Thursday, February 9, 2023
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BusinessHawassa Industrial Park to house 21 foreign, domestic investors

Hawassa Industrial Park to house 21 foreign, domestic investors

The much anticipated Hawassa Industrial Park is set to be operational after nine months of construction. So far, it has attracted 15 foreign and six local manufacturers who have already leased sheds.

In a press conference he held together with his subordinates on Thursday Arkebe Okubay (PhD), special advisor to the Prime Minster and board chairman of the Industrial Parks Development Corporation (IPDC), said that Hawassa Industrial Park, which specializes in textile and apparel, has attracted US fashion brands operator Phillips-Van Heusen Corporation (PVH Corp.), among others.

Set to be inaugurated on Wednesday by Prime Minister Hailemariam Dessalegn, the eco-friendly and model park will be the single most dominant contributor to the country’s manufacturing sector. According to Arkebe, the park will help the country generate one billion dollars from export revenues. In addition to that, factories in the park are expected to create some 60,000 jobs.

According to Arkebe, the establishment of the Hawassa Industrial Park is a milestone and would enable the country generate revenue from the textile and apparel industry. Currently, a little over USD 100 million was secured from the export of textile and apparel. For years the entire industry has been able to create some 53,000 jobs. Arkebe said that the Hawassa Park will generate ten times more hard currency and create more jobs singlehandedly.

Investing some 250 million dollars to build the industry park, the government has managed to develop 37 factory sheds on a 300,000sqm plot with additional 120,000sqm land ready to be developed out of the total 1.3 million sqm plot.

US fashion brand operators PVH and Vanity Fair (US), H&M (Sweden), Wuxi Jinmao Foreign Trade Company (China), Hirdaramani Group (Sri Lanka), Arvind and Raymond (India), TAL and EPIC (Hong Kong), and PTU (Indonesia) are some of the 15 foreign companies to be stationed in the Park.

In addition to that, six local businesses have secured factory sheds after consecutive persuasions and jaw-dropping incentives. Akaki Textile PLC, Selena Trading PLC, Aster Getachew, Quadrant Investment, KJ PLC and NASA Construction Equipment Leasing Company are the six local tenants that have made it to the final stage of joining the Park. Ethnic Fashions and Lab Bras Agro Processing companies have withdrawn from joining the Park because of capacity related reasons, Belachew Mekuria (PhD) deputy commissioner of EIC, said.

To alleviate such bottlenecks, Arkebe pledged to be more accommodative and include more local manufactures where 5,500sqm factory sheds will be shared by four local companies. In addition, local companies will be provided with an 85/15 credit facility where the Development Bank of Ethiopia (DBE) will avail 85 percent of the financing and the remaining will be equity contributions of local investors. Cost sharing, providing trainings, expatriates wages, preparation of business proposals and duty free privileges are among the incentives the government intends to provide to local businesses.

That said, Arkebe insisted that production capacity is the critical outcome that determines the survival of local investors in the Hawasswa Industrial Park. According to Arkebe, in the first year of operations, local businesses are required to meet 70 percent of the production capacity foreign firms have. In the second year, the production capacity—in relation to foreign companies—is expected to mount to 85 percent and in the third year local companies should reach 100 percent production capacity. If they are unable to perform at this scale, Arkebe said that they would be kicked out of the Park.

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