Why the next Big Development of Textiles should and will happen in Africa?

And why creating jobs is better than giving direct aid? By A.R.Balasundharam- Independent Textile Consultant- balsram@hotmail.com I am qualified Textile Technologist from India with about 25 years experience in various aspects of operations of Textile Industry like Projects, Manufacturing, Costing and Marketing.I have contributed as a Top Management person effectively in ensuring sustainable manufacturing operations in three different Greenfield Textile projects of Yarn spinning, Weaving and Dyeing directly employing about 5000 persons and indirectly 5000 persons . I worked in India for about 18 years and still working in Thailand for the last 7 years .Now I am looking for a opportunity to be of much bigger value to the world for sustainable poverty alleviation by Partnering International Developmental organization or an International Bank. I am looking for an opportunity to play a role in much wider scope for the emerging world and especially many of the less developed countries of Africa. The abject poverty in most of the emerging economies needs sustained development of private sector apart from public sector. While there is glimmer of light for sustainable poverty reduction in big population countries like China, India and other emerging economies like Brazil,Russia,Thailand and Vietnam the situation is so far very poor in most of Africa and some countries of Asia. Many of Asian economies have huge scope in High Tech manufacturing, Outsourcing Services and Information Technology apart from traditional Agriculture and mass manufacturing. In case of Textiles the table below gives the idea spread of industryEconomy Annual Cotton ProductionMillion Tons Africa 1.2 Asia 16.9 ROW (without 7.9 USA) Percentage of Percentage of World World Capacity Yarn Spinning Capacity 4.2% 3.30 % 65.5% 70.60 % 30.3% 26.10 %

In the ROW (other than USA) area and USA the spinning capacity is rapidly falling. But the African Franc zone in spite of its fledgling democracies like Benin, Ghana , Tanzania and some other countries is not getting any of the yarn spinning capacities even to match its 4.2% of World Cotton production.Most of the textile capacities of Africa is concentrated in few countries like Egypt and Nigeria. In another angle of looking at the textile picture-

Economy

Africa Asia ROW

Populatio n 2004 in Millions 750 3,700 1,930

Percentage of World Population 11.8% 58.0% 30.2%

Population Percentage Yarn Spinning 2050 in of World (Ring+OE) Millions Population Capacity % 1,600 16.0% 3.30 % 5,920 59.2% 70.60 % 2,479 24.8% 26.10 %

There is an urgent need and scope to kick start and sustain Textile Industry in Africa to match its population growth in coming years. The immediate target is to have Yarn spinning and Fabric capacities of about 10% of World capacities. With the help of USA cotton and some synthetic fibers like Polyester and Viscose, most of which is in anyway exported to other countries, Africa can to be targeted to achieve 10% of textile spinning, weaving/knitting, processing and garmenting capacities in the long term to match its population growth. The advantage of textile industry is its ability to aide primary Agriculture sector growth and employment and also the Infrastructure like Energy and Ports and Services sector. The sustained operations of textile industry can help to kick start the manufacturing in other sectors by bringing the much needed manufacturing culture to poor economies which is crucial to stem the illegal immigration of desperate populace to Europe and elsewhere resulting in unrest and problems throughout the world. Employment Potential of Textile Industry Number of Persons ( Man Days) required to produce 1 Ton of the item Item Direct Indirect (Energy,Transport, Packing Total Employment Materials, Healthcare and other services) and Allied (Agriculture) Employment Yarn 10 70 90 Fabric 10 Garment 200 150 350 If Africa can manage to convert 10% of the world cotton production into fabric and with only 25% (Less than 1% of World Garment capacity) of that into Garments to start with , the total employment that can be generated is about 1.4 Million jobs which is a small beginning but a large improvement to the current status. In case of Yarn Spinning and Fabric manufacturing, 80% of the manufacturing effectiveness is contributed by Machines and Management skills and 20% by Workers. The required management skills can be outsourced till Africa develops its own skills. In case of Garments the ratio is about 30% and 70% is very sensitive to workers skills and also requires more and more soft skills in design, value addition , etc.,Well developed

Spinning and Fabric industry can assist the Garment industry to develop the required skill sets with its outside world contacts. To compete with efficient and huge Asian operations in Yarn and Fabric manufacturing Poor Asian economies and Africa have to leapfrog the technology to latest spinning technologies like Open end and Vortex and Weaving technologies like Airjet.This will enable sustained operations in poor economies with much less risk due to inherent inefficiencies in infrastructure and labor force. This kind of leapfrogging of technologies happened with Mobile phones and Digital Cameras in the fast growing economies like China and India and also some African economies like Kenya. In addition to cotton there is scope to develop integrated textile industry in syntheics and blends also from yarn to garments. Here also if Africa is able to produce 10% of the Global capacity requirements from Yarn to Garments it can create 2.5 Million Jobs. The investment required is about USD 40 Billion to set up 20 % of Global Yarn Fabric capacity( 10% Cotton and 10% Synthetics and Blends) is about USD 8.4 Billion and for setting of 50% Garment capacity of the above 20% Yarn and Fabric capacity ( Cotton + Synthetics+Blends) . This can generate 3 million Direct jobs and 6 Million total jobs . The investment required is USD 16,000 / job . This is far better than any direct aid even if the business looses money for first 5 years at the rate of about 10% per year and then break even. This creates skills and motivation for so many people to survive on their own rather than waiting for free aid every day and without any scope for any sustainability when aid is stopped. Poor and least developed African countries can be assisted to integrate with supply chain of Global textile industry across the suitable value chain through their private sector development. With in depth Technological knowledge in Textiles, Practical experience in managing successful private industry in emerging economies of India and Thailand and Passion and Commitment for poverty alleviation throughout the world, I hope to be a very effective consultant to any investment proposal in Textiles. With experience and knowledge of Global supply chain, Value chain , Marketing and Economics of textile industry, I hope to make some contribution in framing some Global branded marketing strategies like CMIA ( Cotton Made in Africa) , (Product) RED (www.joinred.com) through right partners in order help the textile industry of poor African economies to stand and sustain on their own.