Kanoria African Textiles Plc, a subsidiary of India's Kanoria Chemicals & Industries in preparation to start denim fabric manufacturing in May 2015 at its plant in Bishoftu (Debre Zeit) in Oromia has began yarn production last week.

The company obtained on investment license two years ago and built its factory on a 155,000sqm plot in Bishoftu with installed capacity of 10 million metres of fabric per year. The factory will employ 600 people,and produce both yarn and denim for textile and garment factories. It is the factory established with a capital of 35 million dollars, said Jay Soyanter, Marketing Vice President of the company.

There is a big potential for the investment of garment and the company want to meet the denim fabric demand of the country, which were mainly imported from Pakistan, Bangladesh, Turkey and Sri Lanka, said Soyanter.

The factory will sell its products in Ethiopia as well as export to African, Asian and South American markets. Kanoria will use cotton procured from the local market and imported from Indian and Pakistan.

The company is looking forward to the commencement of operation over the next four to five months of the five textile factories, among those are A.N.F Garment Factory, established by Pakistani owners and Atraco Textile Factory, both located at the new Bole Lemi textile zone in Addis Abeba.

In Ethiopia, there are 130 medium and large-scale textile and garment factories, of which 37 are owned by foreign investors while the remaining are owned by domestic investors.

Ethiopia's textile and garment sector has been a poor performer over the past years, with one of the major problems being the poor supply of cotton, and others being poor planning and management.

In 2013/14 Ethiopia made 111.3 million Br from the export of textiles and garment which showed an improvement of 12.5pc over the previous year, although it was just 31.8pc of the target of 350 million dollars.

According to Bantihun Gesese, Ethiopian Textile Industry Development Institute Corporate communication Director, the 14 million dollars earned from export during the month of January 2015 was a result of the increased attention from the government.

The new denim factory is beneficial in terms of transferring technology advancements and knowledge to the country, saving foreign currency, meeting the high demand for denim fabric and creating employment opportunities.