US embassy cable - 04MAPUTO294

UNCLAS MAPUTO 000294 
 
SIPDIS 
DEPT FOR AF/EPS DKRZYDA; AF/S 
USDOC FOR AHILLIGAS 
DEPT PASS USTR FOR CHAMILTON AND WJACKSON 
E.O. 12958: N/A 
TAGS: ETRD, KTEX, EINV, PREL, MZ, AGOA 
SUBJECT: AGOA III: TEXTILE AND APPAREL PRODUCTION 
CAPABILITIES IN MOZAMBIQUE 
 
REF: A. STATE 026964 
B. MAPUTO 00269 
C. MAPUTO 01114 
 
1. Overview: Mozambique's once thriving and highly 
heterogeneous textile and garment industry experienced steady 
and significant decline throughout the early 1990s. At its 
peak, the industry was comprised of 45 facilities, including 
19 textile and 26 garment factories, producing a wide range 
of products. None of Mozambique's six existing textile 
facilities are currently operating at more than minimal 
capacity. A number of legal issues, including outstanding 
severance pay for former employees, shareholder/ownership 
disputes, limited capital, bureaucracy, and inflexible labor 
laws are all challenges to revitalizing Mozambique's textile 
industry. While garment exports under AGOA have been limited, 
with only one garment company currently exporting under AGOA, 
there is great growth potential and a major new investment is 
scheduled to come on-line in the next year (Ref B). All 
fabric used in garment operations is currently imported. 
Despite the potential revitalization of several existing 
textile operations, garment operations are likely to rely on 
imported fabric in the near-term. As noted in Ref C, host 
government officials and local industry representatives have 
stressed the importance of extension of third-country 
provisions beyond September 2004 if Mozambique is to take 
advantage of AGOA. 
 
2. Textile Production Facilities. Mozambique's six existing 
textile production facilities are: Texlom, Riopele, 
Texafrica, Textil de Mocuba, Texmoque, and Texmanta. Two of 
the six facilities are currently being used or have been 
targeted for use in other commercial activities. 
Specifically, Texlom will be the site for a new garment 
assembly operation; Texmanta is currently being used for a 
shrimp processing project. Textil de Mocuba, once envisioned 
as the largest textile mill in Africa, has never operated. 
As noted above, none is currently operating at any 
significant level. The remaining three facilities-- Riopele, 
Texafrica, Texmoque-- could potentially be revitalized. All 
facilities contain a variety of machinery that, depending on 
current condition and product line, could potentially be used 
if any of the facilities were to be revitalized. 
A - Machinery/Technology: Spinning, circular knitting, 
bleaching, carding, dyeing, combining, mercerizing, winding 
and sewing thread machines, looms. Most machines date from 
the late 1970s/early 1980s, though a number of looms were 
also purchased in the early 1990s. 
B- Products: Cotton yarn, sisal cords, folkloric and other 
clothing fabrics, blankets. 
C- Employment: During peak operations, the larger of the 
three facilities together employed over 4,000 workers. A 
number of outstanding labor issues remain at the facilities. 
D- Inputs: Locally-produced cotton and imported (European) 
polyester/viscose. The largest facility, Texafrica used 
local cotton exclusively. 
 
3. Apparel Production Facilities: Mauritian-owned Belita is 
currently the only garment facility operating in Mozambique. 
It exports to the United States (under AGOA), Europe and 
South Africa. It currently employs approximately 500 workers. 
All fabric is imported, principally from Mauritius. Its 
product-line is comprised mostly of t-shirts. Two other 
facilities have closed within the past two years. Together, 
these facilities employed over 700 workers. As noted above, a 
major new garment facility is expected to come on-line within 
the next year. Machines are currently being sourced. 
 
4. The target markets for finished products have 
traditionally been discount stores (e.g., Target) in the 
United States, South Africa and Europe. 
 
5. USAID recently contracted a report on Mozambique's 
textile/apparel facilities which includes an inventory of 
machinery/technology at the facilities cited above. This 
report is currently in draft form and will be completed 
shortly. 
LA LIME