Swaziland: Strategic Partner needed for Swazi Cotton Ginnery

On October 2nd, 2010, posted in: Oct 2010 News by

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Description

The Swaziland government has acquired a ginnery for the processing of cotton for local farmers, who serve both the domestic and export markets. The ginnery is currently operational and needs a financial and technical partner to invest alongside Swazi farmers in the following:

  • Financial support for inputs to grow cotton, which will be subsequently sold to the ginnery;
  • Working capital to buy back the cotton from the farmers;
  • Technical support for the ginnery and improving of cotton yields;

The ginnery is located in cotton farming regions of the country.

Project Objectives

The objective of the cotton ginnery is to provide raw materials for the local textile industry, whilst creating a market for local cotton growers. The ginnery is thus a gateway for local cotton farmers. The project seeks to achieve the following:

  • Reduce imports of cotton for local textile companies;
  • Expand cotton production to meet local demand and develop export markets;
  • Enhance cotton production through strong technical partners that would benefit from the available local market;
  • Reduce lead times for companies that source cotton from outside Swaziland; and
  • Improve the livelihoods of communities in cotton farming areas

Vision

To strengthen the textile sector and cotton related industries through the development of a world class processing operation anchored by best practice approaches and a profitable and sustainable farmer base that will impact positively on local communities and private sector partners.

Rationale

Cotton production in Swaziland has declined over the years despite the sector being a source of livelihood to various communities in the country. This has mostly been as a result of increased competition between sugarcane and cotton farming, with sugarcane bringing in more revenue for farmers than cotton. The ginnery was owned by a South African company, which felt that local production had dropped below volumes that would allow them to operate the ginnery. This dealt another blow to the industry as cotton from Swaziland had to be transported to South Africa for ginning.

The local demand for cotton has increased with the entry of textile companies but they have found a very low production base in the country. The Swaziland Cotton Board engaged international development agencies and a strategy for the cotton industry developed. This has seen cotton production expand by more than 200%.

The challenges to-date are:

  • Lack of technical expertise in running the ginnery and improving cotton yields;
  • Lack of finance to purchase the cotton from the farmers; and
  • A growing local and regional market that needs to be staisfied

Duration

Immediate planning in preparation for next crop with 5-year development strategy.

Budget Estimate

Total Budget:  US$13-million
Minimum:  US$4.5-million

Source: TradeInvest Africa   Image: TradeInvest Africa

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