From Debre Birhan to North America:
A competitive advantage

Global supply chains in the textile industry

Ibercotton S.A. was founded in Spain in 1986 and now has subsidiaries in Cambodia, Bulgaria, and Ethiopia. In Ethiopia, this is EK Ethiopia Knitted Manufacturing PLC, which currently employs 400 people. The Ethiopian subsidiary was founded in 2019 and produces jumpers, sweatshirts, jackets and other garments for men, women and children. It is one of Ethiopia’s major manufacturers of textiles. Until now, most of its products have been destined for export to countries in the European Union. But Ibercotton is now planning to broaden its customer base and enter new markets. The additional garments will come from the existing plant in Ethiopia.

Additional machines and well-trained staff

To make this possible, Ibercotton needs to significantly expand the production capacities at the Debre Birhan site and invest in machines and in the training of additional employees. With the support of the Facility Investing for Employment, the textile factory at Debre Birhan is going to be expanded to 11,000 square metres. As part of the measures supported by the Facility, new machines for knitting, sewing, and finishing will be purchased. Yarns and other raw materials are imported, among others from the subsidiary in Cambodia.

The qualification of the newly hired employees will be key to the expansion of production. For this purpose, Ibercotton will form a partnership with the vocational training centre of Debre Birhan. It is there that future employees will be trained for their jobs by taking part in a dual qualification programme.

Higher production and up to 1,600 new jobs

Within two years, the new machines should enable the company to increase production from 0.5 to 2.5 million garments per year. Ibercotton forecasts that the expansion of production will lead to the creation of 1,600 additional jobs at the Debre Birhan site. About three quarters of these jobs are expected to be filled by women. In addition, the planned training measures should generally contribute to strengthening the Ethiopian textile industry and lead to the establishment of further companies.

Ibercotton plans investments in machinery and training totalling EUR 6.41 million euros. The Facility Investing for Employment grants a subsidy of 1.5 million euros (23%).

The Facility Investing for Employment of KfW Development Bank is part of the Special Initiative "Decent Work for a Just Transition" of the German Federal Ministry for Economic Cooperation and Development (BMZ). With its support, it wants to remove barriers that prevent the creation of new and better jobs in the private sector.