Epic Apparel PLC is located in Hawassa Industrial Park, EAPLC is subsidiary of Epic Group head quartered in Hong Kong. Epic Group has been in the business of Apparel Trading and Manufacturing for the past 35 years, with production facilities located in Bangladesh, Vietnam, Jordan and Ethiopia.
Group employs 30,000 workforces across the globe and protects the livelihood of 200,000 members of families directly and indirectly employed with us.
At Ethiopia we employ 2,500 direct and indirect workforce at the Hawassa manufacturing facility and from a livelihood perspective takes care of 8000 members from the workforce families
We have been very proactive in extending food, education, financial stability & medical care to all our workforce and their families.
We are working with first generation workforce in Ethiopia. Each of the factories in the park has been teachers of stitching, quality, technical and other ancillary jobs to the workforce. While a huge amount of money has been invested into transfer of knowledge and training, it has not yielded the expected results due to heavy absenteeism and attrition which is still prevalent in the Industrial Park. Each month we lose about 7% of our workforce and each month we recruit and train 10% workforce.
Epic has yearly turnover of over twenty million USD and a projected growth on sales year on year of 15% from the current operations and as we expand into multiple Sheds, the YOY growth would stand at over 20%.
We started with a very big dream in Ethiopia, of providing employment, of providing financial stability, of providing livelihood for the families, of supporting Industrialization in the country, of increasing the forex income for Ethiopia and growing Apparel and Textile business place in Ethiopia and converting Ethiopia to be a world class manufacturing destination for foreign buyers and placing Ethiopia in the international market place as a dominant supply chain location.
AGOA was the only sole incentive that attracted us and other manufactures to move to Ethiopia. We are a 100% export company to the US and supply to the biggest retailers in the US. 95% of the exports from the Hawassa Industrial Park are to the US – this standalone data is factual enough to showcase how dependent are we on supplies to US.
We are all aware USA is the single largest importer of Apparel products in the world and holds a huge market share when it comes to consumption of production world over. For survival of any industry – there is a need for volume of business, economies of scale as we call it. Hence buyers from US are the most important when it comes to scale of business.
AGOA privilege allows buyer in the US market to import goods at nil duty, and this enhances the attractiveness of Ethiopia compared to any other region of supply chain. If AGOA is discontinued, it would mean buyers will end up paying a higher price and would result in supplies being diverted to other countries and complete closure to business in Ethiopia.
EU , Asia – a lot of us are hoping Ethiopia will still survive with business from these continents – but that’s not true – none of the buyers in these regions work on large volumes and orders would generally be of lower quantities and leading up to longer learning curves and will only add up to productivity challenges.
Productivity levels have been a concern here in Ethiopia, especially as the workforce learnt stitching in the last 4 to 5 years and have started improving on efficiencies and quality levels now and are getting into a consistent performance for the past few months to say the least.
Epic has invested significantly in the infrastructure at HIP, and has incurred heavy losses from operation over the last 5 years. Investors are absorbing these loses, as a learning curve for the business continuance and growth in this country and when we are hoping and seeing light at the end of the tunnel – AGOA privilege pull off has come as an obstacle, which is generated not only fear but sleepless nights for us as business owners and for the workforce , as it is a direct impact on their livelihood
If AGOA privilege is removed, all investors will be forced to re-locate to a country with a low key political instability and with better incentives to support business. All investors in the park are fully booked with orders for the upcoming 12 months , what would happen to the orders , if buyers back out or pull out from paying duties , these will only add to additional burden to the already loss making business in Ethiopia.
Out of the total exports to the US which is approx. 525M USD, Textile and Apparel exports tune to 270 USD which is more than 50% of the total exports and all these are 100% under AGOA – this fact showcases how significant AGOA existence is for Ethiopia to build and sustain this industry.
Ethiopia is growing at an annual GDP rate of 10% – leaving it amongst the most dominant African country for investment and returns. These investments provide significant opportunities for supply chains that create and sustain responsible employment. US by pulling out of AGOA is losing out its only/single biggest trade cum economic relation with Ethiopia.
USTR could also review the trade facts and figures – Ethiopia is the one of the very few trade partners with whom US enjoys a positive balance of trade. US exports to Ethiopia are significant leading to surplus trade balance of 450 plus Million US in 2019.
On the other hand – there is a lot that can be done from The Government of Ethiopia to continue in the privilege of AGOA. We all are deeply saddened by the ongoing violence and unrest in northern region leaving millions displaced. The humanitarian crisis must be resolved, food and aid must be administered, and ongoing violence needs to be converted to peace talks from all sides. This is need of the hour, by imposing peace , not only will GoE lead from the front as an example of model Government to the world , but at the same time protect the livelihood of millions in the Northern region & millions employed by the industry dependent on AGOA.
In the same lines – our message to the US Government is to not use AGOA as a tool to combat the ongoing crisis in the Northern Region. On one hand when we propel the GoE to resolve human rights violation in the northern region , would pulling out AGOA , not be an equally strong act of displacing at least 2 million plus workforce directly or indirectly employed by the sectors depended on AGOA.
We must not forget – both Ethiopia and USA together through investments and through incentives like AGOA – provided a living for the workforce in the country, provided financial stability to the people of this country. We as investors are just a medium who facilitated investments, facilitated livelihood to the people. Are we going to withdraw from our responsibilities of sustainable households we created through jobs and investments? there must be a deeper sense of accountability from GoE, GoUSA and USTR in mutual cohesion to help the workforce of Ethiopia & Investors who made heavy investments in building this industry.
We hope and are confident, voices will be heard and there will be arrangements from GoE to end the war at Tigray, from GoUSA and USTR to not take any adverse measures on AGOA and we as investors will strive to engage in making significant difference in the lives of people – employment, health, medical care, financial stability.
This is need of the hour!
We urge the Government of Ethiopia and Government of USA to work together to resolve and protect the livelihood of workforce dependent on AGOA.
(BY: Rohit Nair, Vice President of Epic Apparel PLC)