(EBC; November 29, 2016) - Israel-based tailored clothing manufacturer Bagir Group has shipped the first trouser exports from its new factory in Ethiopia - a move the company's CEO has told just-style is a game-changer for the business.
"We are the first to manufacture and export tailored garments from Ethiopia," Eran Itzhak explains, adding that the company is currently making 600 trousers in export quality per day and intends to increase this to 3,000 trousers per day in the next 18 months, with jacket lines to follow.
Indeed, production at the facility is seen rising to 4,000 suits a day within three years, in line with Bagir's goal to develop Ethiopia as its main production base during this time.
The move is part of an ongoing restructuring at Bagir, which supplies customers in the US, UK, Europe, Australia and South Africa, including the UK's Arcadia Group, whose brands include Burton and Topman.
The business is now debt-free for the first time in nearly a decade, has refocused its manufacturing base on Ethiopia, Egypt and Vietnam, and is fighting back with new products and a return to innovation.
"Africa, to my understanding, is the next best thing, and you will see that more and more brands and manufacturers understand this, and you can already see huge investments coming from China to Ethiopia," Itzhak says.
"Yes there are issues like the infrastructure, transportation, the lack of tradition, the need to bring people from Sri Lanka and Bangladesh to manage the lines - but this is part of the sourcing game. I don't see them as difficulties; I see them as challenges. And there is a big prize waiting for the ones who are willing to meet these challenges."
Bagir has spent more than two years getting up to speed in Ethiopia, where it invested $1.5m to buy a 50% stake in Nazareth Garments, whose factory produced uniforms for the Ethiopian police and Ethiopian airlines.
As well as bringing in its own general manager, CTO and quality manager, the company opened an on-site training school because "no-one in Ethiopia knew how to make suits at Bagir standards."
Despite recent unrest in Ethiopia, Itzhak is firm in his belief the country has "all the key elements," including duty-free rules, preferential market access to the EU through the Everything But Arms (EBA) scheme, and duty-free access to the US through AGOA (the African Growth and Opportunity Act), competitive labour costs, government support and huge potential to grow further.
"We are managing business as usual at our factory and will continue our plans. We expect to get $3-4m from Ethiopia next year and are not changing our focus or expectations."
He adds: "I'm not preparing any back-up plan for Ethiopia for the simple reason that there is no country that can offer the same advantages and benefits."
Source: just-style.com
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