Embed Size (px)
Citation preview
1
BOTTOM UP!PROMOTING A SUSTAINABLE COTTON &
GARMENT VALUE CHAIN FROM ETHIOPIAN
COTTON TO EUROPEAN CONSUMERS
APRIL 2019 – 2022
PARTNERS
• SOLIDARIDAD EUROPE
• SOLIDARIDAD ETHIOPIA
• DANISH ETHICAL TRADING INITIATIVE
• AID BY TRADE FOUNDATION
• MVO NEDERLAND
BACKGROUND
• BETTER MILL INITIATIVE (2015-2019)
• COTTON FEASIBILITY STUDY WITH H&M
• PILOT INITIATIVE COTTON (EP, H&M)
TO CONTRIBUTE TO A SUSTAINABLE, INCLUSIVE AND TRANSPARENT VALUE CHAIN THAT
GENERATES BUSINESS GROWTH, IMPROVES WORKING CONDITIONS, AND PROMOTES
LABOUR AND ENVIRONMENTAL STANDARDS AND RESPONSIBLE PURCHASING PRACTICES IN
THE COTTON AND GARMENTS INDUSTRY IN ETHIOPIA AND EUROPE BY 2021.
2
OVERALL OBJECTIVE
3
OUTCOMESSECURED TRACEABILITY, QUALITY AND
INCREASED VOLUMES OF VERIFIED
SUSTAINABLE COTTON BY 1 PRODUCER
UNION, 3 COMMERCIAL FARMS AND 2
GINNERIES BENEFITTING 2,000 FARMERS
AND 2,200 WORKERS
IMPROVED ENVIRONMENTAL & SOCIAL
PERFORMANCE, ADOPTION OF
STANDARDS, LOCAL UPTAKE OF COTTON
AND TRANSPARENCY OF 8
MILLS/FACTORIES BENEFITTING 17,000
WORKERS
ENSURED WIDER UPTAKE, KNOWLEDGE,
AWARENESS AND IMPROVED POLICIES
SUPPORTIVE OF RESPONSIBLE
PRODUCTION AMONG 3 GOVERNMENT
INSTITUTIONS, 2 PRIVATE SECTOR
ASSOCIATIONS & 8 FACTORIES/MILLS
4
ENSURED PURCHASING OF SUSTAINABLE
(VERIFIED) GARMENTS FOR THE EU
MARKET BY 2 INTERNATIONAL BUYERS
FROM 8 MILLS/FACTORIES
IMPROVED AWARENESS, TRANSPARENCY
AND/OR WIDER MARKET UPTAKE OF
SUSTAINABLE GARMENTS FROM ETHIOPIA
BY AT LEAST 175 BUSINESSES FOR THE
EU MARKET
IMPROVED KNOWLEDGE AND AWARENESS
AMONG 1.2 MILLION CONSUMERS IN
GERMANY, DENMARK & THE
NETHERLANDS ON SUSTAINABILITY
ISSUES IN THE COTTON AND GARMENT
VALUE CHAIN
Funded by the Development Cooperation
Instrument of the European Union
MVO NEDERLAND
SOURCING GARMENTSAND TEXTILE IN ETHIOPIA
OPPORTUNITIES AND CHALLENGES
Marjolein van Gendt, MVO Nederland
New report:
Sourcing textile and garments in
Ethiopia – A new sourcing destination
MVO NEDERLAND
STRUCTURE▪ POTENTIAL OF THE SECTOR
▪ COMMERCIAL CHALLENGES
▪ SCP CHALLENGES
▪ THE FUTURE
MVO NEDERLAND
DEVELOPMENT OF T&G SECTOR
Potential of sector
MVO NEDERLAND
ETHIOPIA: AFRICA’S NEW GROWTH ENGINE
8
Potential of sector
Greater social stability
Youthful potential
Privatisation
Promising start-up ecosystem
Strategic location
MVO NEDERLAND
COMPETITIVE ETHIOPIA
9
Potential of sector
MVO NEDERLAND
COTTON
10
Commercial challenges
MVO NEDERLAND
IMPORT/EXPORT DIFFICULTIES
11
Commercial challenges
MVO NEDERLAND
LOW WORKFORCE PRODUCTIVITY
12
Commercial challenges
MVO NEDERLAND
WAGES
Sourcing textile and garments in Ethiopia - A new sourcing destination13
SCP challenges
Source: Wageindicator.org. 3000 Ethiopian Birr roughly equals 100 USD.
MVO NEDERLAND
ILO FOUR FUNDAMENTAL PRINCIPLES AND RIGHTS AT WORK
• Child labour
• Forced labour
• Discrimination at
work
• Freedom of
association and
the right of
collective
bargaining
Sourcing textile and garments in Ethiopia - A new sourcing destination14
SCP challenges
MVO NEDERLAND
FUTURE
Working on
improvements:
▪ UNIDO
▪ GIZ
▪ Better Work
▪ Solidaridad (BMI
and Bottom UP!)
▪ CmiA
▪ Enterprise
Partners
▪ European Union
▪ DEG
▪ ILO
▪ IFTLGW
▪ USAID
▪ Private
companies like
H&M
15
MVO NEDERLAND
MORE INFORMATION
Marjolein van Gendt
New report available online soon at
mvonederland.nl:
Sourcing textile and garments in
Ethiopia – A new sourcing destination
Beconnected Industrial
Geert van den Hoek
Beconnected in Ethiopia
2014Start Beconnected Africa in
Ethiopia
First buying house in Ethiopia
2015Beconnected Industrial
State of the art #1 Labeling & Printing factory in Ethiopia
Geert van den Hoek
Beconnected Industrial
Beconnected Industrial
Beconnected
ERVE
Why we chooseEthiopia?
Next sourcing country? Risk
NO BLD (Rana Plaza)
Worker favoring labor law
OpportunitySupply chain
Control production
CostsWages
Initial strategy forEthiopia
New optionvs. Asia
Basic garments
NominationsBrands
Volume
Grow industrySmall factories
Vertical factories
Last five years &Industry now
Textile & Garment units
<200 units
Most factories local & small
Export performance
< $180m
Reasons for industry slowdown
Industry developmentMaturity of industry
Speed of developments
Pricing & productivity
Low outputs
Long lead-times
Infrastructure
Ethiopia is landlocked
Transport cost
Transport duration
“Ethiopian” situation
Ease of doing business
Bureaucracy
Political stability
Adapting & new strategy
Product portfolioNew products
Invest
New businessExport (Kenya / Tanzania)
New nominations
New businessInternational factories
CMT
Current developments
Solve bottleneckIn-house accessories
Domestic accessories
Export growthBrand strategy
New brands
Industry parksFunctional & running
Expansion of Asian operation
InvestmentsNew parks
New investments
Beconnected now and future
SituationGrowth
Profit
Future plansExpansion
Further investments
ExperienceSolid supplier base
Competitive products vs Asia
Prediction growthEthiopia
GrowthIndustry parks & logistics
FDI & new factories
Efficiency improvements
Value ChainFabric mills / Dyeing
facilities
Trims (zippers, buttons, etc)
Brands & buyersH&M, TCP, PVH, Levi’s,
Decathlon, Auchan, LIDL, Carters, Gerber, etc.
You? What’s the next step?
More information
Geert van den Hoek
www.beconnectedindustrial.com
www.beconnected.com
www.erve.com
MVO NEDERLAND
QUESTIONS&
ANSWERS
PUTTING YOUR COMPANY IN THE LIMELIGHT WITH CMIA
DATE: 02.05.2016
From Field to FashionEthiopia‘s potential for sustainablecotton textile supply chainsAlexandra Perschau, December 2019
The Cotton made in Africa initiative creates sustainable supply chains
09.01.2020COTTON MADE IN AFRICA – Bottom UP! Webinar December 2019 30
CmiA invests licence fee in Africa
- Farmer trainings - Certification - M&E- Community projects
Farmers produce sustainable cotton
- No GMO- Reduced toxic load
& carbon footprint- Rain water only
CmiA cotton is traded by nominated cotton traders worldwide
CmiA cotton is processed in retail partners´ supply chain
Retailers/brands pay a licence fee to use the CmiAproduct label~ 90 million CmiAtextiles in 2017
5
1
2
3
4
31
Cotton made in Africa (CmiA) works with 20+ partners in Sub-Saharan Africa
Addis Ababa
Afar
Tigray
Amhara
Benishangul Gumuz
OromiaSomali
SNNPR
Gambella
Burkina Faso
Côte d‘Ivoire
Ghana
Cameroon
Zambia
Mozambique
Tanzania
Uganda
Ethiopia
Nigeria
COTTON MADE IN AFRICA – Bottom UP! Webinar December 2019
32
Ethiopia‘s vision for the national cotton sector (National Cotton Development Strategy NCDS 2017-2032)
Addis Ababa
Afar
Tigray
Amhara
Benishangul Gumuz
OromiaSomali
SNNPR
Gambella
21%
3%
46%
30%
Area in 2016/17 per type of farming systems % of total production
Comercial Irrigated
Small Irrigated
Comercial Rainfed
Small Rainfed
Source: ETIDI Presentation 2018
76% rain fed fed 24% irrigated
• Government considers cotton as raw material for the job engine textile industry
• Target: from 80,000 ha area (2017) increase to 1 Million ha in 2032• Sustainability emphasized, but many challenges exist and will even increase
if growth is realized at the envisaged pace
COTTON MADE IN AFRICA – Bottom UP! Webinar December 2019
33
Actors and projects on (sustainable) cotton production
National
• Governmental: MoI, MoANR, EIIDE, ETIDI, EP
• Association: ECPGEA
• Ginning/Agri-Business
• Investors (often combined Agri + Textiles)
• NGO(s): PAN Ethiopia, Solidaridad Ethiopia
International
• Standards: CmiA, Organic, BCI
• Brands & Retailers: H&M, IKEA, etc.
• International NGOs: PAN UK, Solidaridad NL
• Donors: DIFID, GIZ
COTTON MADE IN AFRICA – Bottom UP! Webinar December 2019
34
Different existing and emerging approaches for sustainable cotton in Ethiopia
Solidaridad / Bottom Up
CmiA Organic
Who? Solidaridad AbTF / ECPGEA PAN Ethiopia/ Shelle MellaCooperative
Where? Afar/ Tigray North Gondar/ Amhara Arba Minch/ SNNPR
Farming-System Large Farms + smallholders / rain-fed + irrigated
Smallholders/rain-fed smallholders/ irrigated
Nr of Farmers & Lint Cotton
Ca. 200 + (3 Large Farms);65 tons
Ca. 15.000 farmers;10.000 tons
Ca. 200 (>4.000 trained in IPM)Ca 60 tons
Perspectives Objective 2000 smallholder farmers
Region currently not accessible for audit – nocertified cotton currentlyavailable
Growth potential; purchaseat premium price securedon national market
COTTON MADE IN AFRICA – Bottom UP! Webinar December 2019
Ethiopia about to formally apply for Better Cotton Initiative (BCI) New Country Start-Up Process.
• Biodiversity issues, such as missing crop rotation
• Soil fertility management related to delayed adoption of Conservation Agriculture
• Tillage methods supporting soil erosion
• Use of unacceptable pesticides, e.g. Endosulfan
• Unsustainable irrigation practices
• Problematic labour conditions for farm workers
• Seed cotton quality aspects, including (re-)use of (damaged) polybags
• Additional challenges on ginnery level, esp. health & safety and waste management
35
Key sustainability gaps encountered in Ethiopia
COTTON MADE IN AFRICA – Bottom UP! Webinar December 2019
Opportunities• Field to Fashion potential Demand for sustainable cotton from international brands supports required change of current status quo
Political will to support system change International expertise available/accessible to support smallholders and large farms
Challenges• Improved linkages & communication
between actors in the supply chain needed
• Coordination of activties of various actors
• Building technical knowledge and management capacities required
• (Substantial) Investments in „hardware“ needed
36
Summary of opportunities and challenges
COTTON MADE IN AFRICA – Bottom UP! Webinar December 2019
THANK YOU
37
COTTON MADE IN AFRICA – Bottom UP! Webinar December 2019
Alexandra Perschau
Director Standard & Outreach Africa
Gurlittstr. 14
20099 Hamburg
Germany
Tel: +49 (0) 40 2576 755 31
www.cottonmadeinafrica.org
MVO NEDERLAND
QUESTIONS&
ANSWERS
General Information
H&M’S SUSTAINABLE SOURCING STRATEGY IN ETHIOPIA
Gabriel Prodip Sara SeyedSustainability at H&M Ethiopia
General Information
Federal government structure9 regions; 2 chartered citiesParliamentary system
Governance structure
GDP- 84.35 USD BnGDP growth rate: 10%Area: 1.1 million square kilometers
Economy
Population: ~105 Mn (2017), second most populous country in AfricaPopulation growth (annual %)- 2.5%Life expectancy- 65 years
Demographics
▪ Prime Minister: Dr Abiy Ahmed
▪ Head of Government
▪ President: Sehale-Work Zewde
▪ Head of State
Federal Democratic Republic of Ethiopia
General Information
41
Regional Comparison:
• Top 5 FDI Destinations in Africa
• Consistently in Top 5 list for past 3 years
Egypt
Ethiopia
Morocco
Congo
South Africa
Ethiopia
1st
2nd
3rd
4th
5th
Source: World Investment Report 2019
General Information
Ethiopia has undergone significant changes over the last year; opening up of the economy is currently underway
General Information
1 Targeted investment in priority areas
KEY GOVERNMENT STRATEGIES TO ATTAIN VISION
DEEP DIVE FOLLOWS
3
2
4
Development of world-class industrial parks fitted with sustainable infrastructure
Conducive enabling environment
Tailored incentives
The country has set the vision to become the leading manufacturing hub of Africa and a preferred destination for FDI by 2025
General Information
Textile and Apparel • Potential to develop a competitive cotton or textiles industry: potential for backward and forward linkage• 54 million trainable workforce with competitive wages, cheap electricity• Strategically located with easy access to international value chains with access to a state-of-the-art container port
(Djibouti)• Duty-free and quota free access to the European Union (EU) and U.S. markets through the African Growth and
Opportunity Act• Investment Opportunities
• Ginning, integrated textile mills, spinning, weaving and/or knitting, dyeing and printing,• Production of garments; the manufacturing of knitted and crocheted fabrics, carpets, and sportswear, among others
1 Strategic priority areas have been identified for FDI attraction and export promotion
General Information
45
General Information
Industrial Parks:
Catalyst to drive Ethiopia’s
industrialization agenda
15 parks are conceived and 7 are
Functional
2 Several plug-and-play Industrial Parks are being developed through out the country
General Information
Africa’s 1st park with zero
liquid discharge facility (ZLD)
2 Sustainability is integral element of the parks
General Information
Electric-powered Railwayto ease logistics Africa’s 1st electric-powered railway
Development of world-class industrial parks fitted with sustainable infrastructureMassive investment has also been made in infrastructure development in support of industry (1/3)
2
General Information
Ethiopian Airlines – Cargo hubLargest cargo network and terminal in Africa
Massive investment has also been made in infrastructure development in support of industry (2/3)
2
General Information
What We Can do Better..
50
General Information
Enabling Stakeholders …
51
MVO NEDERLAND
QUESTIONS&
ANSWERS
MVO NEDERLAND
CONTACT
Stijn van Geel, Solidaridad Europe [email protected]
Kalayu Gebru, Solidaridad Ethiopia [email protected]
Marjolein van Gendt, MVO Nederland [email protected]
Frans Tilstra, MVO Nederland [email protected]
Alexandra Perschau, CmiA [email protected]
Janine Dortmundt, DIEH [email protected]
