1. Product Description: Fabrics are made from cotton, wool, silk or man-made yarns. Man-made or synthetic yarns are made from coal, wood, hydrocarbons and other chemicals, A few of the most common synthetic yarns are nylon, polyester and acrylic. These yarns are used to manufacture fabrics and knitwear. Fabrics made from synthetic yarns are popular among the rural population of our country. Fabrics made from such yarns are believed to have longer service life than cotton fabrics. They are also easy to wash and wear.
2. Rationale: The use of synthetic fabrics for various types of clothes jacket and trousers or shorts for the male, dresses for the female have become popular in the Amhara Region during the last twenty or so years. If one travels through the Region, it is possible to observe women, men and children mostly is rural areas wearing clothes made of synthetic fabrics. The traditional home spun and woven cotton fabrics from which women dresses were made have been largely replaced by factory made (mostly imported) synthetic fabrics. Men’s clothes made from cotton fabrics (produced at home) are replaced by clothes made from synthetic yarn. All this change in the choice of synthetic fabrics has taken place in the last twenty years. One major factor for the popularity of synthetic fabrics for clothing is that their price is cheaper than the price for cotton fabrics.
3. Market Potential: In the late 1980’s, the domestic production of cotton fabrics had reached about 110 million m2 per year. Probably due to stiff competition from imports because of liberalization of the country’s foreign trade, production of domestic fabrics had decreased starting in the early part of the 1990’s. For example average annual production of cotton fabrics in the country between 2000 and 2004 was 42.7 million m2. This was a dramatic decrease from the production of the late 1980’s. While there was a decrease in domestic production in fabrics, there was a big increase in imports which replaced domestic production.
Currently one can safely say that more than 80, percent of fabrics consumption in the country is met by importing various types of synthetic fabrics. Of the 19.2 million people living in the Amhara region, close to 17 million live in rural areas; and 69 percent or about 12 million of the rural people are above the age of 10. This group of people are the main consumers of synthetic fabrics. If we assume that one person consumes about 10 m2 of fabrics per year, total consumption (demand) of synthetic fabrics in the rural Amhara Region could be 120 million m2. This is the potential demand for synthetic fabrics in the Amhara Region. Even if the per capita consumption is reduced by half, the potential demand will be about 60 million m2. This demand is 12 times the annual capacity of Ethio-Japan Nylon Factory. In other words the demand for synthetic fabrics in the Amhara Region will absorb the production of a number of factories.
4. Source of Raw materials: The main raw materials are synthetic yarn or synthetic “cotton” and dyes. These will be imported.
5. Process and Technology: The main processing stages of producing synthetic fabrics is the preparation of the yarn, weaving and finishing. Within each major stage, there are a number of activities which are too many to mention at this stage. Plant and machinery include various types of spindles, looms and sets of finishing machines. In addition, other auxiliary machines will also be required.
6. Estimated Investment: For a plant which can produce about 10 million m2 of synthetic fabrics per year, the estimated investment will be
· Buildings 3000m2 at Birr 1500/m2……= Birr 4,500,000
· Plant and machinery ………………….= Birr 45,000,000
· Working capital ……………………… = Birr 350,000
Total …………….= Birr 52,000,000
7. Benefits: saves foreign exchange and regional financial resources, promotes self sufficiency and introduces new skills and technology.
8. Location: Bahir Dar, Combolcha