Textination Newsline

The Fraunhofer Institute for Biomedical Engineering IBMT, with its long-term expertise in nanotoxicity and nanosafety testing, contributes to a new EC project for water saving solutions for textile industry. This industry uses a vast amount of water for different steps in the textile dyeing process. It also produces a lot of wastewater, which contains a range of chemicals and dyes.

Breakthrough innovations are needed in energy intensive industries to recycle water and create closed loops in industrial processes. 20% of global industrial water pollution comes from textile manufacturing. To reduce the high amount of freshwater used in textile industry, the EC-funded Waste2Fresh project will develop a closed-loop process for textile manufacturing factories in which wastewater is collected, recycled and used again. Novel and innovative catalytic degradation approaches with highly selective separation and extraction techniques will be developed, based on nanotechnology. According to the European Commission, such “closed loops“ would significantly reduce the use of fresh water and improve water availability in the relevant EU water catchment areas, as outlined in the Water Framework Directive.

Closed loop recycling system for wastewater from textile manufacturers
Waste2Fresh meets the above challenges and industry needs by developing and demonstrating (to TRL 7) a closed loop recycling system for wastewater from textile manufacturing factories; to counteract freshwater resource scarcities and water pollution challenges exacerbated by energy intensive industries which are major users of fresh water (for e.g., processing, washing, heating, cooling).

The Waste2Fresh technology is developed to reduce current use of freshwater resources and considerably increases the recovery of water, energy and other resources (organics, salts and heavy metals). The result is a 30% increase in resource and water efficiency compared to the state-of-the-art. The system will ultimately lead to considerable environmental improvements and accordingly reduce the EC and global environmental footprint.

Fraunhofer IBMT expertise in human-toxicity and -safety testing
The Fraunhofer Institute for Biomedical Engineering IBMT will be primarily responsible for performing nanotoxicity and nanosafety testing during the whole technology process (from development to demonstration), ensuring that the developed system and processes meet relevant safety regulations. The Fraunhofer IBMT collaborates with all consortium partners developing and using to develop approaches for ensuring that the developed nanomaterial-based components meet relevant health and safety standards during their use.

For the hazard assessment of the developed nanomaterials, the Fraunhofer IBMT will perform a set of in vitro toxicity studies using commercially available human cell lines. The results of this toxicity studies will be the basis for the development of relevant safety procedures for handling and using the developed recycling technology.

Project funding: H2020-EU.2.1.5.3. - Sustainable, resource-efficient and low-carbon technologies in energy-intensive process industries

Duration: 12/2020- 11/2023

Coordinator:
KONYA TEKNIK UNIVERSITESI, Turkey

Project partners:
CENTRE FOR PROCESS INNOVATION LIMITED LBG, United Kingdom
ERAK GIYIM SANAYI VE TICARET ANONIM SIRKETI, Turkey
FRAUNHOFER GESELLSCHAFT ZUR FOERDERUNG DER ANGEWANDTEN FORSCHUNG E.V., Fraunhofer-Institut für Biomedizinische Technik IBMT, Germany
INNOVATION IN RESEARCH & ENGINEERING SOLUTIONS, Belgium
INSTYTUT MOLEKULYARNOI BIOLOGII I GENETYKY NAN UKRAINY, Ukraine
L'UREDERRA, FUNDACION PARA EL DESARROLLO TECNOLOGICO Y SOCIAL, Spain
NANOFIQUE LIMITED, United Kingdom
NANOGENTECH LTD, United Kingdom
PCI MEMBRANES SPOLKA Z OGRANICZONA ODPOWIEDZIALNOSCIA, Poland
STIFTELSE CSDI WATERTECH, Norway
THE OPEN UNIVERSITY, United Kingdom
ULUDAG CEVRE TEKNOLOJILERI ARGE MERKEZI SANAYI VE TICARET LIMITED SIRKETI, Turkey
UNIVERSIDAD INDUSTRIAL DE SANTANDER, Colombia
UNIVERSITA DEGLI STUDI DI TRENTO, Italy
VEREALA GMBH, Switzerland
VSI SOCIALINES INOVACIJOS SVARESNEI APLINKAI, Lithiani

• International companies have confidence in government work
• Chinese set the tone

Nairobi (GTAI) - Foreign companies are flowing into Ethiopia and investing in the textile, clothing and leather sectors. Ethiopia is also interesting for companies that assembling simple technical devices. The country does not look good in various international indices, but that does not have to be a contradiction. For some sectors Ethiopia is highly interesting and hope for improvement is always to be hoped for.

Ethiopia is one of the poorest countries in the world and one of many typical developing countries, as there are many on the African continent. The big difference is: Ethiopia is controlled by a regime that is not satisfied with what it has achieved, but is more ambitious: to become a leading, if not the leading, industrialized nation in sub-Saharan Africa.

Model China

Despite its geographical location in Africa, large parts of the country's historical and cultural development are strongly influenced from the Middle East. The big role models are therefore not more successful states in Africa but are coming as the United Arab Emirates and China from the East. Thirty years ago, the economic march that Ethiopia is undergoing today, began there: cheap labor, interesting natural resources, enough free land and rivers for energy and irrigation.

The country is thus attractive for labor-intensive industries, especially the textile, clothing and leather industry. A worker in an Ethiopian sweatshop earns an average of USD 909 a year, based on a survey by the US Center for Global Development, compared to USD 835 in Bangladesh, USD 1,776 in Tanzania, and USD 2,118 in Kenya. Another advantage appreciated by employers: In the African context Ethiopian women are considered to be well-educated and less willing to strike.

Special zones of industrial oases

Another location advantage are the industrial zones, which are mostly built by Chinese companies: fencing, strict access controls, no-hole roads, guaranteed electricity and water supply, proper waste and garbage disposal, workers' housing in the area or nearby, shops, banks, medical care. From a European point of view, it may look like exploitation and "big brother", but from an Ethiopian point of view jobs are created, families are fed and foreign exchange is earned.

In July 2016, the Hawassa Industrial Park was officially opened, the largest in sub-Saharan Africa. From here, textiles and clothing are to be exported. By 2018, the park will employ 60,000 workers and generate USD 1 billion in exports. As early as 2030, Ethiopia wants to earn USD 30 billion in this segment. Even if one should not take the last number too seriously, the ambitions are clear and unambiguous.

Another industrial park was inaugurated in July 2017 in the city of Kombolcha. Meanwhile, a whole range of other parks are in various stages of realization, focusing on apparel, textiles, pharmaceuticals and medical equipment, as well as the agro-industry. According to the Ethiopian Government, there is no shortage of interested investors, primarily from China, India, Turkey, the US, Hong Kong and South Korea.

Cheap electricity soon abound

While some of the industrial parks still have to rely on standby generators and the connection to roads and railways leaves much to be desired, long-term remedies are in sight: several large hydropower plants are under construction nationwide, especially the Grand Ethiopian-Renaissance Dam project, which will start up the first generators in the current financial year (July 8th 2017 to July 7th 2018). Upon final completion, the capacity should reach 6,450 megawatts. It would then be Africa's largest power plant - and one of the cheapest electricity suppliers.

There are notable successes in road construction also: since August 2016, Ethiopia has got a first fully commissioned 85-kilometer three-lane highway from the capital Addis Ababa to Adama. Further sections are under construction. And also with the railway there is something to celebrate with a new, 756 kilometers long and continuously electrified route between the outskirts of Addis Ababa and the container port in neighboring Djibouti.

Foreign exchange shortage a big hurdle

This positive development cannot hide the fact that large parts of the country are not yet connected to the electricity net, that the road network is inadequate and the railway line is only a small start. Moreover, the bureaucracy is inflated and inefficient and lacks a functioning constitutional state. Currently, an acute lack of foreign exchange hinders imports and profit transfers, as the ambitious infrastructure projects absorb every available dollar in the country.

Investors, however, are speculating on tomorrow: because the country is on the right track and wants to maintain its course. A steady influx of foreign direct investment shows that international companies have sufficient confidence and want to be among the first. In addition next to the low wages, they are interested above all in the underdeveloped and untapped consumer market of 105 million people. For the South African Rand Merchant Bank, Ethiopia is therefore the fourth most attractive investment destination in Africa after Egypt, South Africa and Morocco (Where to Invest in Africa 2018).

Poor placement in international rankings

Even if Ethiopia is predicted to get a bright future, current negative assessments may not be ignored: in the Global Competitiveness Index 2017 - 2018 of the World Economic Forum, Ethiopia ranks 108th (out of 137). In the Index of the Economic Freedom of the World Heritage Foundation Ethiopia belongs to the group of largely unfree countries in 2017 ranked 142 (out of 180). And in the Doing Business Ranking of the World Bank (2017), Ethiopia is in a poor position with 159 (out of 190). By contrast, in 2016 in the Transparency International's Corruption Perceptions Index Ethiopia ranked 108 (out of 175), making it a lighthouse in an otherwise corrupt region (last place: Somalia 176, South Sudan 175, Sudan 170, Eritrea 164, Uganda 151, Kenya 145, Djibouti 123).

In the Fragile States Index 2017 of the Fund for Peace, Ethiopia ranks 15th, ranking among the most fragile states in the world (lowest rank 1 = South Sudan, best rank 178 = Finland). Ethiopia also scored poorly on press freedom and the rule of law: ranked 150th out of 178 in the Press Freedom Index in 2017 and 107th in the Rule of Law Index in 2016 (out of 113).

1) Prognosis
2) Estimation
Source: Economist Intelligence Unit

• FTA attracts Manufacturers
• Proportion of local added Value should rise

Hong Kong (gtai) - Vietnam is one of the main production sites of the clothing industry. Already in recent years the country had attracted buyers from around the world. In 2014 textiles and clothing shared 22% of the total merchandise exports. According to the state owned VINATX in 2015 Vietnam was the fourth largest apparel exporter in the world. The through the FTA with the EU and the Pacific neighbors expected growth requires investment in the supply industry.

In 2015 the Vietnamese garment exports amounted to about USD 27 billion. Estimates of the Vietnam National Textile and Garment Group (Vinatex) show they will increase by 8% in 2016. Nearly USD 30 billion of sector products would then be exported and assure Vietnam a ranking among the four largest exporting countries. The world market however is stagnating. The sector contributes nearly 10% to the industrial added value of the country, 2.5 million people are employed.

As the most important export market remains the United States. According to Vinatex the export to the US rose by 13% in 2015. The group dominates the textile production in the country, including companies like Garment 10, Phong Phu Textile and Garment Corporation, Viet Tien Garment and Hoa Tho Textile and Garment. Vinatex itself exported products worth of USD 3.5 billion, representing an increase of 10%.

TPP promises benefits

The sector has high hopes on the in February 2016 signed FTA Trans-Pacific Partnership (TPP), in which next to the USA, Japan and Vietnam and eleven Pacific Room states arranged added tariff reductions and improved market access. If the ratification process in all countries will be successful, the agreement would enter into force in February 2018. Analysts show that Vietnam would become one of the main winners, among others due to the lowest labor cost in comparison of all other involved countries. The agreement therefore is welcomed by the majority of the population.

Pre-products have to be imported

According to experts the competitiveness of Vietnam will be increased especially in the area of textiles and clothing. About 70% of the textile exports will be delivered to TPP member countries. Despite the annual growth rates of 15 to 20% the value adding in the country remained low. Imports of raw materials and accessories are high and totaled to USD 16.5 billion in 2015. 90% of the 5,028 textile factories in Vietnam (end of 2013) are apparel manufacturers, that mean sewing operations. By contrast there are just four cotton-processing and two synthetic fibers producing companies.   

Source: Vietnam Textile and Apparel Association (Vitas)

The sector is facing a challenge: TPP offers the free imports only if 55% of the value is provided in the member states. For the textile sector this is called the "Yarn Forward Rule", that means everything following the yarn. In Vietnam the proportion of the added value currently stands at 25%.

The text of the agreement is online available: (http://www.tpp.mfat.govt.nz/text). Chapter 4 deals with the textile and clothing sector and contains important annexes to the rules of origin. TPP is expected to attract investments into the country, as the value supply chain is incomplete: yarns and fabrics are mostly imported from East Asian countries.

Value adding rules require investment

Also the free trade agreement between the EU and Vietnam, agreed on August 4th 2015, should push the exchange of commodities. The share of the EU clothing imports from Vietnam is only 3%. Thus the country ranks as the sixth supplier. In the United States, Japan and South Korea Vietnam, however, is the second largest clothing supplier.

Following ratification of TPP an abolishment of 99% of all tariffs would follow.  Textiles from Vietnam would then be duty-free within a maximum period of seven years. For that TPP
defines clear rules of origin: (http://trade.ec.europa.eu/doclib/press/index.cfm?id=1437).

If investments would flow into the country and strengthen the supply chain, the value of clothing exports from Vietnam could be doubled until 2020 - so bold estimates.   Then the annual production of yarns should reach 2 million tons, the amount of fabrics 2 billion square meters and that of clothing 6 billion pieces. Following the Vietnam Textile and Apparel Association (VITAS)  the export value then should be between USD 45 to 50 billion. This requires new textile machinery. So far, mainly Chinese products were in demand, but also for German suppliers the opportunities emerge.

Source: Vitas

However, many sector representatives in Vietnam see TPP also critical, because by the agreement large new market participants could intensify competition. The small and medium companies are hardly competitive due to their outdated technology, lack of capital and low know-how. They demand government aid in the form of tax breaks and subsidies for land. The Bank for Investment and Development of Vietnam has already provided USD 2 billion for the support of the industry for the next five years.    

Investment in regional centers

Large investments are happening already now: The TAL Group from Hong Kong, one of the largest owner-managed apparel producers, has invested USD 600 million in factories in the Dai An Industry Zone in Hai Duong Province, especially for yarn dyeing and finishing. Haputex Development, which is also from Hong Kong, has built with up to USD 120 million in the province of Binh Duong on a twelve hectare site a Weaving mill which should go into operation 2016.  There also the South Korean company Kyungbang is building a spinning mill for USD 40 million. The Texhong Textile and Garment Group is building with USD 300 million a yarn factory in Quang Ninh. And in Nam Dinh the Yulun Jiangsu Textile Group, a state-owned company from China, is building with USD 68 million a factory for the manufacturing and dyeing of yarn.

Investments are mainly attracted by the regions Ninh Binh, Hue, Binh Duong and Ham Dinh, as well as the cost favorable  Mekong Delta. New target regions are at the borders with Laos and Cambodia, such as the area Tay Nguyen. As the largest Vietnamese group also Vinatex invests in new capacities and announces in convincing interviews to reach by 2020 a local added value part of 65% in final finished products.

Source: Vietnam Textile and Apparel Association (VITAS)

Contact address:
Vietnam Textile and Apparel Association (VITAS)
2nd Floor, 32 Trang Tien Str., Hoan Kiem District, Hanoi, Vietnam
Tel.: 0084 4/39 36 41 34; Fax: -39 34 98 42
Email: info@vietnamtextile.org.vn; Internet: http://www.vietnamtextile.org.vn