Ethiopia based Awassa Textile will undertake an expansion project under which it will double its production through an investment of Birr 168 million.
According to a leading Ethiopian daily, to undertake the expansion, Awassa Textile signed a loan agreement with the Development Bank of Ethiopia (DBE).
“Of the Birr 168 million, Awassa will utilise Birr 134 million Birr on expansion and the rest will be used as working capital,” its general manager Eyasu Atnafu said.
Currently, the company produces four tons of textiles on a daily basis and post expansion; output will double to 8 million tons.
Once the expansion project is over, turnover of Awassa will reach Birr 45 million and from exporting yarns to just Kenya now, it will also export many other textile products to markets in Europe and the US.
Awassa Textile was originally promoted and set-up by the government in 1989, but in 2011, the ownership was transferred to Dukem Textile Plc, which is currently managing the plant.
Awassa mainly produces yarns, bed sheets, mattress covers, school uniforms, workers uniforms and threads.
In fiscal 2010-11, the Ethiopian government had initiated the first ‘Growth and Transformation Plan’ (GTP) for the textile industry which concludes on July 7, 2015.
During the course of the first GTP, the government had planned to boost textile exports to $1 billion; however, exports from the sector till the third quarter of current fiscal could only reach $427 million.
As per statistics, there are 130 textile factories, both medium and large scales in the country, of which 37 are owned by foreign investors.
