Jaswinder Bedi ITMF
Text: Eric Johnson/Images: Jaswinder Bedi, David Sucsy

It’s time for Africa – to create nine million new jobs

From cotton to clothing, an entire apparel supply-chain could be located on this great continent. Entrepreneur Jaswinder Bedi is leading the way with a Ugandan project that stretches from farm to finished product.

“If we keep going with it, they will one day be able to compete with cotton growers anywhere.”

Like so many stories from Africa, this is one of great potential disrupted, which after decades of hibernation emerged again.

A half-century ago in Uganda, when it gained independence from Britain, cotton was king. The new nation was Black Africa’s largest producer of the white fibre, which accounted for 40 % of the country’s foreign earnings. A small, but promising textile industry was putting down roots, with factories that gin and spin cotton to thread or yarn that is woven or knitted into fabric that is dyed, cut and sewn into clothes. In time, however, this fine start was squandered.

A 2011 study from an India-based textile consultancy, paints the problem diplomatically: “Political instability and poor policy choices of the 1970s caused a serious decline in the sector.” Put less diplomatically, the textile/apparel sector – like the country itself – was torn apart. In his dictatorial rule of 1971 to 1979, local despot Idi Amin ruined hundreds of thousands of lives as well as vast swathes of the national economy. Finally, by the mid-1980s, Uganda began a period of relative stability that has lasted to this day, but the damage still runs deep. One salient statistic summarises the story, that of national cotton production. While the 2015 total looks likely to rise sharply to 150,000 bales, this will still amount to only about 40 % of the country’s all-time peak of 400,000 bales, reached back in far-off 1969.

Jaswinder Bedi wants to change this. He wants to revive the Ugandan cotton-textile industry by rebuilding it, literally from the ground up, and in doing so set an example for the rest of Africa. Drawing from his experience in neighbouring Kenya (see box), he has launched a company to do this, called Fine Spinners – which is also central to a development project called the Competitive African Cotton Initiative (COMPACI).

Welcome to paradise?

Taken on agricultural fundamentals, the idea of Competitive African Cotton has obvious merits. One of PwC’s own in the country, Assurance manager Cedric Mpobusingye, puts it this way: “Uganda is endowed with a warm climate, ample fertile land and regular rainfall, all of which provide one of the best environments for agricultural production in sub-Saharan Africa.” And he is probably understating the case. The combination of low latitude (right on the equator), high altitude (mostly between 1,000 and 1,500 metres), relative flatness and plentiful water make it a veritable dream-come-true for farmers. Every day the sun and rain are just so, the soil as fertile as a bunny, and because the weather is nearly year-round perfect, crops can be harvested two to three times a year.

Then there is the labour availability. Huge – in a word. A spring 2015 report from a consultancy company gets more specific, noting that “sub-Saharan Africa … is expected to enjoy the most energetic growth in working-age population anywhere over the next 20 years. By 2035, the working population in the region is expected to pull even with China today.” Just by itself, Uganda now has about 20 million working-age residents. By 2025, United Nation’s agencies project, this will climb by a whopping 40 % to around 28 million.

The third plus in the mix is a very favourable trading position with the USA. In 2000, under the then-expiring presidency of Bill Clinton, America granted duty-free status to imports from 39 African states (including Uganda). This is no small benefit, as US tariffs on finished goods can run to as much as one-third of an import’s price. The duty-free deal, which is expected soon to be renewed for another 15 years, allows apparel exporters from East Africa to compete closely with major players such as China and Bangladesh.

All this, says Bedi, bodes well for an African migration, textile style. Already in little over than a century, he points out, the industry has moved from its erstwhile stronghold in the north of England to China-Taiwan as well as to serious outposts in Bangladesh and Vietnam. There is no reason to think the industry will stop moving to locations where conditions are most competitive.

Ginning up jobs

Admittedly, neither Uganda nor East Africa has yet reached that “most-competitive” status. Low employee education, poor infrastructure, government inefficiency and corruption are still major challenges. But promise is shining through, especially with Fine Spinners and COMPACI.

COMPACI’s part of it is an unprecedented coalition of small-holding farmers. Some 5,000 of these – about half of the cotton farmers in Uganda – are being contracted into becoming 21st-century suppliers. For these largely uneducated workers, each with only 2–5 acres (about 1–2 hectares) of land, this is a great leap forward. COMPACI training covers pretty much everything: from how to prepare the land, which seeds to use, how to plant them, to how to thin, fertilise, pesticide and harvest the cotton.

And it must be working, because in the first Ugandan year of operation, per-acre/hectare yields of cotton soared by half. “If we keep going with it,” says Bedi, “they will one day be able to compete with cotton growers anywhere.” After leaving the field, the “lint” is then ginned and shipped onto Fine Spinners’ new factory in Kampala. The $40-million complex employs 1,500 people to tend machines that spin, weave, knit and sew.
By end-2016, their numbers should have doubled. Already product has begun rolling off the lines: in 2015’s third quarter, 300,000 T-shirts a month were shipped out to buyers such as Germany’s Otto Group and Sweden-based Jack and Jones.

Compared to exports from the textile giants, Bedi concedes, this is still small stuff. China exports $30 billion of apparel to the USA, he notes, while Africa now manages only $1 billion. But, being small also gives a form of protection in that “we are still under the radar,” he adds, “we’re not large enough for them to focus their competition on us.” As Africa solves its challenges of training, infrastructure and governance, and as its labour-cost advantage to China continues to grow, this nascent Ugandan success-story could be replicated across the continent – and for a lofty prize. Today Africa produces 6 % of the world’s cotton but exports 75 % of that as a raw material. If all of just that could be processed at home – as Fine Spinners is showing can be done – Bedi reckons it would create 9 million jobs. “If that happens,” he muses, “there will be far less reason for people to keep crossing the Mediterranean [to Europe].” Now that, truly, is an African story of great potential.

A polyester-cotton blend – Jaswinder Bedi

Born and raised in Kenya, but educated beyond secondary school in America and Europe, Jas Bedi can see the world through both developed- and developing-country eyes. “In Africa,” he says rather laconically, “you come to expect the unexpected.”

Certainly he didn’t expect his present position when in 1984 he joined his family’s firm, now called Bedi Investments. What then was a suit factory first expanded to include a textile mill. Since it has spread downstream into clothes manu­facturing, supplying such brands as Calvin Klein, Izod and the Tesco house brand. If a label says ‘Made in Kenya’, there is a good chance it actually was made by Bedi, by some of the 800 manufacturers and seamstresses at a factory in Nakuru, 140 km northwest of Nairobi.

Over the years Jas has taken on a number of broader industry roles, in the Kenya Apparel Manufacturers Exporters Asso­ciation, the East African Business Council, the Kenya Private Sector Alliance and the African Cotton & Textile Industries Federation. From that latter position grew a connection to the Zurich-head­quartered International Textile Manufacturers Federation, of which he currently is Vice President and in 2016 will serve as President.