SCM Garments, the exports arm of the SCM Group of Companies from Tirupur, is setting up a 500-machine garment unit in Ethiopia.
The company had opened the facility a couple of weeks ago with 50 machines.
“The worker training and production lines are ready. We will operationalise the plant in phases. By mid 2019, we want to have all the 500 machines functioning,” said M. Ashok, chief marketing officer of SCM Garments.
According to Supporting Indian Trade And Investment for Africa (SITA), a project of the International Trade Centre, about 30 garment and apparel units have set up shop in Ethiopia in the last couple of years. This includes companies from India, Bangladesh, China, Indonesia and the United Kingdom.
The companies from south India include Jay Jay Textiles, Best Corporation and SCM Garments.
Exports from Ethiopia have duty free access to the U.S. and Europe and there is manpower availability. Hence, SCM decided to invest in Ethiopia.
However, there are a few challenges too, such as poor infrastructure development and the need to train unskilled workers,” said Mr. Ashok. Raja M. Shanmugam, president of Tirupur Exporters’ Association, said garments units from the region were investing in countries such as Ethiopia considering the upfront advantages.