VIENNA, 28 June 2011 – In an effort to further support the African cotton industry, the United Nations Industrial Development Organization (UNIDO) and Gherzi Textil Organisation AG, a consultancy specialized in the textile industry, have released a study that looks at ways to build productive capacities in the cotton, textile and garment value chain.
The study will also help policymakers in Africa learn from the experiences gained by cotton and textile-producing Asian countries in strengthening the value chain.
The publication, “Feasibility study for a cotton yarn spinning mill in 11 sub-Saharan African countries”, includes a techno-economic feasibility study for setting up a cotton yarn spinning mill based on the factor costs prevailing in 11 sub-Saharan African countries.
“A comparative analysis of economic returns has revealed that because energy is scarce and expensive, only a few African countries meet the investment criteria. A strategic research finding was that Government support in the form of policies and incentives is essential for attracting foreign direct investment to the capital-intensive spinning industry, especially in Africa. It is, as a matter of fact, Government support that drove the expansion of cotton value chains in Asia,” said Philipp Scholtes, Director of UNIDO’s Agribusiness Development Branch.
Cotton plays a significant role in the economy of sub-Saharan Africa, yet hardly 15 per cent of the cotton grown in the region is processed locally - the bulk of it is exported as a basic commodity. The spinning of cotton yarn represents the first stage in the industrial transformation of raw cotton into an intermediate textile product (yarn), and results in significant value addition.
World trade in cotton yarn is estimated at eight billion US dollars, so the market represents an attractive option for cotton-producing African countries. From a development perspective, promoting the spinning industry helps integrate the African cotton economy into global value chains.
The release of the study was linked to the Pan-African Cotton Meeting (PACM) organized by UNCTAD in Cotonou from 27 to 29 June.
For further information on the study, please contact:
Director, UNIDO Agribusiness Development Branch