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Cablegate: Agoa Iii: Textile and Apparel Production

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS MAPUTO 000294

SIPDIS
DEPT FOR AF/EPS DKRZYDA; AF/S
USDOC FOR AHILLIGAS
DEPT PASS USTR FOR CHAMILTON AND WJACKSON
E.O. 12958: N/A
TAGS: ETRD KTEX EINV PREL MZ AGOA
SUBJECT: AGOA III: TEXTILE AND APPAREL PRODUCTION
CAPABILITIES IN MOZAMBIQUE

REF: A. STATE 026964
B. MAPUTO 00269
C. MAPUTO 01114

1. Overview: Mozambique's once thriving and highly
heterogeneous textile and garment industry experienced steady
and significant decline throughout the early 1990s. At its
peak, the industry was comprised of 45 facilities, including
19 textile and 26 garment factories, producing a wide range
of products. None of Mozambique's six existing textile
facilities are currently operating at more than minimal
capacity. A number of legal issues, including outstanding
severance pay for former employees, shareholder/ownership
disputes, limited capital, bureaucracy, and inflexible labor
laws are all challenges to revitalizing Mozambique's textile
industry. While garment exports under AGOA have been limited,
with only one garment company currently exporting under AGOA,
there is great growth potential and a major new investment is
scheduled to come on-line in the next year (Ref B). All
fabric used in garment operations is currently imported.
Despite the potential revitalization of several existing
textile operations, garment operations are likely to rely on
imported fabric in the near-term. As noted in Ref C, host
government officials and local industry representatives have
stressed the importance of extension of third-country
provisions beyond September 2004 if Mozambique is to take
advantage of AGOA.

2. Textile Production Facilities. Mozambique's six existing
textile production facilities are: Texlom, Riopele,
Texafrica, Textil de Mocuba, Texmoque, and Texmanta. Two of
the six facilities are currently being used or have been
targeted for use in other commercial activities.
Specifically, Texlom will be the site for a new garment
assembly operation; Texmanta is currently being used for a
shrimp processing project. Textil de Mocuba, once envisioned
as the largest textile mill in Africa, has never operated.
As noted above, none is currently operating at any
significant level. The remaining three facilities-- Riopele,
Texafrica, Texmoque-- could potentially be revitalized. All
facilities contain a variety of machinery that, depending on
current condition and product line, could potentially be used
if any of the facilities were to be revitalized.
A - Machinery/Technology: Spinning, circular knitting,
bleaching, carding, dyeing, combining, mercerizing, winding
and sewing thread machines, looms. Most machines date from
the late 1970s/early 1980s, though a number of looms were
also purchased in the early 1990s.
B- Products: Cotton yarn, sisal cords, folkloric and other
clothing fabrics, blankets.
C- Employment: During peak operations, the larger of the
three facilities together employed over 4,000 workers. A
number of outstanding labor issues remain at the facilities.
D- Inputs: Locally-produced cotton and imported (European)
polyester/viscose. The largest facility, Texafrica used
local cotton exclusively.

3. Apparel Production Facilities: Mauritian-owned Belita is
currently the only garment facility operating in Mozambique.
It exports to the United States (under AGOA), Europe and
South Africa. It currently employs approximately 500 workers.
All fabric is imported, principally from Mauritius. Its
product-line is comprised mostly of t-shirts. Two other
facilities have closed within the past two years. Together,
these facilities employed over 700 workers. As noted above, a
major new garment facility is expected to come on-line within
the next year. Machines are currently being sourced.

4. The target markets for finished products have
traditionally been discount stores (e.g., Target) in the
United States, South Africa and Europe.

5. USAID recently contracted a report on Mozambique's
textile/apparel facilities which includes an inventory of
machinery/technology at the facilities cited above. This
report is currently in draft form and will be completed
shortly.
LA LIME

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