ACTIF Presentation Rajeev Arora Executive Director African Cotton & Textile Industries Federation

1. ACTIF Presentation Rajeev Arora Executive Director African Cotton & Textile Industries Federation www.actifafrica.com / www.cottonafrica.com

2. INTRODUCING ACTIF A regional trade body formed by the cotton, textile and apparel value chain stakeholders in Eastern and Southern Africa in June 2005 The Vision: An integrated cotton, textile and apparel industry that effectively competes on the world market Mission: To develop and successfully deliver services that enhance our membership’s competitiveness in the world market

3. COTTON TRADEWORLD VS AFRICA Source ICAC June 2014

4. African Cotton Production • Million tons • Share of World Production • Production Source: ICAC June 2014

5. Supply & Use of Cotton Status in africa 000 Metric Tons Source: ICAC June 2014

6. AGOA OPPORTUNITY • Total imports of textile & apparel products by USA stood at US$ 101Bn (Source: OTEXA, 2012) • SSA enjoys Duty free Quota free access into US for Garment exports under AGOA • Total U.S. Apparel imports from Africa under AGOA US$ 864 Million (0.8%)(Source: ACT, 2012)

7. EXPORTS UNDER AGOA 2013 DATA Source: ACT Report 2014

8. EU OPPORTUNITY • Africa enjoys duty free Quota free access into EU for Textile products through the Economic Partnership Agreement (EPA) • Total imports of textile & apparel products by EU stood at US$ 234Bn. (2012) • Total EU textile and apparel imports from Africa stood at US$ 9.3 Bn (4%) Source: ITC calculations based on UN Comtrade

9. ROLE OF ACTIF • Foreign Direct Investments(FDI): ACTIF explores investment in the cotton textile & apparel value chain in Africa, including developing due diligence and match making for JV’s • B2B Linkages: ACTIF facilitates Business to Business linkages with member countries • Access to Information: ACTIF provides information access including reports and special studies for national policies and strategies • Market access: ACTIF actively develops linkages with member countries and regional economic communities (RECs) like EAC, COMESA, SADC

10. ROLE OF ACTIF • Policy & Advocacy: ACTIF is very active in advocacy activities in partnership with its members and partners to improve the policy environment across the region • COMESA CtC Strategy: ACTIF has been recognized as the private sector representative for the implementation of the COMESA Cotton to Clothing strategy. With support of our funding partners, ACTIF has developed an priority implementation plan from the strategy and is currently monitoring the implementation activities;

11. Highlights of key achievements • Extension of AGOA’s third country fabric provision to 2015 • In 2011 & 2012, ACTIF was instrumental in engaging with key stakeholders including in US trade representatives, Members of US congress and Senate, Diplomatic corps and civil society. ACTIF Chairman was also invited to speak at a congressional hearing on AGOA. The end result was extension of AGOA’s third country fabric provision to 2015, saving over 300,000 jobs that were at stake!

12. Highlights of key achievements • Favorable Rules of Origin for the CTA sector adopted under EAC-COMESA-SADC tripartite • ACTIF has been actively involved in representing the private sector views in the EAC-COMESA-SADC tripartite discussions. This has led to favorable provisions for the Cotton, textile and apparel sector being adopted into the final draft of the tripartite document. The document is currently going through the political process before the FTA can be launched.

13. Highlights of key achievements • Investment Development – PVH Investment Delegation to East Africa: At least twenty Textile & Apparel companies from 5 countries in Asia made a strategic visit to Ethiopia, Kenya and Uganda in April 2014 to explore investment opportunities. The mission was organized by Philippe Van Heusen (PVH) and Vanity Fair (VF) in partnership with African Cotton & Textile Industries Federation (ACTIF) working with its member associations in the 3 countries visited along with export and investment promotion agencies. Investment Visit to Uganda Investment Visit to Kenya

14. OTHER ACHIEVEMENTS • Trade Events • ACTIF has developed and also successfully partnered in developing trade events for the cotton textile & apparel sectors in Africa under Origin Africa (2011-2014) and Source Africa (2013 & 2014); • Information Dissemination • ACTIF has successfully developed a number of valuable reports • Capacity Building Seminars • ACTIF successfully organized Capacity building seminars for the CTA Industry in Africa under Source Africa events in 2013 and 2014 in Cape Town, South Africa

15. PROPSOED STRATEGIC INTERVENTIONS UNDER THE COMESA COTTON TO CLOTHING STRATEGY

16. Supply & Use of Cotton Status in africa 000 Metric Tons Source: Forecasts by Terry Townsend, ACTIF Consultant

17. WHY AFRICA?

18. Overview of global clothing industry Clothing export industry has grown from US$40 billion in 1980 to $422 billion in 2012, averaging 29% growth annually No major changes in main importing countries

19. World Clothing Import 1982 Source: WTO Source: WTO

20. World Clothing Import 2012 Source: WTO

21. Overview of global clothing industry • The major exporting countries have been playing musical chairs: • from quota countries to non-quota countries • after expiration of MFA in 2005; to cheapest countries • to countries with Free Trade Agreements (FTAs) or Generalised System of Preferences (GSPs)

22. World Clothing Export 1980 Source: WTO Source: WTO

23. World Clothing Export 2012 Source: WTO

24. Overview of global clothing industry Wage Trends in Major Clothing Exporting Countries Note: GDP/capita gives an indication of the standard of living Source: CIA Factbook / Wikipedia

25. Countries where they have: • Geographical advantage: Nearness to raw materials and markets • Trading advantage: Bi-lateral or multi-lateral Free Trade Agreement • Demographic advantage: Abundance of unemployed labour Where will be the next Apparel production Frontier?

26. Why Africa? • Africa has: • Geographical advantage: • Cotton production Mali, Burkina, Cote D’lvoire, Mozambique • Close to EU & US • Trading advantage: • Duty Free to EU • AGOA • Demographic advantage: • Abundance of unemployed labour

27. WHY AFRICA? • Healthy Growth Momentum • Robust growth over the past 10+ years • Economic Growth: • 4.2% (2012), projected to accelerate to 4.5% (2013), 5.2% (2014) • 5 out of the top 10 fastest growing economies in 2013are African countries, 4 out of 10 in 2012 (IMF) • Business Insider predicted 9 out of the 20 fastest growing economy in the next 40 years will be African countries.

28. WHY AFRICA? Healthy Growth Momentum (Cont’d) • Even resource-poor countries (Mozambique, Ethiopia) have grown, backed by mineral resource discoveries and buoyant commodity prices • Africa’s trade with emerging countries has gained in importance, e.g BRICS (Brazil, Russia, India, China, South Africa) • The US economy • Its gradual recovery is good news for garment exporters in Africa with increasing support from American buyers

29. WHY AFRICA? • Africa becoming a major consumer market • Total population of 1 Billion • More than 10 countries have GDP per capita exceeding $5,000 • More than 10 countries have millionaire growing at between 20% to 108% over the last 5 years • Clothing export to Africa grown from $3.5 Bn in 2003 to 10.1 Bn in 2012 • The Obama Administration and AGOA: • Anticipates a seamless renewal of AGOA beyond 2015 • AGOA enjoys strong bi-partisan support

30. LONG TERM FUNDAMENTALS – OPPORTUNITY FOR AFRICA • Increasing capita fiber consumption in emerging economies • Source: PCI-Fibres, The Fiber Year, ITMF • Asia is destined to put more focus on its domestic market in the coming years. Africa is therefore set to establish itself as the next sourcing destination Other reports show even higher trends for India

31. VALUE ADDITION OPPORTUNITIES • Increasing demand for high qulaity fabrics targeting AGOA & EU markets is a huge opportunity to invest in the Textile Industry; • Huge potential in the Cotton By Products Industry to enhance income to cotton farmers; • Increasing demand for African Fashion & Designs; • Increasing demand for hometextile & home decor from Africa;

32. Fibre 1 Kg 1.6 US$ 0.5 person Yarn 0.75 Kg 3.40 US$ 0.75 person Fabric 3.35Mtr 8.5 US$ 2.0 persons Garment 2 Trousers 15.50 US$ 4.0 persons Retail 2 Trousers 38.80 US$ Value Addition x 10 times which can create 9 million jobs if 100% value is added to current African lint CAPTURING VALUE ADDITION

33. AFRICA’S POTENTIAL Africa’s Land Mass depicting the continent’s potential

34. Africa’s Cotton, Textile & Machinery Trade Fair fiber  fabric  clothing  fashion  accessories  home  décor machinery 10th – 12th November 2014 HOTEL INTERCONTINENTAL Nairobi, Kenya Changing Perceptions, Building Synergy & Doing Business www.originafrica.org

35. Origin Africa 2014 event • Changing Perceptions, Building Synergies & Doing Business • The event will highlight the creativity and innovation of the African cotton, textile and clothing industries • Special focus on business, trade and investment – regional and international – capturing the spirit, style and innovation of modern Africa. • Components: • Trade Expo; Seminars; B2B Meetings; Designer Fashion Showcase • Target Participants: • Cotton, Fibre, Yarn & Textiles, Apparel & Fashion, Home Textiles & Décor, and Accessories sectors; Support Agencies; Investment Agencies; Export Agencies; Textile Machinery/Technology Suppliers; National Delegations; and Country Pavilions Investment Promotion;

36. Special features • Cotton Fibre Component • B2B activities will be organized between Ginners and Spinners to promote cotton Trade and value addition in Africa; • Home Textile & Home Décor Component: • A special Home Textile Component has been included to showcase key regional suppliers; • Factory Visits • Factory visits to be organized for investment delegations and sourcing agents; • Students Category • A Students Category has been included in the Trade Expo to showcase up coming talent;

37. B2B Meetings • This will be pre-arranged meetings to match African manufacturers with international and regional retailers, brands, wholesalers and agents. • An opportunity for African manufacturers to showcase African made textiles, apparel, footwear and services to European, American and African buyers.

38. conclusion Value Addition Opportunities exist across the entire value chain Thank you