. They will then be dried in a drier
and inspected.

Finally, the socks which pass final inspection are arranged into pairs by matching their size, color and
pattern and then packed into boxes.
4.3. Garment Manufacturing Machinery requirements
Table 4. 1: List of machineries and equipments along with their purpose
S/N
Machine/Equipment type Purpose

A. Major Machinery

I. Pre-Production

 Pattern making(CAD pattern making tools)

1 Pattern making software
2 Computers
A software used for making a pattern, grading and marker
Any computer used for installing soft ware and run it. This
computer technology has enabled the clothing design, pattern
construction & product development to be integrated into a
continuous process.

49
 Digitizer is a table sensitive data (pattern) input devices that
allow users to select and draw images with a special pen called
a stylus or a mouse.
3 Digitizer
This unit consists of a digitizing work table and a free floating
cursor which are used to convert shapes into the format
understood by the computer.
A plotter is a computer hardware device much like a printer
that is used for printing vector graphics. Instead of
4 Plotter toner, plotters use a pen, pencil, marker, or another writing tool
to draw multiple, continuous lines onto paper rather than a
series of dots like a traditional printer.
II. Spreading and Cutting Section

Manual Fabric inspection

7
Machine For fabric inspection
Manual Spreading table and
8
cutting table
Semiautomatic Spreading
9 For laying (Spreading) fabric plies
and Cutting Table
Automatic spreading table
10
with turning table
Cutting Machine- Straight
11
Knife
For cutting fabric
12 Band knife cutting machine

Cutting Machine- manual

14 For cutting fabric ends when the specified lay length reached
end cutter

15 Rib Cutter For rib preparation with pre specified width

For cutting fabric in small quantities like single ply/single

16 Scissors
piece
Round Knife cutting For cutting fabric edges and for cutting parts in smaller
17
machine quantities

18 Die knife cutting machine For cutting interlinings

19 Drill and Notcher For making notch marks

50
20 Computerized Knife cutter

21 Computerized laser cutter Computer controlled cutting equipments

Computerized water-jet
22
cutter

23 Fabric clips For clipping fabric lays intact while cutting

III. Pre-sewing Activities

Hashima Fusing Press 90 For fusing interlining with main body fabric through the
24
cm application of temperature and pressure
Garment printing machine,
can be one of the following
 Carousal printing
25 machine To print different types of image on the garments
 Screen printing set
 Electric curing
machine
Automatic embroidery
26 To make different handicrafts on garments
machine

IV. Sewing and Accessory attachment

 Dress shirt

27 SNEC (Single needle with edge cutter) Collar run stitch

28 CTM (Collar turning machine) Collar turning

29 SNUBT (Single needle lock stitch with under trimmer) Collar top stitch

30 SNUBT (Single needle lock stitch with under trimmer) Band hem

31 SNUBT (Single needle lock stitch with under trimmer) Band set

32 SNUBT (Single needle lock stitch with under trimmer) Collar Band top stitch

51
33 SNEC (Single needle with edge cutter) Collar notch & trim

34 SNUBT (Single needle lock stitch with under trimmer) Collar content label

35 SNUBT (Single needle lock stitch with under trimmer) Cuff hem

36 SNEC (Single needle with edge cutter) Run stitch cuff

37 CTM (Cuff turning machine) Cuff turn

38 SNUBT (Single needle lock stitch with under trimmer) Top stitch

39 SNUBT (Single needle lock stitch with under trimmer) Sleeve placket attach

40 SNUBT (Single needle lock stitch with under trimmer) Sleeve tack

41 SNUBT (Single needle lock stitch with under trimmer) Sleeve box sew

42 KANSAI Front placket

43 SNUBT (Single needle lock stitch with under trimmer) Button placket sew

44 SNUBT (Single needle lock stitch with under trimmer) placket hem

45 SNUBT (Single needle lock stitch with under trimmer) placket attach

46 SNUBT (Single needle lock stitch with under trimmer) Yoke label attach

47 SNUBT (Single needle lock stitch with under trimmer) Sew pleat at BK

48 SNUBT (Single needle lock stitch with under trimmer) Yoke set

49 SNUBT (Single needle lock stitch with under trimmer) Sew w/c label

50 SNUBT (Single needle lock stitch with under trimmer) Shoulder joint

52
51 SNUBT (Single needle lock stitch with under trimmer) Collar attach

52 SNUBT (Single needle lock stitch with under trimmer) Collar finish

53 SNUBT (Single needle lock stitch with under trimmer) Sleeve set

54 SNUBT (Single needle lock stitch with under trimmer) Sleeve top

55 FOA (Feed of Arm) Side seam

56 SNUBT (Single needle lock stitch with under trimmer) Cuff attach

57 SNUBT (Single needle lock stitch with under trimmer) Bottom hem

58 BH (Button holing machine) Front BH & Cuff

59 BH (Button holing machine) Small BH

60 BA (Button attaching machine) Front & cuff BA

61 BA (Button attaching machine) Small BA

 T-shirt

62 Single needle lock stitch (SNLS) Attach main label to the back panel

63 4 Thread over lock (4TOL) Join Shoulder (with mobilion tape)

64 Single needle lock stitch (SNLS) Tack neck band to the body

65 4 Thread over lock (4TOL) attach neck band

66 Single needle lock stitch (SNLS) Attach neck tape to back part of the neck band

67 Single needle lock stitch (SNLS) Top stitch neck line

53
68 Flat lock Sleeve Hem

69 4 Thread over lock (4TOL) Attach sleeve

70 4 Thread over lock (4TOL) Side seam & Care label attachment

71 Single needle lock stitch (SNLS) Darning operation

72 Flat lock Bottom Hem

73 Manual Trim and Exam

 Polo shirt

74 Steam iron Placket iron

75 Single needle lock stitch machine (SNLS) Placket join
76 Over lock machine (OL) Rib placket servicing
77 Single needle lock stitch machine (SNLS) Lower placket 2 part join
78 4 Thread over lock machine (4TOL) Lower placket O/L
79 Single needle lock stitch machine (SNLS) Lower placket join & top stitch
80 4 Thread over lock machine (4TOL) Shoulder join & trim
81 Over lock machine (OL) Collar servicing & mark
82 Single needle lock stitch machine (SNLS) Collar tack to neck
83 4 Thread over lock machine (4TOL) Collar join
84 2 Needle flat lock machine (2NFL) Collar piping
85 Single needle lock stitch machine (SNLS) Collar top stitch
86 Single needle lock stitch machine (SNLS) Placket close & 1/16 top stitch
87 Single needle lock stitch machine (SNLS) Placket inner tack
88 Single needle lock stitch machine (SNLS) Placket box make
89 Over lock machine (OL) cuff servicing
90 4 Thread over lock machine (4TOL) cuff join
91 4 Thread over lock machine (4TOL) sleeve join

54
92 3 Needle flat lock machine 3TFL Arm hole top stitch
93 Single needle lock stitch machine (SNLS) Cuff opening tack
94 4 Thread over lock machine (4TOL) Side seam
95 Single needle lock stitch machine (SNLS) Cuff top tack
96 3TFL Bottom hem

97 Button holing machine BH Button hole

98 Button attaching machine BA Button attach with mark

99 SNLS Label make and bottom security tack

 Singlet
100 FLAT LOCK/Tape binding Neck line piping front
101 FLAT LOCK/Tape binding Neck line piping back
102 FLAT LOCK/Tape binding Piping arm hole right
103 FLAT LOCK/Tape binding Piping arm hole left
104 Over lock seam covering/2Needle- 4THOL Shoulder join
105 Cover stitch/Bottom hemming/Blind hemming Bottom hem
106 Heat press label fixing m/c Label fixing
 Trouser
107 SNLS with edge cutter
To attach garment parts
108 SNLS with UBT

109 3 T Over lock To over lock bones, fly piece, facing

110 Kansai Belt Loop Making

111 Automatic welt pocket m/c Back pocket welts making

112 Buttonhole - Eyelet Button hole on back pocket

113 Button Sewer - Lockstitch Attach button to back pocket

114 Bar tack Reinforcement

115 Hook and eye Hook tacking (hook and eye)

116 Blind stitch For trouser bottom hemming

55
  Work wear

sew dart & back split tuck, Tuck flap & chest pocket, Attach
size label on back, Attach chest & flap pocket, Attach front
facing, Attach & edge stitch front facing, Side pocket facing
single needle attach & Run stitch side pocket bag, Turn & top s/t side pocket
117 lockstitch(SNLS) bag, Attach back pocket, attach zipper to left body, close & J-
s/t left front body, attach zipper to right body ,attach zipper to
right body ,close collar, collar top s/t, bottom hem, etc.

Double needle
118 Hem chest & flap, Hem back placket, Side placket attach
lockstitch(DNLS)

119 Three tread over lock(3TH) Over lock front rise

Side seam, Shoulder attach, Sleeve attach, Sew Back rise &
120 Five thread over lock (5TH) attach crouch, Sew side seam of front & back trouser, sew
inseam

121 Kansia special Top s/t waist band

122 Bar tacking bar tuck at different places

123 Snap button Make Hole in Front Facing, Attach Right snap button

Button holler and button

124 Button hole making and button attaching
attach

Single needle
125 Hem chest & flap, Hem back pocket, Side pocket attach
lockstitch(SNLS)

 Skirt

126 1 needle over lock Serge Front, Back, Bottom, and vents

Sew darts, pocket preparation, Pocket attach, zipper attach,

Under fly and front fly top stitch, sew side seam & center
127 Single needle lock stitch back, sew vents, hem bottom, sew lining, waist band
machine (SNLS) preparation, attach belt loops, attach labels, etc

Double Needle Lock stitch

128 machine (DNLS)

129 Bar tack machine To reinforce pocket edges and front fly

56
130 Flat lock/ Interlock machine Belt loop preparation

Single Needle chain stitch

131 Blind stitching bottom
blind stitching machine

132 Button holing machine Button hole making

133 Button attaching machine Sewing buttons

134 Hook and eye setting machine Setting hook and eye

 Coat

135 SNLS (Single needle lock stitch) Collar decorative stitch with supporter

136 SNLS (Single needle lock stitch) Collar making

137 SNLS (Single needle lock stitch) Finish Side lock of collar

138 SNLS (Single needle lock stitch) Dart making

139 SNLS (Single needle lock stitch) Attach Side part

140 SNLS (Single needle lock stitch) Make Flap and turn

141 3 TOL (3 Thread over lock machine) Over lock Facings and bone

142 SNLS (Single needle lock stitch) Cut Pocket Making

143 SNLS (Single needle lock stitch) Attach facing to pocket bag

144 SNLS (Single needle lock stitch) Finish Pocket Bag

145 SNLS (Single needle lock stitch) pocket welt making

146 SNLS (Single needle lock stitch) Finish Brest Pocket Bag

147 SNLS (Single needle lock stitch) Decorative stitch on front

148 SNLS (Single needle lock stitch) Decorative stitch on Inner front panel

149 SNLS (Single needle lock stitch) Inner pocket welt making

150 SNLS (Single needle lock stitch) Finish Inner Pocket Bag

151 3 TOL (3 Thread over lock machine) Over lock Back parts

57
152 SNLS (Single needle lock stitch) Sew Back part

153 3 TOL (3 Thread over lock machine) Over lock sleeve parts

154 SNLS (Single needle lock stitch) Sleeve Making

155 SNLS (Single needle lock stitch) Shoulder attach

156 SNLS (Single needle lock stitch) Side Vent Making

SNLS (Single needle lock stitch) Side Seam

157

158 SNLS (Single needle lock stitch) Collar attach

159 SNLS (Single needle lock stitch) Finish collar

160 SNLS (Single needle lock stitch) Sleeve attach

161 SNLS (Single needle lock stitch) Sleeve finish with covering

162 BH (Button hole machine) button holing

163 BA (Button attaching machine) Button sewing

 Over coat

164 SNLS (Single needle lock stitch) Collar run stitch

165 SNLS (Single needle lock stitch) Top stitch Collar

166 SNLS (Single needle lock stitch) Making belt and turn

167 SNLS (Single needle lock stitch) Top stitch belt

168 SNLS (Single needle lock stitch) Sleeve hemming

169 SNLS (Single needle lock stitch) Over lock Laple

170 SNLS (Single needle lock stitch) Laple attaching

171 SNLS (Single needle lock stitch) Top stitch front Laple

172 SNLS (Single needle lock stitch) Pocket hem (3 Pockets)

173 SNLS (Single needle lock stitch) Pocket attach ( Small- Brest )

174 SNLS (Single needle lock stitch) Pocket attach ( 2 Belly)

175 SNLS (Single needle lock stitch) Over lock Back parts
58
176 SNLS (Single needle lock stitch) Sew Back part

177 SNLS (Single needle lock stitch) Top stitch Back Part

178 SNLS (Single needle lock stitch) Shoulder attach

179 SNLS (Single needle lock stitch) Shoulder Top stitch

180 SNLS (Single needle lock stitch) Collar attach

181 SNLS (Single needle lock stitch) Finish collar

182 FOA (Feed of the arm) Sleeve attach

FOA (Feed of the arm) Tack waist belt

183

184 5 TOL (5 Thread over lock machine) Side seam

185 3 TOL (3 Thread over lock machine) Bottom hem

BH (Button hole machine) button hole front 4

186

187 BA (Button attaching machine) Button Attach 4

V. Finishing Machines/equipment
Washing section
 Garments Washing machine
188 For industrial apparels washing and drying
 Garments drying machine
 Waste wash water treatment
189 Steam Iron
Ironing
190 Ironing table

191 Wrinkle Free Pressing Machine To have better finish and enhance aesthetic value

192 Stain removing machine Spot washing to remove stains

193 Hanger To hang the garment

194 Tag pin gun To attach different tags

59
195 Needle/metal detector machine For detecting Brocken needles on finished garments

VI. Packing Section

196 Folding & poly bag table Packaging the poly bag

197 Cartoon linking tool To make packaging cartoon link using adhesive tapes.

B. Machinery and equipment list for socks processing

198 Single cylinder double welt socks knitting machine For Knitting the yarn

199 Double cylinder sock knitting machine For Knitting the yarn

200 Cone winder For winding the yarn

201 Linking machine For sewing the one side edge

**Equipments listed for washing, drying, and packaging is also used in this part.

C. Auxiliary & Ancillary Machineries

202 Fork lift Transporting items & move packed products

203 Sewing tools bin To keep sewing accessories near the operator.

204 Scissors Multiple usage

205 Boiler Steam generation for washing section

206 Air compressor For supplying compressed air

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4.4. Building and Construction

Land Requirement

The total land requirement for a Garment factory depends on the space required by factory
building, administration building, storage facilities, cafeteria, loading unloading area,
infrastructural utilities, ease of flexible access and circulation of heavy trucks and open space for
future expansion. All the above mentioned buildings may be included in one large pre-engineered
steel building or can be separated in to different buildings.

i. Civil Structures

Factory Building

Depending upon the production capacity of the project, the factory building area may also be
considered. Thus its floor area, building height and structural requirements vary accordingly with
its production capacity and technology to be installed. But its design should necessarily fulfil the
following minimum requirements.

 Sub-Structural reinforced concrete foundation with the necessary water proofing mechanisms

 Reinforced Concrete foundation which can sustain the vibratory forces from the respective
machineries

 Concrete Super-structural frame work and steel truss for EGA roof covering

 Smooth finished concrete flooring

Storage Facilities

The most common one and also the cheapest is a flat ware house with the following minimum
requirements.

 Sub-Structural reinforced concrete foundation with the necessary water proofing mechanisms

 Concrete Super-structural frame work and steel truss for EGA roof covering

 Smooth finished concrete flooring

61
Storage facilities include;

 Raw material store

 Finished Product Store

 Packaging material store

 Tools shed which is usually a component of the workshop unit

ii. Workshops and Utilities Sheds

The type and size of the workshops will be determined by the type and technology used. Buildings
under this category include:-
 Power House and Generator House - Minimum requirements for these buildings shall be
masonry foundation capable to bear the super-structural load, both sides pointed HCB wall or
hydra foam walling, CIS roofing over eucalyptus truss, door and window with metal frame and
cement screed flooring.

 Electro-Mechanical and Automobile workshop - This shade can be C.I.S roofing on

eucalyptus truss supported by wooden or hollow steel section posts. Screed finish flooring is
sufficient for flooring purpose. The height of this shed is determined by the type of machinery
to be accommodated; but it shall be at least 5.00 meters high. The garage does not necessarily
require walling; but if required it can be CIS walling on eucalyptus laterals and the front side
shall be open.

iii. Office Accommodations

The overall floor space required will depend on the projects man power requirement and on the
administrative tasks that are to be undertaken on the site.

The building shall at least fulfil the minimum requirements of masonry foundation with smooth
finished concrete flooring, reinforced concrete super-structural frame work, both sides plastered
and painted HCB walling, CIS roofing on eucalyptus truss with hardboard ceiling, LTZ framed
doors and windows with 4mm glazing with the necessary sanitary and electrical installation.

62
 iv. Auxiliary Buildings
Minimum requirements for the under listed buildings: masonry foundation capable to bear the
super-structural load, both sides pointed HCB wall or hydra foam walling, CIS roofing over
eucalyptus truss, door and window with metal frame and cement screed flooring.
 Show room
 Cafeteria/canteen
 Guard House & Watch Towers
 Dry Latrines

Auxiliary Structures
 Water tank

v. General Site Works

 The access road to the project location shall be well graded and sufficiently compacted to the
desired thickness with appropriate selected material so that heavy trucks passage will not damage
it easily.
 Road size and main gates size should be designed with careful consideration of road safety and
vehicles approach.
 Parking for staff vehicles and delivery trucks are also necessary.
 Pedestrian walkways near office and accommodation areas shall be constructed at least with semi
dressed stone with selected material bedding and cement mortar pointing.
 Site sanitary and site electrical works shall be provided following the standard working drawings.
 A two chambered Septic tank with sufficient volume capacity and soak away pit is also necessary.
 Fencing can be of barbed wire with angle iron/ R.C.C. / Stone/ Wooden poles or chain link or
boundary wall. The prevailing cost of this fence/wall may be considered.

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5. MARKET STUDY

5.1. Market Segmentation

Market for articles of apparel could be segmented in light of their market destination as export and
domestic market; type of products demanded by potential end-users as knit or crochet and not knit or
crochet like woven products; users segment like children’s, ladies’ and men’s etc.

However, this market study focuses on export (international market) as well as domestic market of articles
of apparel as a whole. Hence, in the coming sections picture of both global and international markets will
be discussed independently to give an insight.

5.2. World Production

World articles of apparel production data were not available. Hence, it was not possible to incorporate it in
the study.

5.3. World Trade

The global apparel and fashion trade is expected to grow to USD 1 trillion by 2020. Though, with growth
slowing down in developed markets, the dynamics of global fashion market are expected to change
dramatically. Emerging economies will fuel most of growth in the fashion market. Brazil, Russia, India &
China (BRIC) along with few other South-East Asian countries are observed to be major growth drivers.

World trade comprises of world export and import of articles of apparel and it is discussed via classifying
articles of apparel, accessories in to two as: articles of apparel, accessories knit or crochet and not knit or
crochet.

5.4. Articles of Apparel, Accessories (Knit or Crochet):

A. Export

The world export of articles of apparel, accessories (knit or crochets) has registered an average annual
increase of 1.60 % for the period between 2012 and 2016 in five years time horizon. The global export in
terms of monetary value in general had grown from 213,618,717 thousand USD by 2012 to 227,595,236
thousand USD by 2016. However, export value recorded a down ward trend merely in 2015 by 7% and
paternally increased in 2016 by 2.2%.

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 Table 5. 1: World articles of apparel, accessories, (knit or crochet) export trend in

'000' USD and average annual export growth

Year World export Value in USD Annual change Growth rate
(%) (%)
2012 213,618,717 -
2013 234,861,092 0.10
2014 239,292,426 0.02
2015 222,608,707 (0.07)
2016 227,595,236 0.02
Geo. average annual growth 1.60%
Source: ITC Trade Map

HS code: 61...

As shown on table 5.2 below, China accounts for 39.5% of the aggregate value of world export of articles
of apparel and accessories (knit or crochet); world top fifteen exporters together contributes for 80.5% of
the total world export in 2016, while the remaining exporters accounted for 19.5% in the same year.

Table 5. 2: World top fifteen article of apparel and accessories (knit or crochet)

exporting countries, their export value in thousand USD and share of world export
by 2016
Share from total world 2016 export
Exporters Exported value in 2016 ‘000’ USD
value (%)
China 89,918,048 39.5%
Bangladesh 13,801,699 6.1%
Viet Nam 8,462,068 3.7%
Hong Kong, China 7,769,869 3.4%
Turkey 8,855,609 3.9%
Germany 8,014,994 3.5%
India 7,910,490 3.5%
Italy 7,837,849 3.4%
Cambodia 4,741,816 2.1%
Belgium 5,006,780 2.2%
Spain 4,964,234 2.2%
France 4,320,868 1.9%
Netherlands 4,716,671 2.1%
United Kingdom 3,383,336 1.5%
Indonesia 3,413,614 1.5%
Subtotal 183,117,944 80.5%
Others 44,477,292 19.5%
World total export value 227,595,236 100%

65
Source: ITC Trade Map

B. Import

The world import of articles of apparel and accessories (knit or crochet) reached at 192,896,050 thousand
USD in 2016 from 183,507,457 thousand USD in 2012; average over all annual import value has grown
by 1.26% for the period between year 2012 and 2016. Import in value in lump sum has depicted an
increase from 2012 to 2014 by 5.45%, and then consecutively decreased till year 2016 by 5.7 % and the
overall import of the world has increased by 1.26%.

Table 5. 3: World import of articles of apparel and accessories, knit or crochet in '000' USD
Annual change
Year World export value Growth rate (%)
(%)
2012 183,507,457 -
2013 194,052,520 0.057
2014 204,201,401 0.052
2015 198,560,821 (0.028)
2016 192,896,050 (0.029)
Geo. average annual growth rate 1.26%
Source: ITC Trade Map

HS code: 61….

As shown on table 5.4 below, USA accounted for 23.6% of the global import of articles of apparel and
accessories (knit or crochet); while the world top fifteen importers have contributed about 76.3% of the
total world import in 2016 and the remaining importers accounted for 23.7% of the total world import in
same year.
Table 5. 4: World top fifteen articles of apparel and accessories (knit or crochet)

importers in 2016
Imported value in 2016 Share from total world import value
Importers
(‘000’ USD) (%)
United States of America 45,447,987 23.6%
Germany 17,080,327 8.9%
United Kingdom 10,918,416 5.7%
Japan 12,974,247 6.7%
France 10,274,382 5.3%

66
Italy 7,532,155 3.9%
Hong Kong, China 6,426,760 3.3%
Spain 7,617,420 3.9%
United Arab Emirates 3,678,676 1.9%
Netherlands 7,688,355 4.0%
Imported value in 2016 Share from total world import value
Importers
(‘000’ USD) (%)
Canada 4,546,308 2.4%
Belgium 4,187,585 2.2%
Australia 2,957,356 1.5%
Korea, Republic of 2,895,800 1.5%
Austria 2,963,814 1.5%
Subtotal 147,189,588 76.3%
Others 45,706,462 23.7%
World total Import value 192,896,050 100%
Source: ITC Trade

5.5. Articles of apparel and aaccessories (not knit or crochet)

A. Export

World export of articles of apparel and accessories (not knitted or crocheted) indicates an average annual
growth rate of 2.56% for period between year 2012 and 2016 and the annual change in export value has
showed fluctuating pattern. The export value had grown from 194,561,974 thousand USD in 2012 to
215,244,338 thousand USD in 2016.

Table 5. 5: World articles of apparel and accessories (not knit or crochet) export trend in
thousand USD
Annual change Growth rate
Year World export value in USD
(%) (%)
2012 194,561,974 -
2013 211,640,969 0.088
2014 233,418,038 0.103
2015 221,356,370 (0.052)
2016 215,244,338 (0.028)
Geo. average annual growth rate 2.56%
Source: ITC Trade Map

HS code: 62…

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China, Bangladesh, Italy, Vietnam, Germany and India were the top five large exporters of articles of
apparel and accessories not knit or crochet, each accounted for 33.6%, 6.3%, 5.6%, 4.4% and 4.2% of the
total world export value in 2016 respectively.

Table 5. 6: World top fifteen exporters of articles of apparel and accessories (not knit

or crochet)
Exported value in 2016 Share from total world export
Exporters
‘000’ USD value (%)
China 72,357,240 33.6%
Bangladesh 13,603,293 6.3%
Italy 12,122,061 5.6%
Viet Nam 9,527,348 4.4%
India 9,048,126 4.2%
Germany 8,685,006 4.0%
Hong Kong, China 7,145,874 3.3%
Spain 7,617,110 3.5%
Turkey 5,928,894 2.8%
France 5,686,576 2.6%
United Kingdom 4,428,677 2.1%
Indonesia 3,889,211 1.8%
Netherlands 4,397,075 2.0%
Belgium 3,307,416 1.5%
Mexico 2,362,415 1.1%
Subtotal 2,324,221 79.0%
Others 212,920,117 21.0%
World total export value 215,244,338 100%
Source: ITC Trade Map
HS code: 62…
B. Import
World import trend of articles of apparel and accessories (not knit or crochet) depicts an average annual
growth rate of 1.14%. The annual change in import value has exhibited fluctuating trend during the period
under consideration, i.e., between 2012 and 2016, as depicted on table 5.7 below.
Table 5. 7: World import trend of articles of apparel and accessories (not knit or crochet) in ‘000’
USD
Annual change Growth rate
Year World export value in USD
(%) (%)
2012 191,247,236 -

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 2013 199,038,485 0.041
2014 207,224,172 0.041
2015 202,921,711 (0.021)
2016 200,107,901 (0.014)
Geo. average annual growth rate 1.14%
Source: ITC Trade Map HS code: 62…

United States of America, Germany, Japan, France and United Kingdom were the world five large
importers of articles of apparel and accessories (not knit or crochet) accounts for 19.3%, 8.6%, 6.7%,
5.6% and 5.5 of the world total import in 2016 respectively.

Table 5. 8: World top fifteen articles of apparel and accessories (not knit or crochet)

importing countries, their import value in thousand USD and share of world import
in 2016
Imported value in Share from total world 2016 import
Importers
2016 ‘000’ USD value (%)
United States of America 38,583,085 19.3%
Germany 17,119,584 8.6%
Japan 13,368,292 6.7%
France 11,235,769 5.6%
United Kingdom 10,937,031 5.5%
Spain 9,391,771 4.7%
Italy 7,087,740 3.5%
Hong Kong, China 6,070,546 3.0%
Korea, Republic of 5,272,564 2.6%
United Arab Emirates 3,320,084 1.7%
Imported value Share from total world import value
Importers
(‘000’ USD) (%)
Netherlands 7,431,879 3.7%
Canada 4,225,993 2.1%
China 3,261,952 1.6%
Belgium 3,585,288 1.8%
Australia 2,959,208 1.5%
Subtotal 143,850,785 71.9%
Others 56,257,116 28.1%
World total Import value 200,107,901 100%
Source: ITC Trade Map

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HS code: 62…

5.6. Global Apparel Consumption

Global Per capita apparel consumption in major markets expected to grow at 4% between 2015 and 2025;
China, India and Brazil are expected to grow at twice the global rate.

Table 5. 9: Per capita apparel consumption in major markets (USD per capita)

Countries Consumption in 2015 Consumption in 2025

US 978 1116
Japan 736 855
European Union 693 766
Canada 683 768
Russia 282 390
Brazil 270 404
China 172 435
India 45 123
Per capita apparel consumption in major markets – Atlas(www.theatlas.com/charts/ByO0Hd_1W)

5.7. Domestic Market for Articles of Apparel

Under this sub heading the team has discussed Ethiopia’s articles of apparel demand (both domestic and
export demand), potential export market, supply (both from domestic production and import), and demand
supply gap.

5.7.1. Demand Side

Demand for articles of apparel emanates from both domestic consumption and export trade. This market
study also includes the domestic as well as export demand for articles of apparel.

The demand for articles of apparel highly depends on following factors: quality, price, fashion of
products, income of the consumers and share of expenditure spent on articles of apparel; besides, other

70
factors such as design, season, timely delivery, image and etc also affect the demand for articles of
apparel.

A. Domestic Demand

Ethiopia has a large, youthful population and is potentially one of the largest markets in Africa, although
the purchasing power of the population is still limited. Given the large size of Ethiopian market and the
current size of import, there is clearly a tremendous scope and potential for the domestic sale of garment
products, if offered at competitive price and high quality.

In projecting the domestic demand, the case team employed an apparent consumption approach, i.e.,
domestic production plus import minus export in a nut shell. Domestic production of articles of apparel
was varied between year 2011 and 2016.
Table 5. 10: Domestic production trend of articles of apparel in Ethiopia

Year 2011 2012 2013 2014 2015 2016*

Domestic Production (Dozen) ** 336,826 680,632 532,486 883,014 2,046,528 2,377,149
Average weight of a dozen (‘ kg)
*** 6.9 6.9 6.9 6.9 6.9 6.9
Domestic Production(Kg) *** 2,324,099 4,696,361 3,674,153 6,092,797 14,121,044 16,402,328
Source:

* Estimated using last five years growth rate

** CSA, Medium and Large Scale Manufacturing and Electricity Industry Report, 2011-2015 and

*** Team computation

Table 5. 11: Article of apparel per capita consumption trend and average annual

growth rate

Year 2011 2012 2013 2014 2015 2016

Article of apparel 2,324,099 4,696,361 3,674,153 6,092,797 14,121,044 16,402,328

Production(‘Kg)
Import (‘Kg) 21,421,142 28,362,466 30,373,929 39,170,907 44,979,992 54,345,775
Export (‘Kg) 2,749,263 3,105,772 3,037,039 3,709,123 5,471,144 6,498,208
Apparent consumption (‘Kg) 20,995,978 29,953,055 31,011,043 41,554,581 53,629,892 64,249,895
Population 84,079,307 86,324,224 88,568,654 90,871,439 93,234,097 95,658,183
Per capita consumption 0.250 0.347 0.350 0.457 0.575 0.672
(Kg/person/year)

71
 Growth rate (Simple average) 22.6 %

Source: Ethiopian Revenue and Custom Authority, CSA, Medium and Large Scale Manufacturing and
Electricity Industry Report, 2011-2015 and Team Computation

The domestic demand was projected using population and per capita consumption projection; by taking
year 2007 population, i.e., 73,750,932 as base and annual population growth rate of 2.67% in to account.

The per capita consumption was also projected by taking year 2016 per capita consumption of 0.672 kg/
person as a base and annual average per capita consumption growth rate of 22.6% (see table 5.11 above).

Table 5. 12: Domestic demand projection of articles of apparel in Ethiopia

Per capita
Total Domestic demand
Year Population consumption
(‘Kg)
(‘Kg/person/year)
2017 98,212,257 0.824 80,926,900
2018 100,834,524 1.010 101,842,869
2019 103,526,806 1.238 128,166,186
2020 106,290,972 1.518 161,349,695
2021 109,128,940 1.861 203,088,957
2022 112,042,683 2.282 255,681,403
2023 115,034,223 2.798 321,865,756
B. Export Demand

B.1. Ethiopia’s Articles of Apparel Export

Ethiopia export articles of apparel to different markets like EU, AGOA and other markets. The export
volume past trend has showed an average annual growth rate of 18.77% for the period between 2011 and
2016. Average annual export growth rate (18.77%) indicates that the export demand in the international
market for Ethiopia’s apparel products will rise as past performance traced. Export volume has grown
from 2,749,263 kg in 2011 to 6,498,208 kg in 2016.

Table 5. 13: Articles of apparel export trend of Ethiopia (both knitted and not knitted)
Year

Export Annual change (%) Growth rate (%)

volume

72
 (‘kg)
2011 2,749,263
2012 3,105,772 0.130
2013 3,037,039 -0.022
2014 3,709,123 0.221
2015 5,471,144 0.475
2016 6,498,208 0.188 18.77%
Source: Ethiopian Revenue and Customs Authority (ERCA)

B.2. Export Demand Projection

Even though the performance of export of a product depends on such factors as quality of product,
marketing effort and experience of exporters and others; the export demand for article of apparel of
Ethiopia was projected based on past export trend by taking export volume of 6,498,208 kg in year 2016
as a base and an average growth rate of 18.77% as shown on below table (5.14).

Table 5. 14: Export projection of articles of apparel

Year Projected Export Demand Volume (‘Kg)
2017 7,717,921
2018 9,166,575
2019 10,887,141
2020 12,930,657
2021 15,357,742
2022 18,240,390
2023 21,664,111
Total demand for articles of apparels is the summation of both domestic and export demand projections as
shown on table 5.12 and 5.14.

Table 5. 15: Total demand for articles of apparels of Ethiopia

Export Demand Total Demand
Year Domestic Demand (‘Kg)
(‘Kg) (‘Kg)
2017 80,926,900 7,717,921 88,644,821
2018 101,842,869 9,166,575 111,009,444
2019 128,166,186 10,887,141 139,053,327
2020 161,349,695 12,930,657 174,280,352
2021 203,088,957 15,357,742 218,446,699
2022 255,681,403 18,240,390 273,921,793
2023 321,865,756 21,664,111 343,529,867

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C. Export by destination for articles of apparel from Ethiopia

C.1 Knitted or Crocheted

The largest share of Ethiopia’s articles of apparel (knitted or crocheted) export was targeted to Germany.
By year 2015, about 63.65% of the total export was exported to Germany followed by the United States,
United Kingdom, and Sudan accounted for 26.55%, 4.82% and 2.35% respectively.
Even though more than 50% of the country’s knitted or crocheted articles of apparel were exported in
2015 directed to Germany, export to regional markets such as AGOA, COMESA and EBA countries has
exhibited also growth.

Table 5. 16: Articles of apparel knitted (crocheted) export by destination in 2015

Destination Market Export Volume (‘Kg) Share (%)

Germany 2,364,624 63.65%
United States 986,296 26.55%
United Kingdom 179,030 4.82%
Sudan 87,398 2.35%
Italy 63,427 1.71%
Canada 8,994 0.24%
Israel 2,208 0.06%
France 2,719 0.07%
Korea, Republic 1,923 0.05%
Norway 427 0.01%
Sub total 3,697,046 99.52%
Others 17,995 0.48%
Total export 3,715,041 100%
Source: ERCA and ITC
C.2. Not Knitted or Crocheted

The top three large importing countries of Ethiopia’s articles of apparel (not knitted or crocheted) in 2015
were Germany, United States and France. Each country accounted for 76.96%, 15.85% and 2.43%
respectively.

74
 Table 5. 17: Articles of apparel not knitted (not crocheted) export by destination in

2015
Destination Market Export Volume (‘Kg) Share (%)
Germany 1,351,514 76.96%
United States 278,373 15.85%
France 42,730 2.43%
Norway 25,831 1.47%
Italy 20,655 1.18%
Korea, Republic 10,208 0.58%
United Kingdom 10,120 0.58%
Israel 3,869 0.22%
China 3,844 0.22%
Australia 1,778 0.10%
Sub total 1,748,922 99.59%
Others 7,181 0.41%
Total Export 1,756,103 100%
Source: ERCA and ITC

D. Potential Export Markets

Ethiopia has much strength to enable it to succeed in the apparel sub-sector. It is endowed with abundant
cheap labor, cheap electricity, and the required many other resources; these create the potential for growth
of a competitive garment industry.

In terms of opportunity, Ethiopia has had favorable trade agreements with the major regional market
initiatives, including AGOA, EBA, and preferential tariff rates under COMESA agreements. Moreover, in
terms of global structure of production, garment activity is starting to shift as the larger and more
advanced emerging markets are facing with an increasing of factor costs and are focusing on moving up
the value chain by creating room in this segment of the production chain. The threats that had created risk
for garment and textile sector and market access conditions was related with the end of AGOA in 2015,
but it has currently being solved and also becomes other indicator for the sector’s future prospect.

Table 5.18 provides data on the value of Ethiopia’s apparel and clothing accessories export (include both
knitted or crocheted and not knitted or crocheted) to U.S.A under AGOA. Ethiopia has been an AGOA
beneficiary country since year 2000 when the AGOA Act was enacted. A review of Ethiopia’s

75
performance under AGOA regional market initiative over the last thirteen years has showed a mixed
result.

On the one hand, AGOA exports have shown a steady growth in volume and product mix. As it is shown
on the table below, Ethiopia’s AGOA export has increased from a very low base of 215 thousand USD in
2001 to 18.2 million USD in 2012, with an average growth rate of 80 percent per annum.

In the case of textile and apparel, for instance, export has grown from $163 thousand in 2001 to $62
million in 2016, with an average growth rate of about 28.7% per annum. Yet, although AGOA took effect
in 2001, Ethiopia has underutilized the program, with less than 10% of Ethiopia’s textiles exported to the
U.S. As a result, the government has established a National AGOA Center under the Ministry of Trade to
assist domestic firms better utilize AGOA, and pointed out the textile and garment industry as a priority
sub-sector under the country’s Growth and Transformation Plan II.

The US now accounts for about 40% of Ethiopia's total textile and garment export, thanks to the AGOA
trading agreement set up in 2000, while the EU takes almost all of the remaining 60%.In general, export of
apparel and clothing accessories has witnessed an average growth rate of 34.29 % between these periods
(2002-2016).

Table 5. 18: Ethiopia’s textile and apparel export to US under AGOA (from 2002 to

2016)
Gross Apparel and Clothing Change
Year
Accessories Export (In million USD) (%)
2002 1
2003 2 1.00
2004 4 1.00
2005 4 0.00
2006 5 0.25
2007 5 0.00
2008 9 0.80
2009 7 -0.22
2010 7 0.00
2011 11 0.57
2012 18 0.64
2013 32 0.78
2014 36 0.13

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 2015 41 0.14
2016 62 0.51
Growth rate
(Geo-mean) 34.38%
Source: Agoa. Info AGOA (AGOA excl. GSP) exports to the United States, Feb 2017

The top product items of Ethiopia’s apparel and clothing accessories export (include both knitted or
crocheted and not Knitted or crocheted) to USA under AGOA were sweaters, pullovers and similar
articles; manmade fibers; men's or boys' trousers, breeches and shorts, and women's or girls' trousers,
breeches and shorts, blouses and shirt.

5.7.2. Supply Situation

Supply of articles of apparel in Ethiopia originates from two sources of both domestic production and
import.

A. Domestic Production

In Ethiopia there are more than fifty operational medium and large scale articles of apparel producing
factories, including those found in newly established “Hawassa Industry Park”. There are also small
scale/hand craft/ traditional cloths/article of apparel/ producers.

However, the study has considered merely the domestic production of articles of apparel by the medium
and large scale factories as production data of small scale firms were not available.

A.1 Production Capacity Utilization

As per the data obtained from the Ethiopian Textile Industry Development Institute, which is depicted on
table 5.19 and 5.20 below consecutively, on average the existing integrated garment factories are
operating at 67.73% of their installed production capacity while non-integrated factories are working at
43% of their installed capacity.

Table 5.19: Capacity utilization rate of integrated garment factories, 2008 E.C

Installed Attained Capacity

Sr.No. Company/Factory Name Type of product UoM Capacity/ capacity/Year Utilization
Year (%)

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 1. Almeda Textile P.L.C. Garment PCS 14,000,000 10,000,000 71.43%
2. Ayka Addis Textile & Knitted Garment PCS 25,000,000 18,750,000 75.00%
Investment Group
3. Kebire Enterprise(Maa Knitted and PCS 5,124,000 3,843,000 75.00%
Garment and Textile) Woven Garment
P.L.C.
4. Yirgalem Addis Textile Knitted Garment PCS 1,573,000 1,022,000 64.97%
Factory P.L.C.
5. Altex Textile and Garment PCS 5,000,000 3,000,000 60.00%
Garment Factory P.L.C.
6. Al-Mehdi Industries Knitted Garment PCS 240,000 144,000 60.00%
P.L.C.
Average Capacity Utilization Rate 67.73%
Source: Ethiopian Textile Industry Development Institute

Table 5. 20: Capacity utilization rate of garment factories, 2008E.C

Sr. Company/Factory Name Type Of Uo Installed Attained Capacity
No product M Capacity/Yea Capacity/Year Utilization
. r (%)
1. Addis Garment S.C.(Augusta) Woven garment Pcs 811,000 462,000 56.97%
2. Akaki Garment S.C. Woven Garment Pcs 2,114,000 719,000 34.01%
3. Ambassador Garment and Woven Garment Pcs 123,750 88,000 71.11%
Trading P.L.C.
4. Asbem Industries P.L.C. Knitted Garment Pcs 1,997,000 1,358,000 68.00%
5. BM Ethiopia Garment and Knitted Garment Pcs 1,152,000 864,000 75.00%
Textile S.C.
6. Concept International Ethiopia Knitted Garment Pcs 2,916,000 1,400,000 48.01%
P.L.C.
7. EMD Garment P.L.C. Male Suits Pcs 15,000 12,000 80.00%
8. Feleke Garment P.L.C. Knitted Garment Pcs 899,000 674,000 74.97%

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9. Haya Garment Manufacturing Knitted Garment Pcs 5,000 4,000 80.00%
P.L.C.
10. Garment Evolution P.L.C. Garment Pcs 1,607,692 147,840 9.20%
11. GG Super Garment P.L.C. Knitted Garment Pcs 1,498,000 599,000 39.99%
12. GMM Garment P.L.C. Knitted Garment Pcs 234,000 129,000 55.13%
13. Gullele Garment P.L.C. Woven Garment Pcs 1,404,000 351,000 25.00%
14. Haile Garment P.L.C.(HG) Garment Pcs 790,000 230,400 29.16%
15. Knit To Finish P.L.C.(Garment Knitted Garment Pcs 3,744,000 1,872,000 50.00%
Express)
16. Lucy Garment Industry P.L.C. Woven Garment Pcs 394,000 256,000 64.97%
17. Mantel Garment P.L.C. Garment Pcs 529,920 138,240 26.09%
18. Mitch Garment P.L.C. Garment Pcs 30,000 22,000 73.33%
19. Nazareth Garment S.C. Garment Pcs 1,434,240 430,908 30.04%
20. NovaStar Garment Factory Knitted Garment Pcs 1,997,000 1,498,000 75.01%
P.L.C.
21. Oasis Abissiniya P.L.C. Garment Pcs 1,560,000 1,248,000 80.00%
22. Soney Garment Textile and Woven Garment Pcs 2,000 1,000 50.00%
General Trading P.L.C.
23. Tehut Knitting and Garment Knitted Garment Pcs 960,000 480,000 50.00%
P.L.C.
24. Vitcon Garment P.L.C. Woven Garment Pcs 340,000 170,000 50.00%
25. Wossi Garment Design Factory Knitted Garment Pcs 152,000 114,000 75.00%
P.L.C.
26. Wow Garment P.L.C. Suits Pcs 43,800 14,600 33.33%
27. Yonis Garment P.L.C. Knitted Garment Pcs 3,120,000 2,184,000 70.00%
28. Village Industry P.L.C. Woven Pcs 750,000 563,000 75.07%
Garments(Bag)
29. Big M Apparel Manufacturing Woven Garment Pcs 528,000 143,000 27.08%
P.L.C.
30. Desta Garment(Bekimar) Knitted Garment Pcs 3,026,000 2,270,000 75.02%
Industries P.L.C.
31. Diplomatic Garment PLC Garment Pcs 9,000 3,500 38.89%
32. BerhanuTsehay Textile & Knitted & Pcs 864,000 691,600 80.05%
Garment Woven Garment
Average Capacity Utilization 55.33%
Rate (%)
Source: Ethiopian Textile Industry Development Institute
According to the team’s survey, existing non integrated garment factors were operating at lower capacity
due to various reasons such as shortage of domestically produced quality finished fabrics, shortage of
working capital, low labor productivity, market access problem due to low product quality as a

79
repercussion of low quality input and generally not being competitive both in domestic as well as export
market. On the other hand, the integrated garment factories are operating at an average of 67.73% of their
installed production capacity in the year 2008 E.C and relatively they are almost free from the above
bundle of problems confronted by the non integrated firms except labor productivity.
Production trend for period between 2010/11 and 2015/16 and annual average growth rate of articles of
apparel as a whole is depicted on table 5.21 below.
Table 5. 21: Garment and wearing apparel (except leather) production trend in

Ethiopia
Description UoM Production/Year Growth
2011/12 2012/13 2013/14 2014/15 2015/16* rate (%)
Garment and wearing Dozen 680,632 532,486 883,014 1,671,876 820,967
apparel (except leather)
Annual change of - -0.22 0.66 0.89 -0.51
production
Growth rate (Geometric mean) (%) 4.8%
Source: CSA & Ethiopian Textile Industry Development Institute
*Production volume of year 2015/16 was taken based on average amount of past five year’s actual
production

Table 5.22 depicted below shows determination of average weight of a dozen of articles of apparel in kg
by adding average weight in kg of a unit of sample garment products and dividing the sum to the number
of garments.

Table 5. 22: Average weight of a dozen of articles of apparel

Average weight of a Average weight of a dozen of

Description UoM dozen by product type articles of apparel (‘Kg)
Over all kg 13.00
Over Coat kg 8.00
Shirt kg 4.50
Suit kg 12.00
Sport wear (adult) kg 6.00
Sport wear(Youth) kg 3.96
Work Wear kg 4.16
Babies' wear kg 3.60
Total weight in kg of 8 dozen 55.22
Average weight of a dozen of articles of apparel in kg 6.90
Source: Addis Garment, Ambassador Garment and Novastar Garment

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The actual historical production data of garment and wearing apparel shown on table 5.21 was converted
in to kilogram based on multiplier calculated on table 5.22.

Table 5. 23: Domestic production trend of articles of apparel in Ethiopia

Year 2011/12 2012/13 2013/14 2014/15 2015/16

Production (Dozen) * 680,632 532,486 883,014 1,671,876 820,967

Average weight of a dozen ** 6.9 6.9 6.9 6.9 6.9

Production(Kg) ** 4,696,361 3,674,153 6,092,797 11,535,944 5,664,672
Source: *CSA & Ethiopian Textile Industry Development Institute
** Team computation

A.2 Domestic Production Projection

As illustrated on table 5.24 below, the domestic production projection over future five years was made by
considering 820,967 dozen of production in 2015/16 (5,664,672kg) as a base and an average annual
production growth rate of 4.80% (table 5. 23 above).

Table 5. 24: Domestic production projection of Ethiopia's articles of apparel

Year Production (‘Kg)

2017 5,927,513

2018 6,202,549

2019 6,490,348

2020 6,791,500

2021 7,106,625

2022 7,436,373

2023 7,781,421

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B. Import

Articles of apparel were imported to Ethiopia mainly from the following countries such as China,
Thailand, Turkey, Italy and United Kingdom.

B.1 Import Trend

As shown on the table 5.25 and table 5.26 below, import values of articles of apparel and parallels foreign
currency expenditure was a significant one even though it fluctuated.
Table 5. 25: Import trend of article of apparel (Knitted) to Ethiopia
Year Volume in (‘kg) Value in Birr Value in USD
2011 8,716,324 772,873,396 45,290,770
2012 12,804,538 1,443,817,708 80,815,517
2013 13,363,171 1,740,977,082 92,604,671
2014 17,165,706 1,937,141,864 96,166,617
2015 13,103,769 1,786,794,300 85,977,976
2016 12,344,949 1,837,601,223 83,743,539
Source: Ethiopian Revenue and Customs Authority (ERCA)

On the other hand, import trend of articles of apparel not knitted between year 2011 and 2016 was
tabulated on table below.

Table 5. 26: Import trend of articles of apparel not knitted

Year Volume (‘Kg) Value in Birr Value in USD

2011 12,704,818 1,228,158,097 71,970,682
2012 15,557,928 2,010,343,969 112,525,970
2013 17,010,758 2,297,716,854 122,218,332
2014 84,115,668 2,969,493,564 147,416,230
2015 31,876,223 3,440,450,649 165,549,545
2016 28,313,547 3,995,422,960 182,080,233
Source: Ethiopian Revenue and Customs Authority (ERCA)

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Table 5.27 below shows that the import in terms of volume and exhibited a declining pattern in two
consecutive years (2015 and 2016). Annually on average import volume has grown by 13.67% over the
past six years.
Table 5. 27: Ethiopia's import trend of articles of apparel both knitted and not

knitted
Import volume (‘Kg) Annual change in Growth rate
Year Knitted Not Knitted Total import volume (%) (%)
2011 8,716,324 12,704,818 21,421,142 -
2012 12,804,538 15,557,928 28,362,466 0.3240
2013 13,363,171 17,010,758 30,373,929 0.0709
2014 17,165,706 84,115,668 101,281,374 2.3345
2015 13,103,769 31,876,223 44,979,992 -0.5559
2016 12,344,949 28,313,547 40,658,496 -0.0961
Average 12,916,409 31,596,490 44,512,900
Geometric average annual growth rate (%) 13.67%
B.2 Import Projection

Even though the import volume of articles of apparel has grown by 13.67% annually, it continuously
decreased from in the two recent years.

Table 5. 28: Import projection of articles of apparel to Ethiopia

Year Import projection in volume (‘Kg)
2017 46,218,202
2018 52,536,231
2019 59,717,933
2020 67,881,375
2021 77,160,759
2022 87,708,634
2023 99,698,405
C. Supply Projection from New Entrants
According to Ethiopian Textile Industry Development Institute, there are seventeen newly entrant
garment projects as shown on table 5.29 below with their respective installed production capacities
and year of commencement. Installed production capacity in PCS/year is calculated by multiplying
daily production capacity with 270 average working days per annum for firms in this industry and
considering one operating shift.

83
 It is also assumed that the new projects will start operation at 55.33% of their installed production
capacity, that is current average non integrated garment factories capacity utilization rate and the
production will be expected to grow by 4.8 % per annum (the sub-sector’s average annual production
growth percentage).

In addition to this, the team considered the following assumptions based on its finding.

 A dozen of articles of apparel contain 12 pcs of garment and a dozen of garment on average weighs
6.90 kg.

According to “Textile Industry Development Institute”, there are new projects of garment which are at
pre-implementation stage and their capacity is excluded from supply projection.

Table 5. 29: New entrant Garment Projects, their installed capacity and date of

commencement
Year of
Production Production
Sr. No. Company name Address Project
capacity/day capacity/annum
Completion
Bole Lemi Industry
1. Ever top Sports Wear P.L.C 2017 7,000 pcs of Garments 1,890,000 pcs
Zone
BHANDARI HOSIERY
2. Debere Berehane 2017 10,000 pcs of Garments 2,700,000 pcs
EXPORTS LTD
2018
3. Experience clothing Addis Ababa 3,125 pcs of Garments 843,750 pcs
2018
4. Itaca textile Mekele 7,000 pcs of Garments 1,890,000 pcs
2018
5. Demka Sebata 25,000 pcs of Garments 6,750,000 pcs
2018
6. DBL Mekele 116,000 pcs garments 31,320,000 pcs
HIRDARAMANI
7. Hawasa Industry Park 2017 28,760 pcs of Garments 7,765,200 pcs
GARMENT PLC
8. EPIC Apparel PLC Hawasa Industry Park 2017 3,700 pcs of Garments 999,000 pcs
9. TAL APPAREL Hawasa Industry Park 2017 2, 603 pcs of Garment 702,810 pcs
RIMOND (Siliver Spark 4,000 pcs of suits
10. Hawasa Industry Park 2017 1,080,000 pcs
Apparel) Garments
CENTURY GARMENT
11. Hawasa Industry Park 2017 1,562 pcs of Garment 421,740 pcs
PLC(PTU) (BUSANA)
12. ISABELLA Hawasa Industry Park 2017 55,000 pairs of socks 14,850,000 pcs
PVH FAR EAST
13. LMTD(ETHIOPIAN Hawasa Industry Park 2017 1,562 pcs of Garment 421,740 pcs
BRANCH)
14. ARVIND Hawasa Industry Park 2017 2, 603 pcs of Garment 702,810 pcs

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 38,000 pcs of knitted &
15. Indochine Apparel Plc Hawasa Industry Park 2017 10,260,000 pcs
woven Garments
16. Hela Clothing Hawasa Industry Park 2017 7,000 pcs of Garments 1,890,000 pcs
17. ONTEX BVBA GENTHEFS Hawasa Industry Park 2017 13,000 pcs of Garment 3,510,000 pcs

Source: Ethiopian Textile Industry Development Institute

Table 5. 30: Domestic production projection of articles of apparel by new entrants in

Ethiopia
Year
UoM 2017 2018 2019 2020 2021 2022

Pcs 26,112,053 49,942,146 52,339,369 54,851,659 57,484,539 60,243,797

Dozen 2,176,004 4,161,846 4,361,614 4,570,972 4,790,378 5,020,316

Kg 15,014,430 28,716,734 30,095,137 31,539,704 33,053,610 34,640,183

D. Total Supply Projection

It is the sum of domestic production projection by existing, new entrant firms and import. This total
supply does not include articles of apparel ‘salvage’ imported and supplied through illegal channel as data
for such trade was not available. Table 5.3 beneath summarizes the total supply projection of articles of
apparel in Ethiopia over the coming five years.

Table 5. 31: Total supply projection of articles of apparel in Ethiopia (‘Kg)

New entrant Total Supply
Year Existing Firms Import Firms Projection
46,218,202 67,160,145
85
 2017 5,927,513 15,014,430

2018 6,202,549 52,536,231 28,716,734 87,455,514

2019 6,490,348 59,717,933 30,095,137 96,303,418

2020 6,791,500 67,881,375 31,539,704 106,212,579

2021 7,106,625 77,160,759 33,053,610 117,320,994

2022 7,436,373 87,708,634 34,640,183 129,785,190

2023 7,781,421 99,698,405 36,302,912 143,782,738

5.8. Demand Supply Gap

The demand supply gap shows a positive gap, that is, the demand is in excess of supply throughout the
projection years. The gap anticipated to grow from 21,484,676 kg in year 2017 to 199,747,129 kg in 2023
that invites to entertain new entrant firms to engage in this sub-sector.
Table 5. 32: Demand-Supply gap (‘Kg)
Year Demand Supply Demand-Supply Gap
2017 88,644,821 67,160,145 21,484,676
2018 111,009,444 87,455,514 23,553,930
2019 139,053,327 96,303,418 42,749,909
2020 174,280,352 106,212,579 68,067,773
2021 218,446,699 117,320,994 101,125,705
2022 273,921,793 129,785,190 144,136,603
2023 343,529,867 143,782,738 199,747,129
5.9. Marketing Channels and Arrangements

Both knitted and not knitted articles of apparel produced in different parts of the country are marketed
mainly in two channels that is export and domestic market channel.

I. Export Market Channel and Arrangement

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Articles of apparel produced and meant for export market are mostly exported via Djibouti port though
some times as a need arise the products are exported via Ethiopia Airlines. The industry is currently
growing rapidly. Exports have been increased substantially over the past ten years. The Ethiopian
government has set the sub-sector as a focus area for the Growth and Transformation Plan II (2015-2020),
targeting to boost exports to reach at one billion USD by the end of the plan period and to create close to
350,000 jobs.

Export products are made and sold for customers based on their pre-orders and agreements with sellers or
sellers produce products which are demanded by foreign customers and sell them by using different
marketing strategy. Sells can be made directly to whole sellers, retailers or consumers; sells can also be
made via agents. The transportation cost is covered by seller except in the case where garment factories
are giving sewing services only in this case the transportation cost is covered by buyers. Sales transactions
are facilitated by using LC.

II. Domestic Market Channel and Marketing Arrangement

Articles of apparel have been also sold in domestic market; directly to end users, through whole sellers,
retailers or other parties on commission base.

Mostly, sells are made on cash basis, at factory gate or distribution shops of the seller; however sometimes
products are sold on credit basis for period of three to six months for group of buyers who can provide
letter which grant about the payment of the credit from their employer. Credit sells have a price increment
of 5% – 6% on cash base selling prices.

Figure 5. 1 Marketing Channel for Articles of Apparel

87
 Producers

Local Market Export Market

Agent Wholesaler Wholesaler

Retailer Retailer

Consumer

5.10. Price Trend

As shown on table 5.33, in general the average unit selling prices of articles of apparel in domestic market

exhibited a down pressing trend with slight margin of decline.

Table 5. 33: Average export selling price trend of garment products in USD

Garment
Year Average Unite Price (USD)
Net. Wt. (Kg) Value (USD)
2011 3,955 43,751 11.06
2012 4,162 41,697 10.02
2013 4,352 45,931 10.55
2014 4,997 54,151 10.84
2015 6,848 72,475 10.58
2016 6,938 61,131 8.81
Average 5,209 53,189 10.31
Source: Ethiopian Textile Industry Development Institute

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 5.10.1. Garment Marketing Problems

The major market challenges that apparel industries currently facing are linked to presence of limited
market linkages and competitiveness problem. Buyer wants to make sure that the product is produced
ethically and in accordance with laws and standards. To get order from buyer domestic factories shall get
social compliance certificate by fulfilling the requirement like child labor (age restriction, working hour
and safe working area for child), forced labor, health and safety, freedom of association and collective
bargaining, discrimination, disciplinary practice and working hours.

Most of local garment factories do not meet the requirement because of infant in age; willingness to
export, managerial and expert’s skills so that Ethiopian Garment Factories practice CMT. Hence, less
capacity to negotiate on price and do not get orders unless they accept what is offered by the buyers. In
addition to low prices, lack of awareness on the importance of buyers interest such as on delivery time,
quick response and quality orientation which in the country’s backgrounds are difficult to meet.

89
6. ORGANIZATIONAL STRUCTURE AND MANPOWER REQUIREMENT

VI.1. Organizational Structure

Textile and garment industry is one of the migratory business from which developed countries replaces
with other high tech manufacturing industry because of the requirement of huge amount of labor force
nowadays widely practiced in developing countries, while the sub sector is one of the labor intensive
business. Recruiting people with appropriate quality and quantity is advantageous for garment firms to
adopt with the fickle customer requirement and win the sharp competition of international garment
market. Higher performance, speed, skill, and competency development, talent management and human
asset refreshable are the building blocks of human resource management and source of success for
garment industry.

In addition, having a well-structured organizational management system is one of the success factors of
any organization. The hierarchy of decision making, superior subordinate coordinate and relationship,
communication process are all determined by the nature of organizational structure since it affects the
overall efficiency and performance level of the organization. Like that of many manufacturing
establishments garment subsector has also functional and production based organizational structure.

90
Representative organizational structure for garment subsector is presented below.

Figure 6. 1: Organizational structure

Source: Previous Garment Commodity study

91
 VI.2. The Role of Major Responsible Bodies in a Garment Factory

Major responsibilities of general manager: GM’s responsibility is to manage the entire factory
operations (single or multiple factories) and ensure that factory is running profitably.

 Heading the business and managing overall activities.

 Implementation and maintenance of quality systems and continuous improvement methodologies
with specific focus on growth, cost reduction and process improvements.
 Budgeting and goals/targets setting
 Process optimization to meet the production target.
 Resource allocation, manpower allocation and optimizing the cost
 Assessing and knowing the customer requirements in different markets and building business
strategy accordingly.
 Handling logistics activities including export/sourcing documentation.
 Any other job which may be assigned by the management from time to time.
Regarding general manager qualification and experience, whether the manager is owner itself or sourced
from external expertise, qualification and experience is mandatory because the current domestic as well as
international experience shows this fact.

Tasks of a Production Manager

 Production planning for the lines (manpower, machine and styles)

 Giving instruction to the line supervisors

 Line performance analysis (efficiency, man to machine ratio, cost/pieces), plan for continuous
improvement and Analysis of quality data

 Discussion with other team members (like merchants, fabric manager, cutting team and planning)

 Looking after job works (such as printing, embroidery, garment dying etc), taking decision on
selection vendors for job work and Planning for Overtime work

 Deciding rate for piece rate employees (sewing, thread cutting, pressing etc.)

92
Tasks of a Technical Manager

 Conducting R&D for styles

 Preparation of Operation Bulletin, line layout, workstation design

 Making line performance report, factory performance report and Hiring sewing operators

Tasks of a Quality Manager

 Ensure quality in all aspects

 Conduct internal audits prior to handing over goods to buyer representative for final inspection.

 Ensure quality trims are used in production and Implement quality systems in each department.

 Instruct packing department for correct tagging and packing requirement

 Meet with buyer representatives and understand about quality requirements of each buyer.

Marketing Manager

 Determines the demand for products and services offered by a firm and its competitors and identify
potential customers.
 Develop pricing strategies with the goal of maximizing the firm's profits or share of the market
while ensuring the firm's customers are satisfied.
 Oversee product development or monitor trends that indicate the need for new products and
services.
 Direct the hiring, training, and performance evaluations of marketing and sales staff and
oversee their daily activities.

Responsibilities of Finance Manager

 Formulating budget estimates in support of program objectives and presenting and justifying
budget requests

 Reviewing and interpreting accounting and financial management policy, procedures, standards
and statutes to ensure compliance

 Monitoring and examining accounts, specific appropriations or financial records for account status
and reporting requirements; and verifying accounts documentation.

93
  Planning and conducting performance and financial reviews of major programs and entities to
evaluate the reliability, effectiveness, and efficiency of the organization

 Making recommendations based on findings that identify cost savings through improved
operations and following up on recommendations to ensure implementation.

VI.3. Manpower Requirement

The number of employees required for garment varies from factory to factory. Based on recent data
collection results the following table summarizes the man power requirement, salary and experience of the
employees.

Table 6. 1: Manpower requirement of garment factories

Sr. Required Man Power Minimum Qualification Experience Salary
No. /Month (‘Br)

1 General Manager
office

General Manager BA degree in management and related field 4-5 years 9600
Executive Secretary Diploma in secretarial science and office Above 4 4500
management, years

2 Administration and
HR department
Administrative manager BA degree In management or any related field Above 5 8000
years

Personnel supervisor BA in management plus computer knowledge Above 3 5500

years

Medical service and BSC in public health /nursing plus computer 2/5 years 4,578
safety supervisor knowledge

Senior clinical nurse BSC/college diploma in public health/nursing 2/5years 3,867

Jr. clinical nurse College diploma in nursing plus basic computer 3years 2,747
application

General service BA in management plus computer 7 6800

supervisor
Messenger 8th grade complete & above 0 540
Cleaner 8th grade complete & above 0 540

94
 Driver Grade 10/12 plus 3rd grade driving license 3 years 1064
Security workers 8th grade complete and above 0 800
Registration and record 12/10grade complete 0/2 800
service provider
3 Marketing department

Marketing manager BA degree in marketing 4-5 years 8000

Senior secretary Diploma in secretarial science and office 4 years 3,634
management

Marketing research BA in marketing management, business 4 years 5500

officer management
Advertisement and BA in marketing management, business 4 years 5500
promotion officer management
Store keeper College/TVET diploma in stores and supplies 2 years 2250
management
4 Finance department

finance Manager BA in accounting or related 4-5 years 8000

Senior Accountant BA in accounting or related Above 2 5000
years

Junior Accountant BA in accounting or related One year 2700

experience

5 Production department

Production manager BSC in garment engineering Above 5 8000

years

Technical supervisors BSC in garment engineering 4 years and 7500

above

Cutting workers 10th grade complete and above 0 800

Design workers 10th grade complete and above 0 800
Sewing operators 10th grade complete and above 0 800
Machine operators 10th grade complete and above 0 800

Source: Previous Garment Commodity study

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VI.3.1. Incentive Scheme

Medication: In most of the garment factories visited (50-80%) medical expenses of permanent workers
are covered by the factory.

Allowance: workers at management level are provided with allowance in terms of some percentage of
their salary or fixed amount of money and transport service is given to other employees.

Uniform: most of the factories visited provide uniform for operators and metal gloves for cutting workers.

Insurance: All permanent workers are insured for damages they will face while they are at work.

VI.3.2. Skilled and Unskilled Labor

Although Ethiopia’s labor force possessed absolute advantage in terms of numbers, it does not mean that
there’s sufficient amount of qualified labor resource. Today most of the Ethiopians still have only very
low educational level. Garment factories in Ethiopia are seriously short of technicians, managers and
marketing personnel. There’s scarcity of designer, pattern maker and marketing professionals who has
received real high education.

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7. ENVIRONMENTAL AND SOCIOECONOMIC IMPACTS

7.1. Environmental Impacts of Garment Industry

Garment industry is not chemical intensive manufacturing subsector so that it has no polluting particles
except solid wastes filling the land and waste water used (chemical free) for washing the garment, which
are easily manageable. However the harmful effects will be resulted when the factory starts production
from textile production which undertakes the most energy and chemical intensive operations. This is the
unique feature of integrated garment factories which imply the factories are supplying raw materials by
themselves consequently, generate chemicals and gases which pollutes environment. However, from the
basis garment industry has only solid wastes such as rugs of fabric, fabric lining and marker papers etc;
casing land filling bust.
These wastes are easily manageable since it was sold for such materials consumers which are other
contributors of revenue. For instance, rugs of fabric are sold for an input to make pillow and other non-
important wastes are collected and burned.

7.2. Socio-Economic Significance of the Garment Industry

Employment opportunity

One of the major problems of developing countries is unemployment and government has designed a
policy and made economic decisions which enhance the job opportunity for unemployed citizens. Since
the garment sector use labor intensive technology, its prime benefits to the country’s economy is in terms
of employment creation.

According to the Ethiopian textile industry dev’t institute, more than 152 new investments are expected
during the second growth and transformation plan and the GTP II is also expected to create more than
170,000 job opportunities. During the period, it is also expected that ten industrial zones to be built
entirely by the government are expected to aid the realization of the plan.

Source of foreign currency

Most developed nations transfer from the textile and clothing manufacturing to the more sophisticated
industrial activity and garment need satisfied from other developing countries.

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So Ethiopia can have foreign market opportunities for its garment product and other by increasing the
possibility of foreign currency to the economy.

Linkage effects

Companies that produce textile and cotton can have better market by supplying raw material for garment
industry. The Ethiopian cotton production potential has contributed to the value adding process through
creating backward linkage effects with textile and garment manufacturing and cotton producing farmers in
the long run.

Source of government revenue

Garment industry is one of the recently flourishing subsectors unlike that of textile industry which is long
lived. Even though garment is at its infancy stage it shows encouraging results that is why the government
gives priority for the subsector by opening the door for both inland and foreign direct investors. At the
same time from this effect the government generates income in the form of income tax, receivable fee for
different securities and investment licenses.

Means of import substitution

Nowadays, export promotion and import substitution are the main strategic issue of Ethiopian economy.
To meet such strategic objective the government gives priority for manufacturing subsectors. Garment
industry is one of such priority areas which substitutes imported garment products by homeland products
which solves the shortage of foreign currency.

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8. PUSH, PULL AND SUCCESS FACTORS

8.1. Push factors

Poor quality of domestic raw material: Even though a number of textile and garment industries
exist, due to insufficient and poor quality of the local fabrics, competition in market is difficult. In
addition limited accessory industries exist for buttons, zippers, lacework and liner cloth etc. thus garment
industries are forced to import fabrics and accessories. Where, importing has its own problem since the
industries lack financial capacity, foreign purchase skills and proper supplier’s evaluation system, good
quality with optimum price and minimal delivery time couldn’t be achieved.

Poor quality products: This results due to poor understanding of quality by employees, less
management commitment on quality assurance rather they focus on quantity. Furthermore, customers are
not involved in product development stage and industries don’t properly do market research hence a gap
exists between customer requirement and garments made, which results in poor performance activities in
market and less satisfaction of customers. Quality control is done by using visual inspection which is not
effective and mostly attention is given for detecting defects of the products rather than preventing it during
production. Hence no analysis is done by using quality control techniques, which lets the industries,
monitor their processes and determine whether they are in or out of control.

Low productivity of garment industry: Most of garment industries in Ethiopia are performing low
due to lack of skilled labor (especially in terms of designing and pattern), poor working conditions,
absenteeism etc. Furthermore, Ethiopian garment industries have low capacity utilization and high cost of
production which has made the industries less competitive in market. Moreover most of these industries
have a working capital problem for purchasing good quality raw materials, purchase of modern equipment
and personnel training that are essential for productivity enhancement and quality control. The industry
average labor productivity for Chinese worker is 25 pieces per day whereas Ethiopian labor produces 7-8
pieces per day.

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Poor level of automation: Medium technology equipment, such as medium speed lockstitch and over
lock sewing machines exist, hence mostly operations performance depends on the skill of operators. Thus
automatic designing, pattern making, cutting machine, as well as computer controlled lock stitch are one
of the state of the art garment equipment that should be made available for better performance of the
sector. In addition, absence of value adding activities such as printing, embroidery, washing and drying
facilities further hinders customer satisfaction and competitiveness of the industries.

High cost of transportation: one of the constraints of garment subsectors is unreasonable payment of
transportation cost from the factory gate to the port while exporting the products and time delay at the port
which makes inconvenience with the customers. Basically customers focus on three things. These are
mass production, quality product and on time delivery.

Power interruption: like that of many manufacturing industries, garment industry is relatively power
intensive so that it is electric power driven. So that electric power interruption is the main constraints of
the subsector, which may result in delay of product delivery to the customers as per their deal and idleness
of the workers. Unexpected power interruptions have become the biggest problems for the garment sub-
sector; it is an essential requirement for the development of the garment sub-sector to ensure the power
supply capability.

High complexity of supply chain of cotton garment : value chain consisting of many interacting links
that need networking of inputs (coordination between stakeholders, suppliers, customers) and large
investment, new technologies and skilled labor force as well as image problem in European and US
markets etc have also resulted in poor performance of the industry. Furthermore due to poor practice of
performance measurement system and minimal benchmarking, the industries are unable to determine their
performance improvement and eventually couldn’t face the demand in quality as well as quantity.

Absence of significant linkages with domestic suppliers: This not only concerns fabric, but also most of
the accessories that are required for garment. Most of fabric and accessories produced by local textile
industries is either exported or consumed by them. As a result, it becomes difficult for garment factories to
purchase inputs from domestic market. Garment industries deal with this issue by importing textiles,
which is time consuming and increases lead time of order fulfillment.

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High rate of employee turnover: The garment industry is one of the labor intensive subsectors and
most of the margin is also derived from these factors of production. However, currently because of
migration of laborers to Arab countries and across borders most of garment factories suffered from such
employee turnover.

Delays and faults in delivery: Distribution channel to be effective and efficient it should be able to
deliver right product to right place at right time in a cost effective manner. Delays and faults in delivery
will affect the smooth functioning of the organization. So for a garment factory efficient distribution
channel is very important.

Uncertain demand prediction: Garment sub-sector is a highly time sensitive industry, usually with strict
time limit for its products. Since most of fabrics as well as accessories of Ethiopia’s garment sub- sector
have to be imported; every single deal has to undergo both procedures of import and export.

8.2. Pull Factors

Favorable Investment Policy and availablity of Credit Facility: The government has allocated a
substantial amount of finance for investors who would engage in textile and garment sector for export and
can apply loans for up to 70% of their investment project. This preferential financing scheme clearly
demonstrates that this sub sector is the priority area of the government.

Large potential of domestic, regional and international market: there is high potential of
unsatisfied demand for clothing.

The country's climatic conditions and land resources favor cotton growing (it has a wide raw
material base); the production of cotton is well integrated into the textile sector and with garment factories
relying heavily on domestically produced cotton.

Availability of trainable labor force and lower costs than other competing countries in the sector:

Compared with most of the developing countries in Asia, Latin America and Africa, Ethiopia has
prominent cost advantages in terms of Payment level for labors.

Peace and stability of the country: this is one of the requirements that potential international investors
are looking for. One of the main concerns for foreign investors and for potential new investors is the risk
of war. So Peace and security is necessary conditions to attract foreign investment.

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 8.3. Success Factors

Quality of products: The quality of garments is essential and through quality a company can differentiate
from its competitors.
To improve the quality of products, an organization can implement quality control divisions; maintain
quality standards, frequent quality checks and other strategies. The factor quality that is mentioned here, is
not only the quality of products, the idea is wider than that. Organization has to maintain quality in every
aspect. For example organization has to maintain quality of management, employees and etc.

Selecting key suppliers: For a garment factory another important factor is securing and selecting key
suppliers. Production of a garment factory is heavily depending on its suppliers. If there is any delay in
suppliers it will delay the whole production of the company. This will leads to customer dissatisfaction;
sometimes it will be worse if it lead to loss of customers. On the other hand, the quality of the inputs is
relying on the suppliers and also the price charged by the suppliers will determine the price of final output.
So selecting and retaining the best and suitable suppliers is very important for carrying out a garment
factory successfully.

Having own source of fabric: the major raw material for garment is fabric and so a garment
manufacturer is better to have its own source for consistent production and strong stance.

Professional management: good managers are able to access the latest available technology and most
efficient techniques and being able to expand operations in line with demand.

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9. DBE EXPERIENCE IN THE SUBSECTOR

DBE loan status report as at April 30, 2017 shows as 61 garment and textile companies have been
financed so far both at Head office and Branch level; and among them about 41companies (Br
4,157,356,020.98 in terms of value) of the financed projects are in default. Out of this value arrear
amount, the share of foreign companies investing in Ethiopia (ETUR TEXTILE PLC, ELSE ADDISE,
INDUSTRIAL DEVMNT PLC, and AYKAADDIS TEXTILE & INVESTGROUP PLC) is about 72%
(BR 3,004,462,949.41); and all of these companies loan were totally transferred to Project Rehabilitation
and Loan Recovery Directorate of bank due to the severity of the default and inability to be recovered by
other operating unit of the bank. The information obtained regarding the main reason why these
companies encountered with this amount of arrears were related to willful default by project owners; and
they follows the similar fashion of mismanagement of the project. Prevalence of such amount of arrears in
its Loan Portfolio in specific subsector warns DBE while financing such type of foreign companies
investing in domestic country in future in ways of bringing such activity into normal track through its own
appropriate management strategy.

As information obtained from different operating units of the bank, the other problem for this default
includes the following but not limited to:

 Plan changing at implementation stage (failure to prepare clearly defined, verified and achievable
plan)
 Loan diversification (e.g. misuse of companies budget and sell asset)
 Managerial problems
 Concentrated managerial decisions
 No performance reviews
 No accurate financial record keeping
 No managing and monitoring the cash conservations cycle to avoid the cash flow
problems
 Lack of organized management structure
 Lack of employees sense of conformity to project
 Firing local employees and replacing with foreign employees without justification

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 Operational problems
 Electrical fluctuations and cut off
 Lack of cotton fabrics domestically in terms of both quality and quantity
 Low labor productivity and high employee turnover
 Operating under (below) optimal capacity due to shortage of skilled man
 Delay in delivery time and high transportation cost
 Market problems
 Stiff competition in the international market
 Less bargaining power in the sales agreement because of limited customers
 Lack of clearly defined marketing strategy
 Delay of waste treatment plant implementation (in case of integration)
 High volumes of account receivables and poor management of working capital

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10. CONCLUSION AND RECOMMENDATIONS

10.1. Conclusion

The textile and garment sub-sector is one of the key targets of the government for generating hard
currency and employment generation. To this end, the government has set out a plan to generate 1 billion
US dollars in its five years Growth and Transformation Plan (GTP II). The government has also planned
to generate employment opportunities for 170,000 citizens during the plan period.

The material and inputs study reveals that finished fabrics supply recruited both from domestic and
majorly from international market. There is a supply shortfall in local market but also existing production
in quality and quantity do not fulfill the demand for garment factories. Moreover, the domestic textile
factories supply low quality fabrics (reject, 2 nd and 3rd grade) to domestic garment manufacturers while
using high quality fabrics either for their own consumption or for export. Heavy woven fabrics especially
denim fabrics is not locally produced. The local demand of denim fabrics is filled via import.

There is a possibility of importing fabrics to fill the supply shortfall domestically as the country used to do
in the past. But importing fabrics adversely affects the competitiveness of garment products by increasing
the price of the products above import price of similar products. This is mainly due to the fact that the
country has a competitive advantage in cotton fabrics in relation to cotton resource endowment. The
supply short fall and quality problems of domestically produced fabric is affecting garment manufacturers
which have no fabrics of their own and the severity of such problems is lower for firms which are
integrated and produce fabrics for their own consumption in manufacturing of different garment products.
The technology and machineries are not as such complicated and the only problem observed in this
spectrum is that some firms own old machinery which reduces their efficiency and capacity utilization
rates.

The market study shows that demand for garment products surpasses supply and it is an attractive one
throughout projection years implying that the domestic market is dependable. The demand for garment is
highly correlated with per capita consumption of garment, which is very low compared with other world
countries. Besides, there is a growing export performance following increase of demand for garment
articles manufactured by Ethiopia.

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Moreover, the existing operational non-integrated garment manufacturing firms produce at an average
capacity utilization rate of about 55.33 percent even though the integrated firms operate at relatively better
average capacity utilization rates of 67.73 percent. The major problem of non-integrated firms is low
quality products as a reflection of low quality of fabrics. Hence, market problems are likely to be faced by
the non-integrated garment manufacturing factories in the country due to low quality fabrics produced and
unsecured quality fabrics though there is a possibility of import.

The sub-sector requires special skilled man power in some specific areas such as designing and pattern
making beyond the availability of abundant unskilled labor in the country. Regarding environmental
impact, the industry does have negligible adverse effect and it can easily be managed.

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 10.2.Recommendations

While appraising a project that intends to engage in the production and marketing of garment, and making
a decision on financing of the project, all concerned organs of the bank should thoroughly examine each
part of the commodity study and use the data and information provided within it.

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11. PARAMETERS, TECHNICAL COEFFICIENTS AND BASIC ASSUMPTIONS

11.1. Basic Assumptions

This part of the study is dedicated to the determination of the coefficients and parameters which are used
for the estimation of costs and revenue in manufacturing of garment.
 Number of working days per annum………………………………….300
 Shift per day ………………………………………………………… 1

 Working hours per shift……………………………………………….. 8

11.2.Conversion rate of garment production (input – output relationship)

For export oriented garment items: Please refer Ethiopian Standard Input Output Coefficient
(SIOC) for Manufactured Textiles and Garments has been attached ere below in soft copy and/or at
annex part of the document (Source: Ministry of industry)

For domestic oriented garment items – Since production of garment that fulfill international
quality standard is also good for domestic market, standard input output coefficient prepared for
export oriented garment items can be applicable for domestic garment production.
Other conversion factors: (Source: previous garment commodity study)

- 1cone sewing thread = 5000m - Trouser = 20pcs/carton

- 1gross = 144 pcs of button - Fabric waste for all cloths =5-10%

- 1carton can pack 24 pcs of 48 neck size - Material waste except fabric = 0.25%

- 1carton can pack 36 pcs of less than 48 neck - 1 pc =2.66M2 including wastes of 7.5%
size

- 1 poly bag can pack 5 clothes

- 0.63kg=2.66M2

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11.3. Revenue

a) Conversion rate of garment production (input – output relationship)

b) Export current average sales price of typical garments

Average export selling price trend of garment products in USD:

S. No Type of products Unit of Measurement Average Export price (USD/unit or Pc)

1 T- Shirt pcs 9.84

2 Over coat for Adults pcs 21.57
3 Suit 3 Pcs for Children pcs 9.14
4 Suit 3 Pcs for Men pcs 28.62
5 Men’s Trousers pcs 11.48
6 Shirt pcs 7.61
7 Pants pcs 3.33
8 Socks for Children doz 2.37
9 Socks for Lady doz 4.07
10 Socks for Men doz 4.07
11 Skirts pcs 8.85
12 Field Jacket pcs 15.45
Others garments (in USD)

Sr. Garment type Description Unit export selling price Specific date
No (in USD)

1 Men’s Retro Shorts Contain 2 pieces per pack USD 2.18/2pieces pack May 03, 2017

2 Infants tank top - USD 1.35/pieces 02/11/2016

2 Readymade garments - USD 1.40/pieces 29/12/2016

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 11.4.Costs
11.4.1. Investment cost requirement

Machinery and equipments

 Lists machineries and equipments are listed on the technical part of this document;
hence please refer on page 48.

Building and construction - Please refer on page 60.

Note: The cost of building and machinery is expected to be taken from promoter’s/s’ bill of
quantity evaluated by the Bank’s Engineer/s.
Vehicle
Minimum Vehicles requirement
Sr. No. Type of vehicle Purpose

1 Truck Raw material & output transportation

2 Service vehicle For transportation of employees

3 Pickup vehicle For administrative works

4 Automobile For the manager

Note: The number of vehicles requirement depends on the production capacity of the planned garment
factory. Hence this parameter only determines the minimum vehicle requirement in terms of type.

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 11.4.2. Operational cost

11.4.2.1. Raw materials cost

Import

- Main raw materials, Trim and Accessories - Since list of raw materials for garment
manufacturing are vast, only costs of main raw materials that are repeatedly imported in different
periods are included. As information obtained from ERCA, they are about 212 general materials
that Ethiopia had imported repeatedly in different time periods, and their current average price as
of May 2017 has been attached in soft copy here below and/or stated in the annex part of the
document.

NB: If the article of product is not included in the list of above mentioned document, the material
balance (Input-Output) shall be determined in consultation with Ethiopia Textile Industry
Development Institute.

Zipper import price (source: zipper commodity study, December 2016)

Type Materials made Usage FOB Price at Ningbo (USD)

Open end Copper Wire Garment, Bag, Home Textile, Shoes $0.375

Open end Brass Garment, Bag, Home Textile, Shoes $0.291

Garment, Bag, Home Textile, Shoes

Open end Aluminum $0.298

Open end Plastic Garment, Bag, Home Textile, Shoes $0.302

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 Domestic purchase price of some fabrics:

Fabric type Description Domestic purchase price (in

BR) before VAT

100% cotton fabric Ne 34/1 RF KN combed BR 92.50/kg

100% cotton fabric Ne 30/1 RF KN combed BR 82.50/kg

11.4.2.2. Packaging materials cost

Current Price of typical packaging materials

Sr.no Types of packaging material Unit of measurement Unit price (in Br)
1 Suit cover pieces Use provided customer’s performa invoice
since their type is diverse in nature.
2 Hanger pieces >>

4 Collar supporter pieces >>

5 pin Packet >>

6 Polyethylene bags Kg >>

7 Corrugated box (cartons) pieces >>

8 Labels of different sizes pieces >>

9 Scotch tape - 2.50

11.4.2.3. Employee uniform

 Uniform cost....................................................................................................average 350 birr/person

11.4.2.4. Advertisement cost – The advertising expense depends on the chosen promotional
strategy which will be applied by the incumbent firm. Hence, please refer “Cross
cutting data base, 2017” regarding the possible alternatives of advertising and
associated costs.

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 11.4.2.5. Utilities

 Electricity Cost/KW/h is as per the specification and capacity of the proposed machinery.
 Water and Electricity Tariff Rate: For recent electricity and water tariff rate, please refer to the
“Cross Cutting Project Supporting Data, 2017’’
 Stationary Expense……………………..........0.2% of sales
 Medical expense…………………………… 5% of wage and salary
 Telephone, Fax & Internet: on average 0.12% of annual sales

Fuel cost
Gross Pay Load Distance travelled Fuel Fuel Consumption per AVERAGE
Vehicle in one liter Consumption per Km for each ton of lit/km/ton
Weight Km load
7.5 Ton 3.124 ton 5.840 km/lit 0.171 lit/km 0.055 lit/km/ton 0.035
12 Ton 6.311 ton 5.500 km/lit 0.182 lit/km 0.029 lit/km/ton
18 Ton 10.198 ton 4.540 km/lit 0.220 lit/km 0.022 lit/km/ton

 Cost of oil and lubricant: 2% of fuel cost

 Traveling Expense: - The cost of travel and per diem is found to be on average 1.27% of
annual salary.

11.4.2.6. Insurance
- The following are the major insurance categories.
Description Types of Insurance
Buildings Earthquake and fire
Machinery & equipments Fire and lightning
and Furniture
Vehicles Accidents( life and property damage, and third party
insurance)
Life insurance Working hrs and work man composition for employee and 24
hrs personal and work team for managers
NB: For the rate of premium, please refer to “Cross Cutting Project Supporting Data, 2017’’.

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 11.4.2.7. Depreciation and Amortization

Item Rate
a. Building and Construction--------------------5% of original value
b. Machinery and Equipment--------------------10% of original value
c. Furniture and fixture---------------------------10% of original value
d. Vehicles------------------------------------------20% of original value
e. Generator----------------------------------------10% of original value
f. Auxiliary machineries--------------------------20% of original value

11.4.2.8. Repair and Maintenance

Item Rate

a. Building and Construction---------------------2% of original cost

b. Machinery & Equipment-----------------------5% of original cost

c. Furniture and Fixture----------------------------5% of original cost

d. Vehicles-------------------------------------------5% of original cost

e. Generator------------------------------------------5% of original cost

11.4.2.9. Land Lease Cost

Land lease cost is decided according to land lease agreement entered between the project and
concerned office from where the land would be availed.

11.5. Working capital requirements

Determination of working capital requirement is one of the major short-term planning which plays very
vital role for operating the business successfully. The determination of working capital is to be done very
effectively otherwise there may be over or under estimation of working capital. The amount of working
capital is determined by a wide variety of factors. Some of which are nature of business, seasonality of
operations, production cycle, production policy, credit policy, market condition. Based on the above
mentioned factors, the working capital determination for garment manufacturing the following periods could be
taken in to account.

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Description Holding period Reason for determination
in month
Raw material local fabric 1 The local fabric is by order
Raw material import 4 Four months b/c it takes four month until L/C will open and
processed
Packing materials 1 They can sale within a month (cash based sale)
Accessories 4 Four months b/c it takes four month until L/C will open and
processed
Salary and Wages 1 They can sale within a month (cash based sale)
Work in progress *
Finished product 1-2 weeks Processing for export market
Accounts Receivable - Cash sales is practiced
Fuel, oil & lubricants 1 They can sale within a month (cash based sale)
Stationary and P.T.T 1 They can sale within a month (cash based sale)
Travel and per diem 1 They can sale within a month (cash based sale)
Utilities 1

Source: Previous Garment Commodity study

*Work in progress differs from one garment article to other. As a result, the holding period shall be
determined in consideration of the nature of the product under caption.

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REFERENCE

 Ministry of Industry

 Ethiopian Revenue and customs Authority

 ITC (International Trade Center)

 Hawassa Industrial Park Development Corporation

 Ethiopian Textile Development Institute

 http://www.dummies.com/crafts/knitting/knitting-yarn/looking-at-yarn-from-the-inside-out

 http://admin.umt.edu.pk/Media/Site/STD/FileManager/OsamaArticle/Dec4/Knitting
%20Classification.pdf

 http://www2.ca.uky.edu/HES/fcs/FACTSHTS/CT-MMB-165.pdf

 http://www.uen.org/cte/family/clothing-2/downloads/textiles/knit.pdf

 http://bolgerm.victorschools.org/Notes%20on%20fibers%20fabrics.pdf

 http://textilelearner.blogspot.com/2013/07/list-of-garment-accessories-l-features.htm

 https://www.indiamart.com/poonam-plastic/garment-packaging-materials.html

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