One of the well-known brands within the Hawassa Industrial Park (HIP), US-based Philip Van Heusen (PVH) quit its production intending to “focus on sourcing” which it specializes in, The Reporter learned.
According to three employees, two quality controllers and one finishing line attendant, the company has informed its employees that it will quit its productions as of December 5, 2021. A notice is also said to have been placed within the plant at one of the sheds at HIP.
One employee even said that production has already stopped at the plant PVH owned within the industrial park and employees were told to go home. The employees The Reporter spoke to claimed that they have been told they would be duly compensated.
In a statement issued later, the company said “PVH has worked for over five years with government, civil society and business partners in Ethiopia to make the Hawassa Industrial Park a leader in inclusive development. We are proud of the work we have done there. We continue to work with our local and international partners to develop a sustainable and scalable business there that benefits the workers and the surrounding communities, economies and environment. PVH remains committed to its third-party manufacturing partners in Hawassa Industrial Park.”
Sandokan Debebe, Chief Executive Officer of the Industrial Parks Development Corporation (IPDC), told The Reporter that they are informed of the decision by PVH. Although employees said that PVH is quitting production because of Ethiopia’s suspension from the US African Growth Opportunity Act (AGOA), Sandokan said the company informed his corporation that it intends to focus on sourcing products.
According to Sandokan, Ethiopia is the first place for PVH to venture into production in partnership with Arvind Textile, an Indian company specializing in apparel and textile industry. And, this year, the joint venture between the two has closed one of the two sheds it leased within the HIP. The current closure concerns the remaining one shed within the park.
Sandokan also added that no such manufacturers would mobilize their sophisticated machinery because of AGOA’s suspension but would focus on other markets such as Europe as others are doing.
“This is not a sector they would just quit and leave,” he said as “many have parent companies requiring a thread of decisions and they come with huge machinery to run their business.”
While AGOA suspension has also made some consider relocation, Sandokan said that this is totally false and no other producer is intending to quit production in Ethiopia.
A statement from President Joe Biden announcing the banning of Ethiopia from AGOA indicated that this is happening “for gross violations of internationally recognized human rights.”
In a virtual talk with Ethiopia’s Chief Trade Negotiator and Policy Advisor to the Prime Minister, Mamo Meheretu, US Trade Representative Katherine Tai “raised the ongoing violations of internationally recognized human rights amid the ongoing conflict and humanitarian crisis in northern Ethiopia, could affect Ethiopia’s future African Growth and Opportunity Act (AGOA) eligibility if unaddressed.”
Until June 2021, manufacturers within HIP earned USD 114 million mainly from the export of textile and garment products.