H&M Looks to Source Clothing From Ethiopia

[Liu Kang]

SOURCE : http://online.wsj.com/article/SB10001424127887324823804579014792348431448.html (subscribed content)

Hennes & Mauritz AB (H&M), a Swedish clothing retail company is looking to buy as many as one million garments a month from Ethiopia, according to H&M spokeswoman Camilla Emilsson-Falk.

“As a growing global company we have to look at how we guarantee that we have the capacity to deliver products to all our stores where we have a rapid pace of expansion. We are doing that by increasing production in our existing production areas and also by looking at new ones,” she said.

The company that has 2,900 stores worldwide relies heavily on Bangladesh for clothes production, and a move to Africa would expand its sourcing footprint. The spokeswoman also said that the fashion company has placed test orders with Ethiopian suppliers and that large-scale production could begin as early as September.

The Swedish retailer might source as many as one million garments a month from Ethiopia. H&M is looking for alternatives to areas such as southern China, where costs are rising. Latest data shows that costs per unit manufactured in Ethiopia were more than half the cost in China as of 2011, according to the company. On the other hand it is stated that Ethiopia’s cost per unit is expected to exceed China’s by 2019.
Still, the retail company sees advantages in getting a more diverse footprint, and is looking to source closer to the markets it sells in because of a need for reduced shipping costs and lead times.
Emilsson-Falk has said that the retailer’s test orders in Ethiopia aren’t related to media reports earlier this year that the company was looking for store space in South Africa, and there are no concrete plans for a store in South Africa. She also reiterated the company’s long-term commitment to Bangladesh and said the retailer is growing and increasing sourcing in all the markets where it is active.

H&M says low production costs aren’t the only thing it looks at as it makes deals with new suppliers. The company says it strives to work with suppliers over the long term that can offer the capacity and quality that H&M needs and that can meet its conduct rules.

“Ethiopia not only gives infrastructure support but financial support,” said Rajeev Arora, executive director of the African Cotton and Textiles Industries Federation. He cited put interest rates, cheap land and labor, and tax breaks from the government as key incentives leading to extraordinary rates of foreign investment over the past five years.

H&M established its office in Ethiopia’s capital of Addis Ababa about a year ago, and has been buying clothing from a number of manufacturers.

Thoughts ?

 

[2Quik4UHoes]

My nikkaz, get that money....

Nah all jokes I think this is great as a means to open up a new market for the country. I don't expect it to be perfect at all, but I hope the government does right by the people and the land. But yeah, this is great. Ethiopia grows lots of cotton so makes sense. If we can get a bigger textile industry in place we in business.

 

[Vandelay]

Im for it, just hope they dont have them working in shyt conditions like Bangladesh. Listened to a story on NPR 2 months ago about HM and Bangladesh, and the conditions were not favorable if i recall correctly.

It would be nice if Ethiopia or Africa in general could become a textile and clothing hub, they have every means to become one, so why the f not...

 

[Mr. Somebody]

I guess those demonic below minimum wage earnings are getting to expensive so its on to the next one.

 

[DEAD7]

Great news for Ethiopia.




Capitalism, contributing to create jobs and developing countries since day one.

 

[thekingsmen]

Sweat-Shops in Ethiopia will cause huge problems.

 

[Serious]

Sweat-Shops in Ethiopia will cause huge problems.

*waits for allegations of sexual harassment, excessive unpaid overtime, child labor, etc..*

 

[Slaimon Khan Shah]

Praise be to God.

 

[Liu Kang]

Im for it, just hope they dont have them working in shyt conditions like Bangladesh. Listened to a story on NPR 2 months ago about HM and Bangladesh, and the conditions were not favorable if i recall correctly. It would be nice if Ethiopia or Africa in general could become a textile and clothing hub, they have every means to become one, so why the f not...

That's also what I had in mind making this thread.
On one hand we all know that those type of factories in this part of the globe go with poor working conditions, low wages, and basically exploitation. But on the other hand, every 1st world countries have began that way...
If we look at China's example when it was only the world's factory in the 90's and is (or will soon be) the 1st country in the world, we can only hope for african countries to develop that way to at least try to be a good competition to Western countries.
Obviously, China had its size and population to help which doesn't have Ethiopia and for example Bangladesh and other world's factory countries which still poor after years of exploitation but I believed it still can be done with proper political and social means.

That's why I'm mixed about this.
Because we know for sure that H&M didn't mean to improve no country's economy but it's own profit before anything else by moving there. But if both (Ethiopia's economy and H&M profits) can increase, well, I'm good with that at last.

 

[DEAD7]

Poor working conditions are better than no working conditions in third world countries. The idea that people leave a good situation to work in a poor one is silly.


People work in sweatshops because it is better than the alternatives if any.

 

[Liu Kang]

Poor working conditions are better than no working conditions in third world countries. The idea that people leave a good situation to work in a poor one is silly.

People work in sweatshops because it is better than the alternatives if any.

We think that way because we assume that the Western way is the best way.
Obviously, in this world, working is better than not working, I can't disagree with that (except when one is on unemployement ) but why does working must prevail over health and dignity ? That's what concerns me.

We had idealized working in a way that people are blamed if they refuse to work in piss-poor conditions simply because there's work available. And the poorer one's condition is, the less he is able to refuse. And that's that's what mutlinational corporations thrive on : overall poverty. Because in those conditions, refusing to work is quasi criminal, therefore one takes the job even if one's health or dignity is stepped on.
That's sad because working well should be mandatory but as long as we think that working or not is a life or death situation, we won't have any leverage on exploiting corporations. I just hope Ethiopia has good unions for the workers' voice to be heard and their dignity respected.

 

[DEAD7]

but why does working must prevail over health and dignity ? That's what concerns me.

Survival prevails over everything...

 

[Liu Kang]

Survival prevails over everything...

I agree unfortunately.
It's sad that a majority of us, humans (a specie who is supposed to be so evolved), is more concerned about surviving than living well. We're no different from animals if survival is the main goal of our lives.