The Lesotho Textile and Garment Industry Opportunities
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1 The Lesotho Textile and Garment Industry Opportunities
2 Contents 1 Overview of Lesotho 2 Profile of the Textile and Garment Industry 3 Investment Opportunities 4 Incentives and Investment Services
3 LESOTHO
4 Lesotho Quick Facts Population: 2 million Capital: Maseru Area: 30,335 sq. km Language: Sesotho & English Monetary Unit: Loti, at par with SA Rand Transportation: Road, Air, Rail Landscape: Mountainous Political System: Constitutional Monarchy
5 Economic Indicators GDP (Purchasing power parity) GDP (at official exchange rate) (2013 est.) $4.265 billion $2.161 billion (2014 est.) GDP GDP - Real growth rate 3.81% (2014 est.) $1,200 GDP Per Capita (2014 est.)
6 Profile of the Textile and Garment Industry Woven Garment Manufacturers Woven Fabric Producers One vertically integrated spinweave mill (Formosa est. 2004; US$80m investment) spins African cotton; imports polyester yarns - Weaves capacity 1.6m yards per month 80% used in own garment factories 11 woven garment producers (employment ) mainly denim jeans / chinos / industrial work wear; but also constructed ladies trousers & jackets (est. >25m units per annum) In 2010 estimates these firms consumed 65 million m2 of fabrics (mainly denim; but also work wear (65/35 and 80/20 poly-cottons))
7 Profile of the Textile and Garment Industry Knit Fabric Producers none, most fabrics from China; some from SA Formosa has ability to spin yarns required 2 fabric knitting firms currently engaged in talks with Government to establish plants (each 500t per month). Firms will use some output themselves but some knit fabrics will be sold in market. knit plants will give Lesotho lead time advantages Knit Garment Manufacturers 28 knit garment factories (employ ) mainly men's/boys/women s/girls shirts & blouses. (est. >80m units per annum) large volumes made from man-made fibre fabrics (fabrics from Asia) - significant volumes of yoga gear in 2011 est mt fabrics used
8 Sector Investment Opportunities High Value Garments Men and womens clothes, jeans, chinos, workwear Accessories: zips, labels, buttons, embroidery, hangers Automotive Components/interiors Car seat covers, rugs, bus curtains Fabric Recycling for home textiles ICT Services Packaging Materials
9 Value proposition- Why Lesotho Successful Track record Long established apparel manufacturing industry servicing famous brands : Levis, Calvin Klein, Ralph Lauren, Timberland In 2014 Lesotho firms exported: US$290.3m worth of garments to the US US$101.7m worth of garments to South Africa Competitive Cost Structures sector minimum monthly wage is M1 187 (US$85) water charges M12.21 per kl (US$0.88); sewage M8.92 per kl (US$0.64) - reliable Electricity industrial HV demand charge is M per kw (US$16.17); and energy M (US$0.02) - reliable
10 Value proposition- Why Lesotho Exceptional Market Access US AGOA (with 3rd country fabrics) EU EPA (with 3rd country fabrics) SACU market that includes the growing South African Market a range of developed countries under GSP (Japan / Canada / Australia / New Zealand) Transport Logistics Rail, Road and Air While landlocked Lesotho is close to some of Africa s most modern ports which are connected via multiple weekly direct sailings to the EU and the US (e.g. Durban)
11 Value proposition- Why Lesotho Tax Incentives Corporate manufacturing tax 10% Zero withholding tax on dividends distributed by manufacturing firms to local and foreign shareholders Training costs are allowable at 125% for tax purposes Labour Young, abundant, predominantly English speaking labour force with a tradition of manual dexterity Labour stability
12 Investment Services Provision of serviced industrial and commercial sites Provision of industrial buildings at competitive rentals Assistance with company registration Assistance with procurement of all permits and licenses to operate in Lesotho Assistance with industrial relations Financial assistance to investors on a selective basis
13 THANK YOU By Marina Mapitso Bizabani For More Information visit
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