Encouraged by the duty benefits enjoyed by certain African nations to the US markets, leading Bangladeshi garment manufacturer and exporter, DBL Group is planning to set up a US $ 100 million integrated textile and garment factory in the Tigray region of Ethiopia, claims media reports.
“The new factory will go into production by February next year. We expect to employ 3,500 workers. Of them, 150 will be employed as executives – all from Bangladesh,” reportedly informed a senior DBL official to a Bangladesh daily, adding, “We are going to Ethiopia as this African nation enjoys zero-duty benefits from the United States on exports. The benefits will continue for a long time as Ethiopia is a member of the Least Developed Countries (LDCs).”
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For construction work of the project— reportedly a debt-funded venture of DBL (and not a joint venture) – the Bangladeshi conglomerate has reportedly obtained US $ 15 million in loans from the Swedish Government’s development fund Swedfund at an interest rate of 6 per cent and another US $ 55 million from the Ethiopian Development Bank at nearly 7 per cent.
“We aim to export to the US and European, African and Middle Eastern countries from Ethiopia,” the DBL official maintained to the daily newspaper, adding, “DBL is a Platinum-rated apparel supplier to Swedish retail giant H&M and our main target is to supply to them.”
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It may be mentioned here that Bangladesh, despite being an LDC, does not enjoy duty benefit from the USA as the American Government suspended its Generalised System of Preferences (GSP) in June 2013. On the other hand, US Government renewed the African Growth and Opportunity Act (AGOA) last year for the African LDCs for the next 10 years to provide zero duty benefits on exports.
