Identifier
Created
Classification
Origin
06ABIDJAN1133
2006-10-06 17:27:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Abidjan
Cable title:  

COTE D'IVOIRE: TEXTILE AND APPAREL PRODUCTION

Tags:  ECON ETRD KTEX IV 
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VZCZCXRO2829
RR RUEHMA RUEHPA
DE RUEHAB #1133/01 2791727
ZNR UUUUU ZZH
R 061727Z OCT 06
FM AMEMBASSY ABIDJAN
TO RUEHC/SECSTATE WASHDC 2018
RUCPDOC/DEPT OF COMMERCE WASHDC
INFO RUEHZK/ECOWAS COLLECTIVE
UNCLAS SECTION 01 OF 02 ABIDJAN 001133 

SIPDIS

SENSITIVE
SIPDIS

STATE FOR EB/TPP/ABT THOMAS LERSTEN, USTR FOR FLORIE LISER
(AF),ABIOLA HEYLINGER (TEXTILES),TIM STRATFORD (CHINA),
COMMERCE FOR ITA/OTEXA MARIA D' ANDREA

E.O. 12958: N/A
TAGS: ECON ETRD KTEX IV
SUBJECT: COTE D'IVOIRE: TEXTILE AND APPAREL PRODUCTION

REF: A) STATE 138090

ABIDJAN 00001133 001.2 OF 002


UNCLAS SECTION 01 OF 02 ABIDJAN 001133

SIPDIS

SENSITIVE
SIPDIS

STATE FOR EB/TPP/ABT THOMAS LERSTEN, USTR FOR FLORIE LISER
(AF),ABIOLA HEYLINGER (TEXTILES),TIM STRATFORD (CHINA),
COMMERCE FOR ITA/OTEXA MARIA D' ANDREA

E.O. 12958: N/A
TAGS: ECON ETRD KTEX IV
SUBJECT: COTE D'IVOIRE: TEXTILE AND APPAREL PRODUCTION

REF: A) STATE 138090

ABIDJAN 00001133 001.2 OF 002



1. (U) Per REF A request, Post provides the following
information on Cote d'Ivoire's textile and apparel
production sector.


2. (U) The National Statistical Institute's (INS) Division
of National Accounts (INSAE) provided the following
statistics on total industrial production and total textile
and apparel production:

-- 2004 Textile and Apparel Production: $61.1 million (2005
unavailable)
-- 2005 Industrial Production: $1.0 billion
-- 2005 Total Production of Goods (i.e. non-services):
$2.74bn


3. (U) EconChief and EconOff met with an executive of the
Ivorian Employers' Association (UGECI, the association of
major industries),the Director General of Uniwax, the only
remaining producer of fabric in Cote d'Ivoire, and Cote
d'Ivoire's delegate to the WTO to discuss the state of the
textiles and apparel industry in Cote d'Ivoire. Eager to
discuss the impact of the ongoing political crisis as well as
that of the influx of Chinese-made cloth and apparel, the
group provided the following statistics:


-- Textile and apparel exports are minimal. Uniwax exports
approximately $1m annually in high-end African print fabrics,
mainly to Italy and Spain. Exports of apparel are de
minimis; Ivorian apparel production itself is at the
semi-artisanal level, with no large or medium-scale industry.


-- Textile and apparel imports are substantial. While
authorities and industry were unable to provide statistics on
overall levels, imports of both, overwhelmingly from Asia and
particularly from China, dominate the market.

-- Exports of both textiles and apparel to the U.S. are at
near de minimis levels. Wrangler has a small facility here
employing 50 workers (down from a high of 750) stitching
apparel using cloth imported from Asia, but overall volume
and value is very low. Textile and apparel exports to the
U.S. are a very small fraction of the $1m in approximate
aggregate exports.

-- Total manufacturing employment in both textiles and
apparel stands today at approximately 4000, vs. some 10,000
in 2002, prior to the commencement of civil conflict and the
division of the country. Figures for total manufacturing
employment were unavailable.


4. (U) Uniwax's DG and UGECI's representative stated that,
while perhaps 20% of the decline in Cote d'Ivoire's textile
and apparel manufacturing sector can be attributed to the
impact of political problems, a full 80% can be ascribed to
the impact of Asian, especially Chinese, competition. Of the
three textile mills operating in Cote d'Ivoire as of
mid-2002, one is closed, one is operating at 15-20% capacity,
and the third is operating at 80%. Remaining textile
production feeds primarily into Uniwax's mill.


5. (U) Cote d'Ivoire is the 4th largest cotton producer in
Africa, but only a tiny percentage of its raw cotton is used
as a raw material in Ivorian industry. Uniwax uses 6,000
tons of raw cotton annually, down from 20,000 tons pre-2002.
This stands in contrast to overall cotton production of some
100,000 tons annually.


6. (SBU) Chinese competition is widely understood to be the
chief cause of local industry's decline. Interlocutors cited
advantages Chinese manufacturers have that local production
cannot match, such as state-supported corporate structures,
subsidized energy costs, low-to nonexistent worker benefits,
and labor costs as low as 1/4 of those paid in Cote d'Ivoire.
They also asserted that Chinese apparel frequently enters
Cote d'Ivoire fraudulently, via underdeclared shipment values
and distributed through informal, untaxed networks, escaping
the 18% VAT and 20% customs fees. Chinese apparel imports
are so cost-competitive that they are significantly cutting
into the sales of second-hand clothing, long the biggest
source of clothing for the mass market.

7) (U) Remaining cloth production, increasingly at the
high-end of the market, is projected to stay competitive.

ABIDJAN 00001133 002.2 OF 002


Its high quality and frequent design changes are difficult
for copycat Asian fabric makers to follow.

8) (U) Interlocutors do not see even the possible resumption
of AGOA (suspended in since January 1, 2005) as sufficient to
revive the fortunes of Ivorian textile and apparel
manufacturers in the face of Asian competition. Absent a
"miracle," even slashing developed world cotton subsidies,
according to interlocutors, would not spur growth in the
textile/apparel industrial sector.
Valle