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Viewing cable 06DAKAR1970, SUPPORT FOR CONTINUANCE OF AGOA THIRD COUNTRY

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Reference ID Created Released Classification Origin
06DAKAR1970 2006-08-17 08:37 2011-08-24 16:30 UNCLASSIFIED Embassy Dakar
VZCZCXRO2955
PP RUEHMA RUEHPA
DE RUEHDK #1970/01 2290837
ZNR UUUUU ZZH
P 170837Z AUG 06
FM AMEMBASSY DAKAR
TO RUEHC/SECSTATE WASHDC PRIORITY 6037
INFO RUCPDOC/USDOC WASHDC
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
RUEHZK/ECOWAS COLLECTIVE
UNCLAS SECTION 01 OF 02 DAKAR 001970 
 
SIPDIS 
 
C O R R E C T E D  C O P Y (CORR PLA ADDEE) 
 
SIPDIS 
 
STATE FOR AF/EPS - HASTINGS, AF/W AND EB/TPP/MTA 
STATE PLS PASS TO USTR - JEFFREY FERRAH 
AID/W FOR AFR/WA AND AFR/SD 
USDOC FOR 4510/OA/PMICHELINI/AROBINSON-MORGAN/KBOYD 
USDOC FOR 3131/CS/ANESA/OIO/DHARRIS/GLITMAN/MSTAUNTON 
 
E.O. 12958: N/A 
TAGS: ETRD AGOA KTEX EINV ECON SG
SUBJECT: SUPPORT FOR CONTINUANCE OF AGOA THIRD COUNTRY 
FABRIC PROVISION 
 
REF: STATE 131825 
 
DAKAR 00001970  001.3 OF 002 
 
 
1.  SUMMARY: The Government of Senegal (GOS) has selected 
the textile and apparel sector as a strategic growth 
sector for its Accelerated Growth Strategy.  Although 
Senegalese companies continue to have limited, domestic 
production of cloth and finished apparel, companies are 
making noticeable efforts to modernize in order to export 
apparel to the U.S. market under the African Growth and 
Opportunity Act (AGOA).  Most of these companies import 
fabrics from Asia and Europe because they are not produced 
in large quantities domestically.  Overall, the private 
sector supports extension of the third country fabric 
provision.  END SUMMARY. 
 
APIX EFFORTS TO REVITALIZE THE INDUSTRY 
--------------------------------------- 
2.  Senegal's Investment Promotion Agency (APIX) reports 
that many textile factories in Senegal are dormant.  The 
agency is currently researching strategies to modernize 
some industrial textile facilities, to provide incentives 
for foreign direct investment in the sector, and to 
organize the artisan level -- apparel/confection sub- 
sector.  Businesses operating in Senegal report lack of 
financing, erratic and costly electricity, unskilled 
labor, and low worker productivity as challenges to 
expansion.  A recent study commissioned by APIX recommends 
the establishment of a Textile Promotion Center to 
revitalize trade associations, improve technical 
information and training, and promote lobbying.  This 
center does exist but is not operational due to lack of 
financing. 
 
BUT PRODUCTION IS STILL LOW 
--------------------------- 
3.  Meanwhile, Senegal's textile companies continue to 
have limited domestic production of cloth and finished 
apparel.  Although some companies still do not operate at 
full capacity, some are in the process of expanding their 
production lines.  Garments manufactured at the industrial 
level include work uniforms, scrubs, t-shirts, sportswear 
and towels.  Senegal also has a thriving fashion sector 
with designs being crafted in traditional workshops for 
sale in niche Western markets. 
 
4.  Almost all fabrics are imported from Asia and higher- 
end wax fabric is imported from Europe to be printed and 
dyed with traditional, African designs in Senegal for sale 
in domestic and regional markets.  Sales are estimated at 
approximately 30 million meters per year.  Textile exports 
average less than five billion CFA francs (CFAF) (USD 9 
million dollars) per year.  Senegal also exports several 
hundred tons of thread per year to Europe, and there is 
regional demand for additional thread exports.  The low 
level of exports contrasts with the size of the domestic 
market, estimated at 130 billion CFAF (USD 260 million). 
A possible explanation for this is the used-clothing 
import industry, garment smuggling, and the undervaluation 
of apparel imports.  In 2005, the GOS reported 6,600 tons 
of used clothing valued at three billion CFAF (USD 6 
million). 
 
5.  Several small to medium-sized firms claim to be 
gearing up to take advantage of AGOA trade benefits and 
strongly support an extension of AGOA's third country 
fabric provision.  INDOSEN, a Senegalese company with 
Moroccan and Indian investment will receive Ex-ImBank 
financing to import digital equipment to improve its 
production of work uniforms to meet American demand. 
INDOSEN claims to have several orders in the pipeline, but 
it has not yet begun production and is currently in the 
process of training the local workforce.  It expects 
production will start in early September 2006.  Ets Solu 
and EGA Confection have also ordered digital machinery to 
increase production of sportswear and scrubs, 
respectively, for export to the U.S.  Both companies are 
working with the West African Trade Hub (WATH) in Accra to 
find American buyers. 
 
TEXTILE PRODUCTION FACILITIES 
----------------------------- 
6.  The following is a list of companies involved in the 
Senegal's apparel, textile, and yarn industry: 
 
 
DAKAR 00001970  002.2 OF 002 
 
 
-- EGA CONFECTION: Manufacturer of uniforms, scrubs, and 
men's wear.  It has modern, digital equipment with a 
production capacity of 600 - 1,200 pieces per day; imports 
fabrics from Morocco and Asia; employs 22 full-time and 80 
part-time staff. 
 
-- ETS SOLU: Sportswear manufacturer using 75 non-digital 
machines and an electric embroidery machine.  It claims to 
have on order 75 new digital sewing machines but admits to 
lack of skilled labor to use and repair them in country; 
has production capacity of 30,000 pieces per month; 
imports fabrics from Asia; employs 48 full-time and 15 
part-time staff. 
 
-- NSTS/FTT "La Nouvelle Societe Textile Senegalaise:" 
Partial owner of INDOSEN.  It produces large-gauge thread 
and unbleached fabric; has 148 Sulzer looms (110 to 130 
inch), 12,000 spindles, 648 open-end spinning RU 14 
rotors. 
 
-- INDOSEN (40 percent owned by NSTS): Indian/Senegalese 
joint venture that spins, weaves, knits, dyes, finishes, 
prints, and manufactures work wear.  It recently secured 
approval for Ex-ImBank financing to import 221 
specialized, digital sewing machines from the U.S.; other 
equipment includes 18,000 spindles,160 rapier looms, 12 
circular and 2 flat knitting machines, 190 sewing 
machines, 140 specialized sewing machines (non-digital) 
and 120 cut sewing machines.  It has a production capacity 
of 5 million pieces per year; imports poly-cotton blends 
from Asia; expects to launch production in September 2006; 
and will employ 760 full-time staff. 
 
-- COSETEX: Printing and dying company with two lines of 
non-digital machinery producing 1 million meters of "fancy 
cloth" per month.  It imports cloth from India, Benin, 
Nigeria, and Mali for sale domestically and for exports to 
West Africa, Europe, and the U.S. (in 2001 and 2002).  It 
is currently prospecting American market and has 80 staff. 
 
-- SOTIBA: Printing company that employs non-digital, 
printing and dying equipment to produce 1 million meters 
per month of "fancy cloth."  It imports cotton from India 
for sale in Senegal and has 250-300 full-time staff. 
 
-- CCV "Cotonnier du Cap Vert:" Merged with the former 
SOSEFIL.  Activities including ginning, spinning, weaving, 
knitting, dying, and manufacturing to produce 
approximately 1,200 tons total of thread, dishtowels, and 
t-shirts per year; equipment includes 28 non-digital 
sewing machines; 5 knitting machines; and 3 cotton 
spinning machines.  It sources cotton in Senegal, uses its 
own cloth for t-shirts and dishtowels, sells in Senegal, 
exports to the sub-region, and has 250-300 staff. 
 
-- SODEFITEX "Societe de Developpement des Fibres 
Textiles:" ISO 9001 certified ginning/cotton fiber company 
with five factories in eastern Senegal, producing a total 
of 56,000 tons of cotton fiber per year.  It sells in 
Senegal and exports to Asia, South America and Europe.  It 
sources its cotton in Senegal and employs 460 full-time 
and 4,000 part-time staff. 
 
JACOBS