PACEID Attracts Investment in the Cotton Sector from China

The Presidential Advisory Committee on Exports and Industrial Development (PACEID) trade and export delegation visiting China over the weekend held an inspection tour of one of China’s largest integrated textile plants and asked the owners to channel part of their operation in Uganda under incentives that will allow them to supply the Africa market. The Kamhing Textile Company owned by Mr. Tai Chin Wen with his family and listed on the Hong Kong stock exchange has annual revenues of USD600m and processes 100million kilograms of cotton from lint, yarn, and fabric including knitting, printing, dying, and sells to western retail outlets such as Macy’s, Target, Walmart in the US and high fashion sports brands such as Nike and Adidas.

“We do not know much about Uganda and Africa and how to invest there, especially in a delicate product like cotton fabrics. We are not sure about water because we use a lot of steam, the levels of electricity stability, and the overall safety and security of the continent. If you can guarantee these things, we would consider a visit to explore the possibility of a partnership with the Government to source cotton and produce fabrics for the market there” said Mr. Tai Chin. Kamhing Textile Factory has product outlets on over 300 acres handling an integrated textile production, supplying Africa, Korea, Singapore, Vietnam, and many parts of Asia. “We can invest in phases if there are certain guarantees,” said Mr. Dai, General Manager of the company. The company which employs 5000 people has production facilities in Enping and Guangzhou regions in the southwest of China, with headquarters in Hong Kong.

Odrek Rwabwogo who led the nine-person delegation including Ambassador Kiema Kilonzo, Brenda Opus, Allan Mugisha, Joshua Akandwanaho, Enock Isingoma, and others, assured the company saying that “Uganda is at a critical stage of production increases of all agricultural commodities, a young and highly educated labor force and electricity provision at only USD5cents for manufactures. Next year, when we begin production of oil, we anticipate the beginning of a thriving petrol chemical industry that will provide us with dyes for printing for the cotton industry. If you invest today, you are an early bird and President Museveni will offer you all fiscal and market protection to give the country scale in this sector”.

Uganda’s per capita consumption of fabric per annum is 6 meters and total consumption is about 276million square meters, spending substantial amounts of foreign exchange importing used clothing. Both Fine Spinners and Nytil cotton factories in Kampala do not make a significant difference in domestic cloth consumption for imports, giving space for more large-scale investments in the sector to drive productivity at farm and firm levels.

PACEID aims to attract investment in the value chains of the products the country has set its sights on raising USD 6Bn in external earnings in the next five years.