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Cablegate: Rwanda 2007 Submission for Textile and Apparel Production

VZCZCXYZ0006
RR RUEHWEB

DE RUEHLGB #0902 2780650
ZNR UUUUU ZZH
R 050650Z OCT 07
FM AMEMBASSY KIGALI
TO SECSTATE WASHDC 4753

UNCLAS KIGALI 000902

SIPDIS

SIPDIS

DEPARTMENT FOR AF/C
DEPARTMENT FOR EEB/TPP/ABT: GARY CLEMENTS
DEPARTMENT PASS COMMERCE/ITT/OTEXA: MARIA D'ANDREA
DEPARTMENT PASS USTR: CAROYL MILLER

E.O. 12958: N/A
TAGS: ECON ETRD KTEX RW
SUBJECT: RWANDA 2007 SUBMISSION FOR TEXTILE AND APPAREL PRODUCTION

REF: STATE 114799

1. Post provides the following responses to reftel request for
information on textile and apparel production in Rwanda.

2. Requested Information

-- Total industrial production in USD:
2006: USD 363 million.
2007 estimate: not available.

-- Total textiles and apparel production in USD:
2006: USD 6.5 million.
2007 estimate: USD 6.7 million.

-- Textile/apparel share of host country imports and exports:
2006 share of imports: approximately 8.2% of total imports (USD 35.9
million / USD 440.0 million).
2007 estimated share of imports: no estimate available for
textile/apparel imports. Total imports estimated at USD 532.8
million.
2006 share of exports: approximately 4.5% of total exports (USD 6.5
million / 142.7 million USD).
2007 estimated share of exports: approximately 4.6% of total exports
(USD 6.7 million / 146.2 million USD).

-- Exports in textiles and apparel to the U.S.:
2006: no exports recorded.
2007 estimate: 1 million USD.

-- Total manufacturing employment:
2006: estimated at 30,000.
2007: no estimate available (but total probably not significantly
different).

-- Total textiles and total apparel employment:
2006: 1,200. The Ministry of Labor estimates that several hundred
more are employed in the informal apparel sector. (Note: Rwanda has
a single textile factory, UTEXRWA. It has yet to export under the
African Growth and Opportunity Act (AGOA), but does export to
Burundi and the eastern part of the Democratic Republic of Congo.
End Note).
2007 estimate: 1,500.

3. Optional/If Applicable Information

-- Prices and international competition: Imported textiles and
apparel from China has had a negative impact on UTEXRWA. Cheap
apparel from China has also hurt importers of used clothing from the
U.S., as Chinese imports are usually less expensive than the used
clothing from the U.S.

-- U.S. and European Union restrictions on certain Chinese exports
of textiles and apparel: these have not affected export prospects.

-- Safeguards: Rwanda has not implemented safeguards or other
measures to reduce growth of imports of Chinese textile and apparel
products.

-- Dislocated workers: Rwanda does not have policies or programs in
place to deal with dislocated workers in the sector resulting from
increased competition.

-- Increased global competition/labor costs. According to UTEXRWA
officials, global competition, chiefly Chinese imports, does keep
wages from rising, but has not produced loss of employment or
reduction of wages.

-- Increased global competition/competitiveness: the Rwandan
government (GOR) is addressing energy and transportation costs in an
attempt to support the industrial sectors. The GOR has also enacted
various tax and customs exemptions to facilitate investment in key
industrial sectors.


-- AGOA/prospects for effective competition: AGOA has not yet had a
significant impact on the textile industry in Rwanda. Rwanda's high
energy and transportation costs make it extremely difficult for
local manufacturers to be competitive exporting textiles and
apparel. The U.S. Mission in Rwanda has identified high-end
apparels such as silk and specialty products such as protective
clothing and medical textiles as potentials and will continue to
work with UTEXWA and the GOR to develop this industry.


ARIETTI

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