Indian Firm to Open Biggest Yarn Factory

Addis Fortune (Addis Ababa)

Workineh Zewdie

30 May 2011

Anand Sharma , Indian Minister of Commerce and Industry (MoCI), greets Mekonen Manyazwal, minister of Industry (MoI), at the Indian Trade Fair that was held at Millennium Hall on May 20, 2011.

CLC Industries is preparing to establish the biggest yarn factory in the country on 50ht of land in Kombolcha Industrial Zone, Amhara Regional State, which it obtained from the government lease free.

CLC Industries, a subsidiary of Spintex Group, a textile company that was established in 1974 in India, plans to complete the first phase of the factory in the next fiscal year, according to Yewelsew Lalelet, director of corporate communications of the Textile Industry Development Institute (TIDI).

The factory, to be constructed in four phases, is 376km from Addis Abeba, and will have the capacity to produce a total of 180tn of yarn daily (200,000 spools) upon becoming fully operational, Yewelsew claimed. Upon the completion of each phase, the factory is expected to produce 45tn of yarn (equivalent to 50,000 spools) daily, according to the director.

“Almeda Textile Factory and Ayka Addis Textile & Investment Group are the largest yarn producers in the country with a combined daily production capacity that does not exceed 50tn,” Yewelsew told Fortune.

After Adama Spinning Factory and Edget Yarn & Sewing Thread Manufacturing,CLC Industries is to be the third yarn factory that would specialise in producing only yarn. Other factories in the sector produce yarn, garments, and apparel.

CLC Industries, which received its investment licence from the Ethiopian Investment Agency (EIA) in 2009, floated an international tender for the procurement of the machineries it plans to install in the factory, according to Markos Terfa, liaison officer for CLC.

The company was also awarded a combined 25,000ht of land in Amhara and Benishangul-Gumuz regional states on a 50-year lease to establish a cotton plantation. Since the construction of the yarn factory has not yet been completed, this year’s cotton yield would be sold to local textile factories.

Once the factory is completed, the total yield would be used as raw material for the factory, Markos explained.

Currently, cotton production is 21,000th, but the government plans to increase this to 98,000th at the end of the five years of the GTP.

CLC is to lease each hectare at a price of 221.95 Br for the year, amounting to 5.5 million Br, according to the lease agreement that was signed between CLC and the Ministry of Agriculture and Rural Development (MoARD) in 2009.

The select seeds to be planted on the plantation were imported by the company duty-free, according to Markos.

“We plan to start ploughing the land in the coming week,” he told Fortune.

“The company plans to invest a total of 100 million dollars in the two projects that are expected to create more than 1,000 permanent and part-time jobs,” Yewelsew said.

Ethiopia is the first country in Africa in which Spintex, which is engaged in the textile sectors in several countries including India, the Czech Republic, Turkey, Malaysia, and Uzbekistan, is investing in cotton and yarn.

The yarn will be used for exports only, according to Markos.

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