Cablegate: Drc: Textiles and Apparel Sector: Updated

VZCZCXRO0045
RR RUEHBZ RUEHDU RUEHGI RUEHJO RUEHMR RUEHRN
DE RUEHKI #1161 2701638
ZNR UUUUU ZZH
R 271638Z SEP 07
FM AMEMBASSY KINSHASA
TO RUEHC/SECSTATE WASHDC 6960
INFO RUEHXR/RWANDA COLLECTIVE
RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS KINSHASA 001161

SIPDIS

SIPDIS

DEPT FOR STATE/EEB/TPP/ABT (GCLEMENTS)
PASS TO COMMERCE/ITA/OTEXA (MDANDREA)
PASS TO USTR (CMILLER)

E.O. 12958: N/A
TAGS: ECON EIND ETRD CG
SUBJECT: DRC: TEXTILES AND APPAREL SECTOR: UPDATED
STATISTICS AND COMPETITIVENESS PROJECTION

REF: SECSTATE 114799

1. (U) Post submits the following in response to reftel's
request for updated statistics and projection of future
competitiveness.

Data
----

2. (U) The following are 2006 statistics:
- Total industrial production in USD: 110,250,315

- Total textile and apparel production in USD: 5,426,111

- Textile/apparel share of DRC's imports and exports:
Imports/Exports: Unavailable/0 percent

- Textile/apparel export to the US: 0

- Total manufacturing employment: Figure unavailable, but
Post estimates between 5,000 to 10,000.

- Total textile and apparel employment: 1,645

ADDITIONAL INFORMATION
----------------------

3. (U) DRC textile producers do not receive lower prices due
to international competition. DRC manufacturers receive
fewer orders as a result of competition from
Chinese-manufactured textiles. Congo-Tex, a joint venture
between the CHA Group (China) and Texaf (Belgium), closed
their doors and went out of business in June 2007.

4. (U) The GDRC has not implemented any safeguards or other
measures to reduce the growth of imports of Chinese textiles.
Post's contacts indicate that a substantial quantity of
Chinese-manufactured textiles illegally enters the DRC
duty-free. (Note: Low-quality imports also come from Dubai.
End note.)

5. (U) Increased global competition has reduced domestic
production by pushing Congo-Tex out of business, and forced
companies to lay off employees and cut the number of work
shifts. However, international competition has not adversely
affected union organizing. Unions are already quite weak, due
in part to the high rate of unemployment, underemployment and
reliance on the informal economy.

6. (SBU) The GDRC and private industry jointly approved a
two-year strategic plan in 2005 to increase the DRC's
competitiveness in the textile/apparel sector. The GDRC
agreed to enforce import licensing requirements, protect
intellectual property rights, provide tax exonerations on
imported raw materials (e.g. cotton comes from Nigeria and
Benin), reduce electricity and rail transport rates, and
negotiate with other countries to obtain bilateral customs
and duties exonerations, such as AGOA benefits. However,
according to the Congolese Chamber of Commerce (FEC), the
GDRC has not fulfilled these commitments. Neither the GDRC
nor the private sector has developed niche markets, except
for manufacturing military uniforms at Congo-Tex, the
Kinshasa textile firm.

7. (SBU) DRC's AGOA eligibility does not include textile and
apparel benefits. Further, AGOA eligibility would not alone
suffice to make the DRC competitive in this area; additional
minimum conditions include an improved infrastructure
(particularly roads and electricity) customs and tax
incentives, organized promotion of the sector and support for
production of raw inputs, such as cotton.
BROCK

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