US embassy cable - 04LILONGWE188

UNCLAS LILONGWE 000188 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ETRD, EINV, KTEX, PREL, MI, AGOA, Economic, Trade, Industry 
SUBJECT: AGOA III: INFORMATION ON MALAWIAN TEXTILE AND APPAREL 
PRODUCTION CAPABILITIES 
 
REF: STATE 026964 
 
1.  THIS CABLE IS IN RESPONSE TO REFTEL REQUEST FOR INFORMATION ON 
TEXTILE AND APPAREL PRODUCTION CAPABILITIES IN AGOA-ELIGIBLE 
COUNTRIES. 
 
TEXTILES 
-------- 
2.  THE TEXTILE INDUSTRY IN MALAWI IS SMALL AND UNDERDEVELOPED.  THE 
COUNTRY'S ONLY TEXTILE FACTORY, MAPETO (DWSM) LIMITED (FORMERLY DAVID 
WHITEHEAD & SONS), WAS GOVERNMENT-OWNED AND HAS RECENTLY BEEN SOLD OF 
TO PRIVATE INVESTORS.  THERE ARE NO PRODUCTION OPERATIONS AT THE 
FACTORY AT THE MOMENT.  THE NEW OWNERS ARE BUSY CARRYING OUT A 
COMPLETE OVERHAUL OF THE FACTORY AND ARE REHABILITATING AND 
MODERNIZING EQUIPMENT AND MACHINERY.  FULL OPERATIONS ARE EXPECTED TO 
RESUME SOMETIME AFTER APRIL 2004.  THE OLD FACTORY HAD 118 LOOMS.  TH 
MACHINES ARE FOR OPEN-END AND RING SPINNING.  THE RAW MATERIAL USED 
WAS BOTH UNGINNED AND GINNED COTTON FROM MALAWI, EGYPT, MOZAMBIQUE AN 
ZAMBIA. THE NUMBER OF EMPLOYEES IS CURRENTLY ZERO (EXCLUDING 
MANAGEMENT) BUT THEY PLAN TO ENGAGE 950 WHEN THEY START THIS YEAR 
RISING TO 2000 IN THE SECOND YEAR AND 6000 IN THE FOURTH YEAR. 
 
APPAREL 
------- 
3.  FIVE APPAREL-PRODUCING COMPANIES ARE EXPORTING UNDER AGOA. 
TOGETHER, THEY EMPLOY 7,045 WORKERS EXCLUDING MANAGEMENT.  THEY USE A 
TOTAL OF 4300 SEWING MACHINES.  THE PRODUCT RANGE IS BROAD AND THE 
TARGET MARKET IS MOSTLY LOW TO MID-RANGE PRODUCTS FOR DISCOUNT AND 
DEPARTMENT STORES RESPECTIVELY.  THE INDIVIDUAL COMPANY CAPACITY IS A 
FOLLOWS: 
 
A) CHIRIMBA GARMENTS LIMITED 
LABOR FORCE:  3000 
SEWING MACHINES: 2000 
INPUT MATERIALS: KNIT FABRIC (COTTON, CVC, T/C) AND WOVEN FABRIC 
(COTTON, MICRO-FIBRE, NYLON, POLYESTER). 
SOURCE OF MATERIALS: CHINA, TAIWAN AND PAKISTAN. 
FINAL PRODUCTS: SHORTS, CARGO PANTS, JEANS, T-SHIRTS, POLO, JACKET, 
UNIFORM AND SPORTS APPAREL. 
TARGET MARKET FOR FINAL PRODUCT: MID-RANGE. 
 
B) CROWN FASHIONS LIMITED 
 
LABOR FORCE:  875 
SEWING MACHINES: 400 
INPUT MATERIALS: COTTON DENIM FABRIC, COTTON TWILL FABRIC, ACCESSORIE 
AND PACKAGING MATERIAL. 
SOURCE OF MATERIALS: CHINA, INDONESIA, PAKISTAN AND MALAWI. 
FINAL PRODUCTS: JEANS, CHINO/CARGO PANTS, SHORTS, DENIM SHORTS. 
TARGET MARKET FOR FINAL PRODUCT: LOW-END (STEVE & BARRY UNIVERSITY 
SPORTS STORE AND FAMILY DOLLAR) AND MID-RANGE (BEALL'S). 
 
C) GIANT CLOTHING LIMITED 
 
LABOR FORCE: 680 
SEWING MACHINES: 450 
INPUT MATERIALS: FABRIC, ACCESSORIES AND PACKAGING MATERIALS. 
SOURCE OF MATERIALS: CHINA, SWAZILAND, SOUTH AFRICA AND MALAWI. 
FINAL PRODUCTS: PANTS AND SHORTS, CHEF'S JACKETS AND PANTS. 
TARGET MARKET FOR FINAL PRODUCT: 40% FOR LOW-END MARKET AND 60% FOR 
MID-RANGE. 
 
D) HAPS INVESTMENT LIMITED: 
 
LABOR FORCE: 2300 
SEWING MACHINES: 1300 
INPUT MATERIALS: COTTON TWILL, COTTON DENIM, COTTON/POLYESTER JERSEY 
AND INTERLOCK. 
SOURCE OF MATERIALS: CHINA AND TAIWAN. 
FINAL PRODUCTS: CHINOS, JEANS, AND CARGO PANTS; SHIRTS; MATCH STRIP 
TOPS; POLO SHORTS; CARDIGANS; LIGHT JACKETS. 
TARGET MARKET FOR FINAL PRODUCT: LOW-END PRODUCTS FOR WAL-MART.  MID- 
RANGE PRICED FOR TARGET, HAGGAR, JC PENNY, DICKIES, SEARS AND THE 
LIMITED. 
 
E) KNITWEAR INDUSTRIES LIMITED 
 
LABOR FORCE: 240 
SEWING MACHINES: 150 
INPUT MATERIALS: COTTON, COTTON/POLYESTER BLENDS, KNITTED FABRICS. 
SOURCE OF MATERIALS: CHINA, TAIWAN, PAKISTAN, INDIA AND SOUTH AFRICA. 
FINAL PRODUCTS: LADIES TOPS, T-SHIRTS. 
TARGET MARKET FOR FINAL PRODUCT: 100% LOW-END PRODUCTS FOR DISCOUNT 
STORES AND WHOLESALERS. 
 
BROWNING