PACEID woos Chinese investors to tap into Uganda's cotton

The PACEID trade and export delegation visiting China has  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 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, fabric including knitting, printing, dying and sales to western retail outlets such as Macys, 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 of water because we use a lot of steam, the levels of electricity stability and overall safety and security of the continent. If you can guarantee these things, we would consider a visit to explore the possibility of partnership with Government to source cotton and produce fabrics for the market there” said Mr. Tai Chin.

Kamhing textile factory has products 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 south west 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 labour 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 put a significant difference in domestic cloth consumption for imports, giving space for more large-scale investments in the sector to drive productivity at a farm and firm levels.

PACEID aims at attracting investment in the value chains of the products the country has set its sights to raise USD6bn in external earnings in the next five years.