Interest and investment in African textile and apparel manufacturing is growing.
In its latest move, Turkish denim manufacturer Taypa Teksil, supplier to brands including Levi’s and Calvin Klein, is investing $800 million in what it says will be the largest textile facility in Algeria, according to multiple news reports out of Turkey and North Africa.
Tyapa, headquartered in Istanbul, and with facilities in Turkey, Egypt and Algeria, said the action is a bid to double production capacity in North Africa and diversify its product offering. Taypa is one of the largest producers of denim in Turkey, exporting 80 percent of its production to around 50 countries. It is also setting up a ready-to-wear facility in the Balkans, which it hopes to commission by the end of 2018, reports noted.
The company hopes to begin construction of its facility in Algeria in 2019. The project will be undertaken in three phases, with completion expected by 2025. The site, in the Relizane region of Algeria, will be a fully integrated facility producing a variety of yarns, fabrics and finished product. Annual production capacity is expected to be 30 million pieces, half of which will be for the Algerian market, and the remainder for export to the European Union and U.S.
Taypa’s has already invested $20 million in ready-to-wear production in Egypt, where its annual production capacity is about 6 million units.
The company is said to also planning be planning to open an office in New York at the Turkish Trade Center, where it will conduct the marketing for its Egypt operations. An office is also planned for London, which will host marketing, as well as departments such as showrooms and a design unit.
Rand Merchant Bank’s recent “Where to Invest in Africa 2018” report’s Investment Attractiveness Index saw Algeria fall to 13th place from 10th on the list of countries with the most desirable investment environment.
Egypt displaced South Africa as the top destination largely due to the North African country’s superior economic activity score. Algerian neighbors Morocco and Tunisia, at third and nine on the list, both show an improved business sand political climate ripe for investment, the report noted.
[Read more about investing in Africa: Egypt Tops Where to Invest in Africa Study, With Ethiopia and Rwanda on the Rise]
Ethiopia, a country dogged by sociopolitical instability but still a favorite of many foreign investors, including U.S. and Chinese apparel and textile firms, displaced Ghana to take fourth spot, mostly thanks to its rapid economic growth, having moved past Kenya as the largest economy in East Africa.
According to a study by the African Centre for Economic Transformation, “Promoting Manufacturing in Africa,” Ethiopia’s manufacturing industry has been growing thanks to cheap hydropower, government commitment to a strategy of transformation from an agriculture-led economy to industrial, and massive growth in infrastructure development and foreign direct investment.
Ethiopia’s Hawassa eco-industrial park has attracted 18 global apparel and textile companies. Construction of the park cost more than $250 million and was built in less than a year. Covering an area of 1.3 million square meters, the addition of the park is expected to bring Ethiopia’s revenue derived from textiles and garments to $1 billion over the long term from the current $150 million annually, according to the Ethiopian Investment Commission.