VZCZCXRO3439
PP RUEHMA RUEHPA
DE RUEHDK #1957/01 2741503
ZNR UUUUU ZZH
P 011503Z OCT 07
FM AMEMBASSY DAKAR
TO RUEHC/SECSTATE WASHDC PRIORITY 9289
INFO RUCPDOC/USDOC WASHDC PRIORITY
RUEHZK/ECOWAS COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0116
RUEHOT/AMEMBASSY OTTAWA 0126
RUEHLMC/MCC WASHDC

UNCLAS SECTION 01 OF 02 DAKAR 001957 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
 
DEPT FOR EEB/TPP/ABT-GARY A. CLEMENTS, AF/EPS, AF/W 
DEPT PLEASE PASS TO USTR - CAROYL MILLER 
DEPT ALSO PLS PASS TO EXIMBANK 
USDOC FOR ITA/OTEXA MARIA D'ANDREA 
 
E.O. 12958: N/A 
TAGS: ETRD KTEX ECON EINV AGOA SG
SUBJECT: SENEGAL'S TEXTILES AND APPAREL PRODUCTION 
 
REF: STATE 114799 
 
DAKAR 00001957  001.2 OF 002 
 
 
SUMMARY AND OVERVIEW 
-------------------- 
¶1. (U) Per reftel request, post provides the following information 
on Senegal's textile and apparel industry. 
 
¶2. (U) Senegal is not a significant global producer of textile and 
apparel products.  In 2006, total textile/apparel exports were USD 
33.9 million, with exports to the U.S. at less than USD 700,000.  In 
2007 there are 15 or fewer companies involved in formal textile or 
apparel production.  Employment in the formal sector is estimated at 
less than 2,000.  Senegal has an estimated 15,000 small tailor shops 
producing garments for local consumers, and approximately 5,200 
informal enterprises producing traditional woven fabric.  These 
sectors employ an estimated 120,000 people.  (Additional sector data 
is presented in para 12.) 
 
¶3.  (SBU) Senegal has very limited domestic production of cloth and 
finished apparel.  Despite being touted by senior GOS officials as a 
strategic sector for the country's "Accelerated Growth Strategy," 
Senegal's apparel and textile producers are inefficient and 
potential growth is hampered by a range of obstacles:  obsolete 
equipment, poor management, overstaffing, erratic and expensive 
electricity supply, difficult access to land, and limited and 
expensive credit. 
 
ANALYSIS OF THE SECTOR 
---------------------- 
¶4. (U) According to Senegal's investment promotion agency, APIX, the 
annual capacity of the Senegalese textile industry is around 8000 
tons for spinning, 20 million meters for weaving and 8 million 
meters for knitting.  However, this capacity is not being realized 
and the majority of Senegal's textile and apparel factories are in 
dire straights.  There are 5 major textile companies in Senegal: 
NSTS-INDOSEN and ICOTAF (spinning mill, weaving, dyeing, and 
knitting); SOTIBA and COSETEX (dyeing and printing); and COTOA 
(specializing in heavy textiles such as towels, bed covers and 
linens, and curtains). 
 
¶5.  (U) Work uniforms, scrubs, t-shirts, sportswear and towels are 
manufactured at the industrial level.  Almost all fabric for these 
operations is imported from Asia, with higher-end wax fabric 
imported from Europe and Cote d'Ivoire to be printed and dyed with 
traditional African designs in Senegal for sale in domestic and 
regional markets. 
 
¶6.  (SBU) In the past year, orders from overseas customers have 
decreased significantly, and many factories have greatly curtailed 
their operations.  Since the highpoint of Senegal's textile and 
apparel production in the 1980s, 50 percent of industrial companies 
have disappeared and employment in the sector has been reduced by 
more than 60 percent. In the past year, a deal between INDOSEN and 
Canada's Stafford Textiles for new investment capital with an eye 
towards exports to the U.S. apparently fell through. 
 
GOVERNMENT INTERVENTION 
----------------------- 
¶7.  (SBU) The GOS has not taken aggressive measures to revive 
Senegal's existing textile/apparel production potential, or to aid 
the sector in finding new export markets.  Today, Senegal's textile 
sector represents just three percent of the total production in West 
Africa.  It is one of the lowest-performing manufacturing sectors in 
Senegal, despite a longstanding industrial culture in cotton 
fabrication and weaving.  A "national strategy study" for the sector 
was produced in 2006, which included a range of recommendations for 
revamping local industries, encouraging commercial activities, and 
attracting foreign direct investment.  The report's recommendations 
have not been implemented. 
 
¶8.  (U) Senegal's export promotion agency, ASEPEX, is reportedly 
developing an incentives strategy for the apparel and garment 
sub-sector to increase its exports, particularly under AGOA. 
However, this effort has not yet been launched. 
 
THE IMPACT OF GLOBAL COMPETITION 
-------------------------------- 
 
¶9.  (U) Senegal's trade relations with China have grown in the past 
few years, and the GOS is not implementing any measures to stem the 
growth of imports of Chinese textile and apparel products.  As a 
result, the local market has been hit hard by these imports, and 
those of other Asian countries, which are free from import 
 
DAKAR 00001957  002.2 OF 002 
 
 
restrictions.  In 2005 (the most recent data available), imported 
second-hand clothes accounted for 70 percent of total clothing sales 
in Senegal.  The sale of imported clothing on the local market has 
undoubtedly increased over the past two years. 
 
¶10.  (SBU) Despite increased global competition, Senegal has not 
responded with improvements to its labor market, which remains 
relatively expensive, legally rigid, and with low productivity 
rates.  Factories do not have effective management or job training. 
In addition, there are no policies or programs in place to deal with 
dislocated workers.  Many former employees from the formal sector 
are moving into small tailor shops and attempting to sell locally 
produced clothing overseas through informal networks of Senegalese 
traders. 
 
IMPACT OF TRADE PREFERENCES 
--------------------------- 
¶11.  (SBU) Any revival of Senegal's textile and production sector 
will require producers to take full advantage of AGOA and European 
trade preferences.  Currently, some small-scale producers of 
traditional or "designer" fabric and clothing have found market 
opportunities in the U.S., which is reflected in the nominal 
increase in value for Senegal's exports to the U.S.  However, larger 
Senegalese producers, or smaller producers collectively, are not 
currently able to meet the potential demand for large quantities of 
exports due to financial and production constraints. 
 
TRADE DATA 
---------- 
 
¶12.  (U) The following data were provided by the Senegalese 
department of External Trade, the National Agency of Statistics at 
the Ministry of Finance, the U.S. Census Bureau and other sources: 
 
-- 2006 Total textile and apparel imports:  USD 57.5 million 
compared to 60 million in 2005, a 4 percent decrease; 
-- 2007 (mid-year) estimates (not available). 
 
-- 2006 Total textile and apparel exports:  USD 33.9 million, 
compared to USD 29 million in 2005, an increase of 17 percent; 
-- 2007 Total mid-year (not available). 
 
-- 2006 Total textile/apparel imports from the U.S.:   USD 5.63 
millions compared to USD 4.81 million in 2005, a 17 percent 
increase. 
 
-- 2006 Total textile exports/apparel to the U.S.:  USD 683,000 
compared to USD 459,000 in 2005, a 49 percent increase; 
-- 2007 (mid-year) estimates (not available). 
 
-- 2006-2007 number of companies in textile industry:  15 formal 
textile/apparel companies. 
 
-- 2006-2007 estimated employment in the formal sector:  less than 
2,000. 
 
-- In 2007 there are an estimated 15,000 small tailor shops in 
garment making and approximately 5,200 informal enterprises in the 
artisan textile sector. 
 
-- In 2007 the estimated total employment for tailors and artisans 
in clothing and weaving is 120,000. 
 
PIAZZA