Indian firm to plant Africa’s largest cotton mill here

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The Mumbai-based ShriVallabh Pittie (SVP) group has launched a USD 550 million investment in Ethiopia to set up a cotton mill that will produce cotton yarn fully for export.

The company has kick-started official operations and construction of the plant in Ethiopia.

Vinod Kumar Pittie, chairman of the SVP, told The Reporter that his will be the largest spin producing plant in Ethiopia and the continent and will consume half a billion dollars for construction. Pittie said that the financing scheme is arranged in a way that the Development Bank of Ethiopia (DBE) agreed to provide a 52 percent term loan of the total investment required. The remaining 48 percent will be secured through equity financing. Hence, for the first phase, DBE will avail USD 23 million and SVP will bring USD 22 million, making a total of USD 45 million. According to Pittie, the project commenced construction yesterday.

At a press conference held on Thursday at Hilton, Tadesse Haile, Minister of State for Industry spoke of the urgency that the company has to realize the project as soon as possible. Sileshi Lemma, Director General of the Ethiopian Textile Industry Development Institute, echoed the Minister of State’s call that SVP has to come in play immediately. He told reporters that the timing at which SVP is present in Ethiopia is a good opportunity for the underperforming textile and garment industry. Currently, some 15 foreign companies are awaiting the completion of the construction of Bole Lemi Industry Zone, which is progressing in the suburbs of the capital.

When operational, SVP is said to be able to provide direct employment opportunity for three thousand people and indirectly for some 10 thousand individuals. Later after the third year of operation, SVP is planned to generate close to USD 400 million from exports. The 150-year-old SVP group has managed to obtain 50 hectares of land in Kombolcha town, 365km north-east of the capital. According to Abere Abera, mayor of Kombolcha, the total land area SVP was looking for was 100 hectares. Hence, for the first phase project, the Amhara Regional State, with the consent of the federal authority, has approved and agreed to provide the remaining 50 hectares in the second phase of operations.

SVP Textiles Private Limited Company, the registered name of SVP group in Ethiopia, will set a cotton mill plant that will produce 280 tonnes of yarn and spin per day.

The government of Ethiopia had planned to amass USD 1.2 billion from the manufacturing industry. However, the nine-month performance shows that the export earnings fall way below USD 300 million. Out of that amount, the share of the textile and garment subsectors was USD 85 million. The export of yarn totaled USD 25 million, proving the textile and garment manufacturing subsector feeds itself, though not always, Sileshi noted.

Source – the Reporter