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TRADE HUB AND AFRICAN

PARTNERS NETWORK

PROGRAM FOR EXPANDING APPAREL EXPORTS,


TECHNICAL ASSISTANCE PERFORMED OCTOBER 2014

Contract No.: AID-624-C-13-00002-00

[October 2014]
This publication was produced for review by the United States Agency for International Development. It
was prepared by Abt Associates Inc. for the Trade Hub and African Partners Network.

Recommended Citation:

De Voest, Joop. Program for Expanding Apparel Exports Technical


Assistance Performed October 2014. Prepared for the Trade Hub and
African Partners Network by Abt Associates Inc., Bethesda, MD,
October 2014.

Submitted to:

Brinton Bohling, Chief, Office of Trade and Investment


(+233) 30-274-1317
No. 24 Fourth Circular Rd, Cantonments
Accra, Ghana

Abt Associates Inc. 1 4550 Montgomery Avenue 1 Suite 800 North 1


Bethesda, Maryland 20814 1 T. 301.347.5000 1 F. 301.913.9061 1
www.abtassociates.com

TRADE HUB AND AFRICAN


PARTNERS NETWORK
PROGRAM FOR EXPANDING APPAREL EXPORTS,
TECHNICAL ASSISTANCE PERFORMED OCTOBER
2014

Contract No.: AID-624-C-13-00002-00

DISCLAIMER
The authors views expressed in this publication do not necessarily reflect the views of the United States
Agency for International Development (USAID) or the United States Government.

CONTENTS
Acronyms ....................................................................................................................................... 2
Executive Summary ...................................................................................................................... 3
1.

Report of Activities................................................................................................................ 4

1.1 Key Issues Addressed.............................................................................................................................................. 4


1.2 Outcomes................................................................................................................................................................... 4
2.

Analysis and Recommendations........................................................................................... 7

2.1 Factory Shells ............................................................................................................................................................ 7


2.1.1

Tema Garment Village ................................................................................................................................... 7

2.1.2

Accra garment enclave .................................................................................................................................. 7

2.1.3

Other buldings within the enclave .............................................................................................................. 8

2.1.4

PSI factory complex (accra north industrial zone).................................................................................. 8

2.1.5

Dignity DTRT Apparel................................................................................................................................... 8

3.

Follow up .............................................................................................................................. 10

3.1 Upcoming activities ................................................................................................................................................ 10


Annex A: Note On Ghana Apparel Industry Strategy ............................................................ 11

Program for Expanding Apparel Exports, Short Technical Assistance Performed in October, 2014.

ACRONYMS
AMAG
AVCS
AVCA
COTVET
EDAIF
GAMA
GEPA
GIPC
GTMC
ITC
MOTI
PSI
WRAP

Apparel Manufacturers Association Ghana


Apparel Value Chain Specialist
Apparel Value Chain Assistant
Council for Technical & Vocational Education & Training
Export Trade, Agricultural & Industrial Development Fund
Ghana Apparel Manufacturing Association
Ghana Export Promotion Authority
Ghana Investment Promotion Center
Ghana Textile Manufacturing Company
International Trade Center
Ministry of Trade and Industry
Presidential Special Initiative
World Responsible Apparel Production

Program for Expanding Apparel Exports, Short Technical Assistance Performed in October, 2014.

EXECUTIVE SUMMARY
In previous Value Chain assessments of the apparel sector, it was concluded that successful firms along
the value chain are operating in: Ghana, Cote dIvoire and Benin. The level of activity in the latter two
countries is much lower than in Ghana, the previous VC assessment, but the VC Assessment
recommended that targeted support to these two countries be provided.
The purpose of this trip was to support the Trade Hub in assisting these firms to increase apparel
production within the value chain. This will be achieved through a series of Strategies intended to be
implemented in 2015; these were presented to the Trade Hub.
During the visit, former GAMA Executive members and other interested apparel manufacturers met
with Trade Hub staff and Value Chain specialists to familiarize them with the THN project, its strategies
and goals for the Apparel Value Chain as well as discussing ways to revive the association that is
currently inactive.
Most importantly, the trip was instrumental in introducing the Apparel Value Chain expert in Ghana,
Emmanuel Odonkor to a number of apparel factories and government stakeholders involved in the value
chain such as the Ministry of Trade and Industry. As a result of the meeting, the ministry requested an
export strategy from the THN to be considered in their sector export budgets for 2015-2017; this
strategy was developed and delivered on October 22nd.
Lastly, the consultants met with Government stakeholders (MOTI, COTVET, EDAIF and GEPA) as well
as the US Embassy Economic Councilor to discuss ways in which Dignity DTRT Apparels US Joint
Venture partners (DTRT Apparel USA) would continue to have a presence in view of their upcoming
visit to Ghana to evaluate whether to continue with their Joint Venture or shut operations down since
their local partner Dignity Garments had as yet not been able to secure the training grant from
COTVET and the loan from EDAIF for machinery
A new Association, AMAG (Apparel Manufacturers Association Ghana) is now in the process of being
registered, the executive is to be chosen and former GAMA constitution to be amended to reflect new
Association name. Next meeting has been set for November 13th, 2014

Program for Expanding Apparel Exports, Short Technical Assistance Performed in October, 2014.

1. REPORT OF ACTIVITIES
1.1

KEY ISSUES ADDRESSED


The following is an outline of the main activities performed during the consultants trip:
Introduction of the new Trade Hub program and AVCS Emmanuel Odonkor to the apparel
manufacturing industry and Government industry-related stakeholders.
Apparel Manufacturer status-quo updates and discussed the need for Company Profiles1 to be
updated on quarterly basis
Identified the need for an apparel industry Association to be re-constituted and registered
Developed an apparel export strategy for MOTI to fast-track exports and unblock
impediments to attaining increased exports
Developed TORs for Joop de Voest and the AVCS, Emmanuel Odonkor, to perform a series of
exploratory trips to following technical trips to Ghana, Benin and Cote dIvoire in November
2014. The objective of these initial trips is to lay the groundwork for subsequent technical trips.
Unexpected make or break US investor trip due to the fact that the absence of the local
partners commitments (securing the COTVET training grant and loan from EDAIF for
equipment), Dignity DTRT Apparel venture will have to evaluate whether to shut down its
operations or find other means of financing.

1.2

OUTCOMES
Being one of the initial technical trips and with the presence of the local AVCS, the focus of this
trip was to approach stakeholders in the apparel sector, inform them of the new Trade Hub
project and its programmatic activities as well as the local AVCS expert who would be working
closer with the sector. The stake-holders expressed excitement to know that the Trade Hub
was back in operation. Below is an outline of the main outcomes of the trip:

The AVCS was introduced to most of the apparel manufacturing industry and given tours of
mass production apparel factories, geared to exports, to absorb first-hand the key
manufacturing processes.

The former members of GAMA agreed to leave the association as inactive and instead register a
new Association called Apparel Manufacturers Association of Ghana2. The steps necessary for

Company, contact details, products produced, fabrics used, capacity, number of machines, value adding, local
market/export geared etc.
1

Program for Expanding Apparel Exports, Short Technical Assistance Performed in October, 2014.

registration (drafting of new constitution, collection of registration payment, election of


governing body) were all discussed and will be finalized by the upcoming November 13th
meeting. In the next six months, the AVCS and THN will act as Secretariat, after the
Association will obtain its own premises/meeting place.
-

The ACVA and the AVCS visited the two leading firms (DTRT Apparel and Lucky 1888) as well
as others: as Nallem Clothing, KAD Manufacturing, House of Damaris and Precious Textiles.
They also visited Sleek Garments (owner not there), Rim-Artex (owner not present), Oakbrook
(closed), Premier Quality (closed), Global Garments (Tema factory closed, with below par
operation of Accra factories). The former GTMC (Ghana Textile Manufacturing Company) was
also visited with a view to determine whether any of its buildings were available for additional
apparel factories. Others such as Manise Designs were contacted but were unable to meet.

Meetings were held with Government bodies, including, MOTI (Ministry of Trade & Industry),
GEPA (Ghana Export Promotion Authority), GIPC (Ghana Investment Promotion Center),
EDAIF (Export Trade, Agricultural & Industrial Development Fund) and COTVET (Council for
Technical & Vocational Education & Training). The main outcomes of these meetings are:
1. MOTI requested THN to provide them with an Apparel export strategy for the 20152017 periods (see Annex)
2.EDAIF indicated that as they were in the last quarter of their financial year, funds were
essentially depleted, but that there were emergency funds available that could be utilized
only through the political intervention from the Minister or Presidential.
3. COTVET indicated that the Dignity Garment proposal was rejected for the 4th time
because they were not using a third party for training (despite the fact that DTRT Apparel
is a separately registered and licensed training and technical advisor)3
4. GEPA was keen to work more closely with THN regarding their export promotion
activities
Various Skype conference calls were held with Made in Africa and DTRT Apparel in the US and
in Ghana as well as a meeting with the Economic Councilor of the US Embassy regarding the
dilemma faced by Dignity DTRT Apparel. Made in Africa has access to equity/loan finance for
apparel companies and is looking to assist in WRAP (World Responsible Apparel Production)
and Fair Trade certification, currently it is seeking to find suitable manufacturers to connect with

The original GAMA was registered by one person who also nominated herself as President and has to date not been
willing to provide the other former members with the original registration documents.
2

It should be noted that the first application was rejected because COTVET did not believe they could train 1,000
workers in a year. The second proposal was rejected because they used US dollars and not Ghana Cedi in their proposal
and so on. Political or bureaucratic interference as other companies not really qualified for training grants were provided
with grants up to Cedi 500,000 with nothing to show for it.
3

Program for Expanding Apparel Exports, Short Technical Assistance Performed in October, 2014.

buyers in the US and EU.. Made in Africa is expected to set up offices in Ghana in Q1 2015 and
is looking to work closely with THN in reaching their goals. The US Economic Councilor would
facilitate a meeting between DTRT Apparel, US investors and the US Ambassador to evaluate
what can be done to ensure the continuation of their Joint Venture partnership with Dignity
Garments.

Program for Expanding Apparel Exports, Short Technical Assistance Performed in October, 2014.

2. ANALYSIS AND
RECOMMENDATIONS
2.1
2.1.1

FACTORY SHELLS
TEMA GARMENT VILLAGE
Five factory buildings were set up under the former PSI (Presidential Special Initiative) to house
garment manufacturers capable of exporting the first factory acts as a warehouse for Global
Garments machinery. The second and third buildings are occupied by Lucky 188. However,
these buildings are facing severe space problems and only able to utilize 375 of their 550 sewing
machines. As a result, efficiency has been affected and exports have dropped to 75% (exporting
200,000 units instead of 265,000 units per month). This has been brought to the attention of
MOTI, through the Trade Hubs apparel export strategy. The fourth and fifth buildings serve as
warehouses for the equipment of Premier Quality and Oakbrook respectively. The necessary
step to reduce the issue with the lack of space is that MOTI declares Global Garments, Premier
Quality and Oakbrooks warehouse rental contracts null and void to allow, Lucky 1888 to
occupy at least one, if not two of the Tema factory buildings. Additionally, the Tema factory
buildings are in need of maintenance and the road leading to the factories is also in need of
repair.
Lastly, in the Tema export processing zone, Precious Textiles has set up its operations through
their privately owned building, with space to expand and 140 machines. . Although; only 80 are
set up for mass production and currently only producing school wear (50,000 uniform orders)
for the local market. It does not have export experience.

2.1.2

ACCRA GARMENT ENCLAVE


Dignity DTRT Apparel has allocated a building to act as warehouse for the vast volume of
imported fabrics used in the production of garments for export as well as housing their in-house
training facilities. The training facility includes 100 machines and 600 trained machine operators
to date, aiming for another 400 operators to be trained by the end of the year. Currently, it has
590 machines on their factory floor with 300 more machines to come. For this reason, they are
in great need of another building.
However, opposite their building there are another two buildings that are warehousing Global
Garments machines. Dignity DTRT has been granted occupational rights to one of these
buildings. Global Garments, however, is very reluctant to move its machinery out of the factory
building. This issue will not be resolved until MOTI enforces Dignity DTRTs occupation rights.
Global Garments has 300 machines warehoused in the Tema Garment Village. In the Accra
Enclave, they have another 700 sewing machines, although very few (50 or so) are in actual use
producing garment for the local market. This company also received 385,000 GHC in COTVET
funding to train 500 people, but currently has no export orders. The company had exported in
the past, but has had certain logistical issues ending in the cancellation of their orders (?)

Program for Expanding Apparel Exports, Short Technical Assistance Performed in October, 2014.

2.1.3

OTHER BULDINGS WITHIN THE ENCLAVE


There are other buildings in the Enclave that are occupied by other firms also operating at subcapacity.
Rim-Artex has at least 120 machines, but is only operating two lines (24 machines) to produce
work wear for the local market, it does not have export experience as of yet.
Sleek Garments has 300 machines, but in the last 2 visits, it has been observed that they are only
employing between 40 and 50 people producing only for the local market. This is despite a
COTVET grant of 500,000 GHC to train 400 people for export orders.
Another building is occupied by Sixteen47, a niche small garment exporter generating sales
online. Lastly, Lemdor, with 400 machines, has been standing idle for at least three years. They
cannot begin production due to the fact that they are not they are not yet connected to the
power grid, despite a transformer having been installed to serve the factories. They are also still
in the process of trying to secure funding for their operations.

2.1.4

PSI FACTORY COMPLEX (ACCRA NORTH INDUSTRIAL ZONE)


This complex currently houses KAD Manufacturing (150 machines) which is producing fashion
garments, uniforms for the local market as well as well as relatively small export volumes to the
US. They may also start producing for a company in Benin in the next few months that needs to
outsource production. Nallem Clothing is the next factory in the complex, with120 machines; it
produces fashion garments for their own 5 shops. Based on discussions with new mall anchors,
Mr. Price, with a view to supplying their retail outlets and Macys in the US for export orders4,
Nallem is planning to add another 200 machines to engage in mass production. Nallem Clothing
was also one of the recipients of 325,000 GHC for training.
The next building is occupied by House of Damaris. With 50 machines it is set up for mass
production lines, but essentially producing work wear and school uniforms for the local market.
The final building was the original PSI training centre, but has now made way for ITC
(International Trade Center) Ethical Fashion Initiative with (50 brand new sewing machines. This
was set up under MOTI to train fashion designers in product development, design, quality
control, etc. under ethical guidelines. The idea is to make this centre self-sustaining.

2.1.5

DIGNITY DTRT APPAREL


The US partner of this joint venture (DIGNITY GARMENTS local manufacturing partner and
DTRT APPAREL US who provides the orders, training and technical advice) is scheduled to

Macys viewed Nallem s garment collection with interest, but indicated they would have to expand production capacity
to meet their order volumes. Nallem Clothing is evaluating the purchase of an additional 200 machines.
4

Program for Expanding Apparel Exports, Short Technical Assistance Performed in October, 2014.

arrive in the week of October the 20th. COTVET5 has not yet provided the training funds the
venture applied for in January 2014 due to bureaucratic reasons. EDAIF6 also has not provided
an intended soft loan for machinery. US investors have provided more than $1 million in
machinery and working capital for training and they are in a position to provide further funding.
During the trip, Dignity Apparel was in the process of determining whether it was necessary to
close the operations, unless COTVET and/or EDAIF funding is resolved. The Trade Hubs
CHIEF OF PARTY, Jeff Povolny has informed USAID and US Embassy of the pending decisions
that needed to be made and has set in motion a number of meetings. One of these will take
place with MOTI on October 22nd.

COTVET was funded by a US$50 million and DENAD US$10 million grant for agricultural and manufacturing companies
to access for training purposes and upgrade skills levels.
5

A funding institution that falls under the Ministry of Trade & Industry for companies to access funding (by way of grants
and/or loans) for attending tradeshows, equipment to expand capacity and where applicable technical assistance (Latter
now falls under COTVET)
6

Program for Expanding Apparel Exports, Short Technical Assistance Performed in October, 2014.

3. FOLLOW UP
3.1
-

UPCOMING ACTIVITIES
AVCS, Emmanuel Odonkor, has contacted all garment companies regarding the next
Association meeting and will follow up before the appointed date. He will also follow up with
Dela (DTRT) regarding the Association registration documents as well as with Prosper
(Lemdor) regarding the re-draft of the constitution.
Emmanuel will also distribute company profile documents to be completed for the companies
who have not yet done so.
The export strategy drafted for MOTI is with the Trade Hub and will be handed to MOTI at the
meeting on October 22nd.
The Trade Hub has also requested a meeting with Skip Richmond when in Accra and is liaising a
possible meeting with the US Ambassador and other parties interested in Dignity DTRT Apparel
joint venture being a success.
Emmanuel will prepare for his upcoming trip to in Benin and Cote dIvoire to engage with
factories and Government bodies and lay the foundation for future meeting schedules and
detailed factory visits in November. The visits will serve as a learning exercise of fabric knitting
and dyeing processes, not found in Ghana.
Emmanuel will also set up appointments for factory visits with Akasombo Textiles and GTP or
Printex in Ghana for the third week in November when the AVCA returns to Ghana.

Program for Expanding Apparel Exports, Short Technical Assistance Performed in October, 2014.

10

ANNEX A: NOTE ON GHANA


APPAREL INDUSTRY STRATEGY
INFORMATION NOTE
Date:

October 21, 2014

Subject:

Apparel Industry Strategy 2015 to 2017, with Q4 2014 Immediate Action


Recommendations

Prepared for: Gerald Nyarko-Mensa MOTI Technical Advisor Export Development


Prepared by: West Africa Trade Hub, Apparel Value Chain Expert

As requested by Mr. Nyarko-Mensa during meetings with Trade Hub on October 10, apparel team, the
following Information Note provides a brief history/overview of the Ghana apparel value chain, pointing
our past deficiencies to be avoided, immediate actions to take for the remainder of 2014, and a series of
strategic steps to assure the successful re-launch of this high potential industry. As noted in Trade Hub
assessments, Ghana has the potential to become the apparel export powerhouse of West Africa.
This can be best assured by supporting fully, the two current industry leading firms in
Ghana, 1888 Lucky Mills and Dignity DTRT. Support for leading firms has been shown
around the world as the proven way to grow an apparel industry, and bring in Foreign
Direct Investment.

BACKGROUND/HISTORY BRIEF OVERVIEW (ROUGH DATE


GUIDELINES)
-

2002: PSI (Presidential Special Initiative) created, initially 4 factories in PSI complex (ex-Volta
garments complex), Gold Coast, Premier Garments, Sleek and Decent Touch, subsequently
privatized. Gold Coast became training Center.
2004/05 Privatized companies through PSI/MOTI started export drive, with customers such as
SUG, Hagar etc. By 2006 California Link (Kenya factory relocation - FDI) became export driving
force. Did some subcontracting to Premier and Sleek, who also became a beneficiary of a 70,000
unit, Oryx order, through California Link contacts.
2007 California disappeared (efficiency/productivity issues and inability to start second shift to
take volumes from 50-60,000 units per month to 140,000 units per month with additional
equipment to be installed). A USAID WATH report on the West African textile and apparel
industry Value adding to cotton, pinpointing Ghana as most investor friendly, attracted
attention from Lucky 1888.

Program for Expanding Apparel Exports, Short Technical Assistance Performed in October, 2014.

11

Upan Wasana (Kenya factory, employing 2,400 people, producing 30,000 Dozen jeans per
month), came to Ghana to relocate part of factory (15,000 Dozen per month). New factory
building started, but at foundation level asked to move in to California Link factory shell, but
equipment all knit garments not jeans geared. Promised water availability for jeans washing plant
needed 85,000 to 100,000 Gallons per day did not materialize. Owner/prospective investor
left after 6 months of promises, but no action.
2007/08/09 World economic melt-down, with a temporary order from Hagar (100,000 units)
shared between Sleek, Decent Touch and Oakbrook. Orders not completed as margins for CM
production too low. Industry exports and apparel manufacturing in Ghana for all intense of
purposes collapsed, with most/all companies producing for the local market, workwear, school
uniforms etc.
2007 to 2010 the Ghanaian apparel industry saw the following companies close their doors7:
Africstyle, Belin Textiles (became Earl Park Garments, also closed), Gold Coast Collection
(became training centre, then closed), Maa Grace, Network Knitwear Fabrics, Oakbrook,
Premier Garments, Textile Pro and Top Circle
2010/11 Having spent 2 years evaluating factory feasibility, 1888 set up their factory and
started training mid-2010, with first exports commencing late 2010. One factory shell not
enough, waited nearly one year for second factory shell.
2012 - Occupied second factory (ex-second building previously occupied by Global machinery
only) and official opening. Since then 1888, has been exporting 200,000 garments (medical) per
month. Unfortunately, in 2012 still the only real export led garment manufacturer in Ghana.
Global Garments (Tema premises) obtained export order through WATH Apparel team efforts,
briefly produced for export client, but client not happy and order collapsed.
2013 Liberty & Justice occupied Premier Quality Garment building (having stood idle for 3
years), trained workers, added new machines, to produce trousers for Itochu clients in the US.
2014 (Quarter 1), Liberty & Justice disappeared (Efficiency and productivity issues). Premier
Quality building again standing idle and acting as warehouse for machinery.
Dignity DTRT Apparel (Ghana) and DTRT Apparel USA started JV, although totally separately
registered entities (Dignity DTRT Ghana as licensed garment manufacturing enterprise and
DTRT Apparel USA as registered and licensed trading and accredited training and technical
advisor).
By May 2014, company had trained 400 people and added to 245 to the 145 existing Dignity
machines (total 390 machines).
By October, more machines added (now 590 with more to come) and employing 600 people
and shipped first 30,000 unit export order in September, with many more being trained in their
separate training centre8 (100 machines) every month to reach 1080 trained employees by Dec
2014. Export order of 210,000 units was planned to go out in October but will now only

Note should be taken that Belin/Earl Park equipment was bought by Rim-Artex, Training Centre now occupied by ITC
Ethical Fashion Initiative, Maa Grace still has some 300 machines in place, Oakbrook also still has some 260 machines
standing idle. Others with mostly idle machines are Global garments and Lemdor.
8
This is taking place in the building next door to Dignity DTRT, with the balance of space being used as warehouse for all
their fabrics. Apart from training on sewing machines, key people are also being trained on CAD pattern plotting
machines, quality control, sampling production (different to mass productions) etc.
7

Program for Expanding Apparel Exports, Short Technical Assistance Performed in October, 2014.

12

materialize in November (efficiency issues Warning Bell9) but being addressed by management
this coming week. USA partner will be arriving week of Oct 20th.

CURRENT INDUSTRY STATUS-QUO


The biggest opportunity to put Ghana apparel export industry on the map!
Lucky 1888, exporting 200,000 units per month for the last two years, but with capacity to do
350,000 to 400,000 units per month.
Dignity DTRT Apparel, about to embark on sustainable export orders (confirmed) of 210,000
units per month to be ramped up within 6 months to 400,000 units per month for next 6
months before being increased to 600,000 units per month.
Ghana COULD see apparel exports reach 1,000,000 garments per month by end 2015 (A fivefold increase in apparel exports in volumes and even more by value as will be exporting full Package
garments and not just Cut, Make prices)

NB: Retailers/Buyers/Brands in the US (and EU) as well as garment manufacturers, watch OGOA
country exports carefully for signs of the next sourcing destination. This is triggered by a surge in
AGOA exports from any one country. This happened with ETHIOPIA. Exports surged and within a
matter of two years had attracted $450 million in FDI in to their textile and apparel industry (in earlier
days happened to Lesotho, Kenya, Swaziland, Tanzania etc).
Ghana has thus, going into 2015, a golden opportunity, to become one of the next major apparel export
manufacturing sectors and sourcing destinations. This opportunity, if not grasped now, may evaporate.

CAVEAT
Apart from the known energy issues (can be overcome until new energy generation kicks-in in
201710) in the Accra Garment EPZ enclave (much less of a problem in Tema EPZ) and water
availability issues in the Tema Garment village (month and a half no water for ablutions nor
drinking) that can also be overcome11, there are some fundamental stumbling blocks/challenges
that need to be urgently addressed by MOTI and its Government department apparel value
chain stakeholders.

1. Lucky 1888
This company with just the two relatively small12 (for mass production apparel purposes) factory
shells now has serious space issues. They have already bought two 40ft containers (@ $9,000
each) for outside storage and looking for two more if they do not get the third factory shell.

See points under California Link and Liberty & Justice


Until such time that the additional energy is available, for MOTI/Ministry of Finance, to consider a Tax break for
companies having to install their own generators (depreciation of generator say in 3 years?).
11
Similarly, a tax break for companies to drill for boreholes?
12
Most factory shells made available for apparel manufacturers in industrial EPZ estates in Kenya, Lesotho, Tanzania,
Swaziland and now even Rwanda, are a minimum of 2,000/2,500 m2 to 4,000/5,000 m2. The Tema ones at 1,200 m2 are
not ideal but if occupying more, could be manageable
9

10

Program for Expanding Apparel Exports, Short Technical Assistance Performed in October, 2014.

13

This would however be a temporary solution. The space issue has seen their efficiency rates
drop from 95% to 75% (Capacity to produce with existing machines in the factory is 260,000
units per month but can only produce 200,000). This seriously impacts profitability and if not
resolved, may lead the company to evaluate alternative locations/other countries or just close.
NB: The first factory shell of the 5 in Tema Garment Village has been a warehouse for Global
Garment machinery for 2 to 3 years. The next two are Lucky 1888. The one after that is
Premier Quality, that apart from a brief respite in 2013 (Liberty & Justice Occupation) has also
effectively been a warehouse for machinery for some 3 years if not more. The fifth factory shell,
Oakbrook, has effectively also been a warehouse for machinery for past 3+ years.
Although there may be occupational contracts in place, MOTI needs to seriously evaluate how
these contracts at the Tema Garment Village can be made null and void to make at least one of
them available soonest for Lucky 1888. Another factory shell would possibly also not go amiss,
as currently 1888 have some 550 machines on site, but only 375 on the production floor, due to
space issues. The fact that the space issue is downgrading its efficiencies to only 70% is worrying.
Another factory shell would also allow them to put the other 175 machines to work and ramp
up production to between 350,000 and 400,000 units per month.
Making at least one of these factory shells available would see not only an increase in garment
exports but also increased employment from current 465 people to between 700 and 750
people.
2. Dignity DTRT
This company has rapidly progressed from a mere 145 machines at the beginning of the year to
close on 600 machines by October 2014, with another 300 to be ordered before the end of the
year, with by then a trained workforce of just over 1,000 people. The second building, next
door to Dignity and facilitated by MOTI, has greatly alleviated their space constraints and ability
to train more workers and warehouse the huge quantities of fabric in stock for the export
orders in hand.
However, the expansion of the company and plans to ramp up production to 400,000 and then
600,000 units per month are in jeopardy.
The first challenge is the COTVET training grant, repeatedly rejected, initially because the
evaluators did not believe the company could train 1,000 workers and make employment
available to them within 12 months.13 Another rejection/resubmission was to follow in that the
proposal was not in Cedi but in US dollars and SWOT analysis had to be changed. In my
personal opinion this is petty bureaucracy. After resubmitting, only to be told that as DTRT
Apparel US is a partner COTVET cannot provide funding as it is not a third party. Note should
be taken that Dignity DTRT and DTRT Apparel US are two separately registered companies
with distinctly different trading licenses.

The US partners have demonstrated their ability to do so, with the Mazava factory in Tanzania, which within 5 years
employed 3,500 people, all trained by Dignitys US trading and accredited training provider.
13

Program for Expanding Apparel Exports, Short Technical Assistance Performed in October, 2014.

14

This has been ongoing since January 2014, whilst other garment manufacturers, having received
training grants in the range of Cedi 385,000 to Cedi 500,000 to train 500 and 400 workers
respectively have been granted, yet the vast majority of those trained are back on the streets, in
the absence of ongoing export orders and were thus not sustainable jobs.
Secondly, training for export orders has to be done in-house, or by a company with a track
record of training for exports. A company or institution in Ghana that can provide massproduction apparel manufacturing training geared to the specific need of international buyers
does not exist. All training that has been done for companies in Ghana to-date has not been of a
serious mass production nature to meet the exacting standards of international buyers and
certainly not sustainable and connected to serious export orders.
Thirdly, the training set up at Dignity DTRT (100 machines) is the only facility where sewing
machine operators can learn the various sewing skills14 needed to meet mass volume
international buyer orders. Dignity DTRT and DTRT Apparel US management would going
forward have no problems in making this unique facility available to train workers for other
apparel manufacturers in Ghana, saving COTVET the considerable cost of setting up their own
training facilities for the industry (building cost, sewing machines of various types for minimum
of 4 mass production lines, expat technical staff, accommodation and meals, return flights etc
etc).15
The second major challenge is EDAIF funding. I understand that Q4 financial year funds run low,
although with changes, proposals for funding were submitted some time back. It appears there
are reserve/emergency funds still available, but that can only be triggered by special decree.
DTRT Apparel US has in good faith provided the finance for machinery and working capital for
training, running well in excess of $ 1 million to-date, but are/have run out of shareholder
funding.
The Dignity DTRT Apparel garment project is now in serious jeopardy if COTVET and EDAIF
funding support are not provided sooner than later.
The demise of this company, and possibly followed by Lucky 1888 (unable to meet efficiency
targets) would deal a serious blow to Ghanas efforts to grow its apparel industry and export
targets set/aimed for.
It would more than likely also mean the end of any future direct FDI or JV FDI as overseas
buyers and potential manufacturers willing to relocate are watching Dignity DTRT Apparel
developments with interest.

Some of the sewing operators need to be multi-machine trained, so that when a sewing operator using one specific
type of machines is absent, they can take over to avoid the entire production line of say 30+ machines coming to a standstill.
15
Note should be taken that the Wold bank has funded training centers for apparel sewing skills in countries like Lesotho
(two centers). Within a year, both had run out of funds as apparel manufacturers were not interested in taking on staff
that only had the rudimentary sewing skill. They preferred to train in-house. Both training centers have subsequently
closed.
14

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GOING FORWARD SUGGESTED/RECOMMENDED COURSE OF


ACTION
1. Evaluate options that could trigger the immediate release of the first tranches of EDAIF and
COTVET funding requests from Dignity DTRT to ensure this company can continue going
forward and reach its intended 2014 training/employee targets and machinery installed to
expand. In Q1 2015, evaluate their second tranche of funding requests.
2. Should current COTVET rules/regulations not be able to accommodate the way
international companies train their workers in-house rather than through a third party, may
need to evaluate a training subsidy scheme, that for a 4 to 6 months period would pay the
company 1.5 x the wages paid to trainees (as done by some of the other African countries),
for each batch of trainees.
3. Evaluate which factory shells could be made available for occupation in Q1 2015 by Lucky
1888 at the Tema Garment Village and for Dignity DTRT in the Accra EPZ Garment enclave
(for latter building occupation rights handed over, but current occupant reluctant to remove
machines).
4. Evaluate what additional factory shells could fairly rapidly be made available for prospective
garment manufacturers evaluating Ghana as potential manufacturing base16.
5. The Tema Garment Village factory buildings look dilapidated and are in need of
maintenance. The tarred access road is also full of pot-holes. Although minor issues, there is
nothing worse than buyers and prospective investors going to the Tema Garment Village
and seeing and feeling a run-down industrial site or hit potholes while traveling there. Ensure
water availability is restored to the factory buildings. A prospective investor or buyer
watching water having to be trucked-in is going to wonder what is going on. Water
availability is also going to be crucial for any potential investor that needs a wash-plant (adds
value to the garments being exported).
6. On the basis that Lucky 1888 and Dignity DTRT are now bedded-down and buyers and
manufacturers are seeing AGOA exports from Ghana climb, evaluate the need for another
industrial estate with 8 to 10 factory shells (more appropriately sized as discussed earlier)
that would then enable the new direct FDI and possible JV FDI to finalize location/relocation
prospects. Wrapping the two lead firms in blankets (cotton wool??) and looking after their
every need is going to see them become strong advocates of encouraging other factories
(and buyers) to come to Ghana. There is nothing worse than a potential investor being told
that GoG will do everything possible for you to invest, but once invested you are on your
own. This Aftercare Service17 is a critical part of sustaining investments going forward. This

The international apparel manufacturing industry is known for its have machine, will travel philosophy. Once decided
to move, they need immediate occupation, where they can plug in their machines and start training and production for
cash-flow purposes.
17
This is for example where some countries in Africa have lost many investors. The investment promotion bodies made
all the right noises. Once signed on, they paid lip-service to any of the investors needs.
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should be a dedicated division, either within the Investment Promotion Authority, Free
Zone Board or directly under MOTI.
7. Discuss with current lead firms (now that their needs have been addressed) who they
would recommend to possibly relocate their factories (although apparel manufacturing a
worldwide industry, it is actually quite small they talk to one another as do buyers)18.
8. Draw up a target market of investor profiles and go on an investment promotion road
show, armed with all necessary usual investor information needs (no tax on equipment
brought in for manufacturing, X year tax holiday etc) but equally important factory shell
availability, per m2 rental costs usually subsidized, training incentives etc. Analyse the
investment incentives offered by other countries (not just in West Africa), as Ghana is
competing with Ethiopia, Kenya, Lesotho, Tanzania etc)19.
Based on current lead firms being fully occupied (operating at max capacity), evaluate the trickle-down
effect to the next layer of Ghanaian garment manufacturers with 150 to 300 machines, e.g. Sleek
Garment Exports, Precious Garments, Rim-Artex etc (operational, but firing on very few cylinders) that
would be in a position to be initial outsource partners to build sustainable capacity20.
Analysis of next layer of companies machinery park, product portfolios, previous export
experience, technical team in place or not, potential FDI JV partners, CM/CMT of FP
capabilities21 (Trade Hub is also busy with this). This would include the likes of Nallem Clothing
(looking to acquire more machines), KAD Manufacturing, possibly House of Damaris (latter
somewhat small for mass production) etc
Based on this, analyse best potential buyer target market in the US by garment type and local
companys capabilities (Nothing worse than miss-matching buyer needs and manufacturer
capabilities)22.
There are a number of other issues that still need to be addressed (such as, but not limited to, multientry visas for some key expatriate management).These can be addressed at a later stage. However, the
Trade Hub strongly believes that if MOTI and its Government stakeholder partners in the apparel value
chain can address the key issues set out, the GoG will see a major apparel export driven industry in
place within the next 2 to 3 years, if not earlier23.

Should MOTI and its other Government stakeholders be able to rapidly address the issues mentioned so far, The Trade
Hub Apparel Team can assist MOTI with some of these tasks
19
Again, the Trade Hub Apparel Team would be more than willing to assist MOTI in these endeavours should the
investment climate have become more business friendly, by unashamedly looking after the needs of the two lead firms.
20
Note should be taken that whilst Lemdor (roof leaks and no connection from transformer to factory) is not
operational, as per Oakbrook, few investors will evaluate an idle factory that has neither technical team nor sewing
workers.
21
CM = Cut, Make CMT = Cut, Make, Trim and FP = Full Package
22
This is where the Trade Hub could, through its Apparel Team expertise, be of assistance.
23
There are already apparel manufacturers that have made relocation enquiries to the Apparel Value Chain Advisor, but
can as yet not advise positively and have been asked that plans temporarily be put on hold.
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Program for Expanding Apparel Exports, Short Technical Assistance Performed in October, 2014.

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Program for Expanding Apparel Exports, Short Technical Assistance Performed in October, 2014.

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