The UAE textile industry is the country’s largest trading sector after oil, generating $17.5bn in revenue and creating numerous jobs, according to one trade expert, who also highlights the trend towards an ever increasing emphasis on Africa for both labour and customers.
As a trading hub, the UAE has become the world’s fourth largest trading centre for fashion and apparel, with 150 apparel manufacturing companies exporting materials and finished products more than 50 countries across Africa, the Middle East, South Asia and Europe.
Midhat Abu Ghazaleh, CEO of Abughazaleh Trading Company (ABCO), which has been trading in the UAE since 1975, noted that the textile industry in the UAE, “has a diversified product portfolio. Some of the textiles produced in the country are car seats, tents and curtains, in addition to clothes. Knitted fabric is the most in demand in UAE, accounting for around 49.7% of the market, followed by woven fabrics.”
However, rising production costs have placed a strain on the industry and are making it difficult to compete with low-cost centres in China, India, Bangladesh, Kenya and Ethiopia – forcing UAE manufacturers to in turn look to these countries to outsource their operations.
“All these factors have encouraged the apparel industry owners to re-locate their factories from the UAE or to refrain from investing in apparel factories which require large numbers of staff and labourers,” Abughazaleh added, in comments to Arabian Business.
“Our group will open an apparel factory in Ethiopia in 2015 and we will roll out additional sales offices in Africa in 2015 as well. Africa is an emerging market – is disposable income and people want to buy merchandise, which we can supply to them at reasonable prices.”
Abughazaleh is hoping that will help meet his goal of increasing the company’s production by 50%.
Raju Shroff, MD of the Texmas-member Regal Group, explained that a many countries simply don’t have the facilities to import large quantities of textiles, which is where Dubai’s “re-export and financial hub status” comes into its own with regard to Africa.
He noted: “Dubai traders are stockists, so they usually have these things available. People can buy smaller quantities than through direct import.”
Dubai’s Textile City, which is operated by the industry group Texmas, was formed in 1990, with the assistance of the then Crown Prince HH Sheikh Mohammed Bin Rashid Al Maktoum.
Abu Ghazaleh added: “Times have changed and new sources of production are coming up in places, particularly in Africa, where nobody expected ten years back due to the abundance of a cheap labour supply.” And no doubt now, Africa’s rising middle class is also a growing consumer.