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The Textile Magazine
SEPTEMBER 2011
UNIDO-Gherzi
study on cotton
yarn spinning in African countries
global scenario
On the occasion of the Pan-Af-
rican Cotton Meeting (PACM) or-
ganized by UNCTAD in Cotonou,
UNIDO and Gherzi Textil Organi-
sation AG have officially released
the study entitled “Feasibility study
for a cotton yarn spinning mill in
11 sub-Saharan African countries”.
Cotton plays a significant role in
the economy of sub-Saharan Af-
rica. However, hardly 15 per cent
of the cotton grown in the region
is processed locally. The bulk of it
is exported as a basic commodity.
Spinning of cotton yarn repre-
sents the first stage in the indus-
trial transformation of raw cotton
into an intermediate textile prod-
uct (yarn) and results in significant
value addition. World trade in cot-
ton yarn is estimated at $8 billion;
as such the market represents an
attractive option for cotton-pro-
ducing African countries. From a
development perspective, promot-
ing the spinning industry helps in-
tegrate the African cotton economy
into global value chains.
UNIDO has embarked on vari-
ous initiatives to support the African
cotton industry. Amongst them, this
study carried out with Gherzi Textil
Organisation AG, a leading con-
sultancy specialized in the textile
industry based in Zürich, with the
aim of building productive capaci-
ties in the cotton/textile/garment
value chain.
The study includes a techno-
economic feasibility study for set-
ting up a cotton yarn spinning mill
based on the factor costs prevail-
ing 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 coun-
tries meet the investment criteria.
A strategic research finding is that
Government support in the form of
policies and incentives is essential
for attracting foreign direct invest-
ment to the capital intensive spin-
ning industry, especially in Africa. It
is, as a matter of fact, Government
support that drove the expansion of
cotton value chains in Asia.
The study is to serve as a template
based on a set of given premises
and parameters. However, any
decisions taken by a par-
ticular investor should be
sensitive to, and take into
account several factors,
among them: cotton and
yarn prices, exchange
rates, interest rates, type
of technology and equip-
ment, product mix, loca-
tion, market access and
Government
support
measures.
In addition, the study
provides an opportunity
for policy makers in Af-
rican countries to learn
from the experiences
gained by cotton and
textile-producing Asian
countries in strengthening
the value chain.
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