Will The Textile Industry Sew The Torn Economy Of Madagascar?

The Realities Of The Textile Industry Facing Covid-19

Textile and garment is one of the industries that have been performing well over the years in Madagascar.  Back in 2008, Madagascar was the second largest exporter of textile and garment products to the US from the Sub Saharan African region, as it benefited from AGOA (African Growth Opportunity Act). The island was a source for brands such as GAP, J.Crew, Levi’s, American Polo, Jordache, Puma, for example.

The labor skills and costs, along with the legal framework (Law on Free Zones and Free Companies, #2007-037 of January 14, 2008) are the key elements to this sector’s  attractiveness in Madagascar. Operators in the sector who have units located in different countries admit that it takes 3 weeks to train the Malagasy workers to reach the level needed to be fully operational on the job, compared to 3 months for workers in other countries. A company running two factories, one in Madagascar and one in Mauritius, employing 1,000 people in each factory, saves USD1 million in its yearly labor cost in Madagascar. Some brands insist that “Made in Madagascar” appear clearly on their products because it has become their selling argument.

AGOA Expulsion

Following the coup in 2009, Madagascar was expelled from the list of the AGOA eligible countries. The industry suffered as the companies who relied on the American market have seen their orders cancelled, some of them had to shift their productions to other countries while some just closed their businesses, leading to tens of thousands of job losses. In 2016, Madagascar’s return into the AGOA’s list again brought a fresh air into the industry. Productions and exports to the US picked up quickly. As reported by www.trade.gov,  as of December 2019, “Madagascar ranks first amongst Sub-Saharan African countries in textile exports to the EU and third to the United States”.   According to the Economic Development Board of Madagascar (EDBM), there are 551 textile companies employing a total of 165,000 people in Madagascar. This sector is the largest employer in the island and accounts for 30% (estimated at USD 512 million in 2019) of the country’s total exports.

Everything went well, preparing for the expected end of AGOA in 2025. Then came COVID, disrupting the supplies, slowing down the productions,  resulting in an estimated loss of 40 to 50% of jobs.

Haytex International

MadaLiving reached out to operators to gather their views and perspectives concerning the situation. Andy Randria, Founder and CEO of Haytex International is one of the very rare young Malagasy to operate in the textile and garment industry, a Malagasy who creates jobs for the Malagasy and defends the “Made in Madagascar” all around the world. Here are his views of the situation and how he copes with it.

“Covid-19 had added itself to the already complex equation of the textile sector: an overall decline in the demand for new products, a trend amplified by the increase in the second hand due to a more ecological and responsible vision of the final consumer. Another direct consequence of Covid-19: the disturbance in the international air transportation had practically doubled the air freight cost. During the first wave, we at Haytex have not seen any cancellation in the orders, we have focused on small quantities unlike the big production units which encountered bigger problems. All new projects were put on hold though we just finished an intensive commercial prospection with new clients in the USA… 2021 will not be an easy year, the succession of pandemic waves in Europe and the USA will slow down the demand and our products are 100% for export. We are already seeing a decrease in the volume ordered by our traditional clients. Our clients are in the wait-and-see and the expectative.

Our calendar for the production is rushed. Therefore, we have adopted a flexibility strategy by reducing the minimum of orders, refining our work towards specific orders to be the most attractive to potential clients. And we continue our commercial prospection campaigns. The objective for the year is to maintain, “survive” the pandemic and save jobs.”

Andy Randria,

Haytex International

The EDBM registered 14 new companies joining the sector in 2020, but like many industries in Madagascar, it relies heavily on the international markets that have been significantly slowed down by the pandemic. The Malagasy textile sector has to wait until the market wakes up and starts sewing what Covid-19 tore off and takes its part in this business which is expected to exceed the trillion US dollars in 2022.

Ester.414

This season [Ester.414’s summer collection] was kinda hard for us. The textile industry was really impacted economically speaking. In the beginning of all of this, we were closed several times during the year. With closed borders, it’s really difficult for us to ship products for example in France, it really takes a long time, like two months, depending on the flights. But since everything has been slowed down, we had the time to build new projects, like the website for example[e-commerce shop] or the setting up for new strategies. We need to deal with the Covid and this uncertain life. I think the world and the way of consuming is also changing. The textile industry needs to slow down, like the process, and the collection releases, and so on. We need to change our way of consuming and producing.

Emilie Andriamahefa

Founder of Ester.414