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Cheap Chinese imports impede growth of textile sector
09
Jul '08
The textile sector in Uganda has for some time been struggling due to the absence of a formal Government policy for the industry. However, last year, the country unveiled a new industrial policy, warranting the development of a cotton and textile sector for Uganda within the broader frame work of the present one.

Mr Richard Mubiru, Director Corporate Affairs of Southern Range Nyanza Limited, told Fibre2fashion, “Due to the missing policy regime necessary for optimal capacity utilization and competitiveness, the hitherto blossoming sector has, as few as two functional textile mills, following the closure of several others like MULCO, ATM, Lira Spinning Mill, Rayon Textiles. The key problem over time has been the illicit trade orchestrated by largely Chinese traders who took advantage of porous boarders to wreck havoc.”

Southern Range Nyanza Limited is a local textile manufacturer largely producing bed sheets, dress materials, local kitenge prints, shorts, security shirts and pants, blouses, skirts, Heney shirts, school and army uniforms and caps.

Presently the firm has sh2 billion worth of goods lying unsold due to cheap imports. High Cost of production have resulted in prices of dumped textiles becoming lower compared to the locally produced goods. It is therefore quite evident that if importation of inferior textile materials persists, the firm would have to close down due to lack of business.

However, players in the sector have been quite innovative to mitigate the challenges of illicit trade by venturing into production of organic cotton value added goods targeting especially the export markets since Uganda is the 7th Global Producer of Organic Cotton.

Across the value chain (from cotton growing to garments production), the sector presently supports the livelihood of 2.5 million people, representing close to 10 percent of Uganda's population. This could even double with optimal capacity utilization and increase in value addition across the value chain, which is why a High Level Task Force has been established to fast track the formation of Textile Policy within a delay of no more than three months.

Uganda is presently driving the agenda of sensitive categorization of textiles within the East African Community so that the sector can have measures beyond the present tariffs available to mitigate the excesses injury inflicted upon the sector. In this, imported textiles would be subjected to payment of duties based on weight in addition to having in place minimum dutiable values below which declarations are not permissible. This approach has yielded results for sugar and rice and should therefore deliver the same for cotton and textile sector in East Africa.

Fibre2fashion News Desk - India


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