VZCZCXRO1102
RR RUEHDBU RUEHPW RUEHSL
DE RUEHBUL #3962/01 3430612
ZNR UUUUU ZZH
R 090612Z DEC 09 ZDK
FM AMEMBASSY KABUL
TO RUEHC/SECSTATE WASHDC 3878
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC 0949
RUCNAFG/AFGHANISTAN COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC

UNCLAS SECTION 01 OF 02 KABUL 003962 
 
SIPDIS 
SENSITIVE 
 
DEPT FOR S/SRAP, S/GWI, SCA/FO, SCA/A, AND EEB/CBA 
DEPT PASS USAID FOR AID/ANE 
DEPT PASS USTR FOR DELANEY AND DEANGELIS 
DEPT PASS OPIC FOR CONSTANTZ AND BEQUAI 
DEPT PASS TDA FOR STEIN AND GREENIP 
TREASURY FOR JCASAL, ABAUKOL, AWELLER, AND MNUGENT 
COMMERCE FOR HAMROCK-MANN, DEES, AND FONOVICH 
 
E.O. 12958; N/A 
TAGS: BEXP EINV EAGR KWMN AF
SUBJECT: OPIC-Funded American Investors Create Jobs and Build 
Capacity 
 
KABUL 00003962  001.2 OF 002 
 
 
¶1. (U) Summary: Capitalizing on "Afghan First" opportunities that 
promote local employment, U.S. investors in Afghanistan are training 
and employing thousands of Afghans, including women, while building 
capacity in numerous sectors.  OPIC-funded U.S. companies have 
registered successes in the apparel industry, beverage production 
and cold storage-frozen chicken imports.  Investors have overcome 
human resource challenges in these enterprises by offering extensive 
training, transportation, meals and other benefits that, in turn, 
have paid off with low turnover rates.  Moreover, risk-savvy 
investors find that by providing their own security and power, they 
are able to keep production constant and costs down.  End Summary. 
 
 
¶2. (U) Overseas Private Investment Corporation (OPIC) Director of 
Portfolio Management Mary Ryan Bequai and Senior Investment Officer 
Jeffrey Constantz visited Kabul December 1-3 to monitor the progress 
of ongoing OPIC projects.  The following vignettes provide a 
snapshot of private investment successes in Afghanistan across 
various sectors. 
 
SAFI APPAREL - TRAINING AND EMPLOYING WOMEN IN KABUL 
- - - - - - - - - - - - - - - - - - - - - - - - - - 
 
¶3. (U) Established in 2005, Safi Apparel has developed a growing 
manufacturing business known for high quality products.  The company 
has a long-term contract, through the U.S. Department of Defense 
(DOD), to provide the Afghan National Army (ANA) and the Afghan 
National Police (ANP) with 14,000 uniforms per month.  Currently, 
the Safi factory is producing only 2,000 uniforms per month, with 
the remainder subcontracted to a local manufacturer.  Safi hopes to 
build enough capacity to fill the orders independently within two 
years.  The factory was established with the intention of exporting 
manufactured goods to Europe, however, the ANA and ANP contracts 
proved to be much more profitable.  (Note: Safi Apparel is not 
related to Safi Airlines.) 
 
¶4. (U) Creating a safe training and working environment for Afghan 
women was one of Safi Apparel's primary goals.  Currently 
approximately 130 women and ten men work in the plant.  The company 
sent ten of the women to India for training two years ago and all 
ten are now working as supervisors for the company.  According to 
the plant's managing director, the company's goal is to hire and 
train 25 to 30 new women every two months until it reaches a full 
capacity of 300 female employees.  He also claimed there has been 
less than one percent attrition since 2005. 
 
¶5. (U) During a recent visit, factory standards appeared to be high 
- the new facility was well lit and heated, clean and sufficiently 
equipped.  The women told Econoff their families were comfortable 
with their working situation and said some had even visited the 
facility to check on the security situation.  Safi provides 
transportation to the factory and a hot lunch for employees in a 
well-maintained cafeteria.  The company is looking for assistance to 
open an on-site day care facility for approximately 100 of the 
employees' children. 
 
EVIAN OF THE EAST 
- - - - - - - - - 
 
¶6. (U) In 2004, OPIC invested almost $10 million in Afghanistan 
Beverage Industry (ABI) originally a juice/water/soft drink 
production facility in Kabul.  Since that time OPIC's investment has 
nearly doubled and the expanded plant now focuses solely on water 
bottling.  According to the South African plant manager, the company 
now employs ten ex-pats and nearly 250 Afghans, many in managerial 
positions.  He stated that 95 percent of its product is purchased by 
DOD through its contractor Supreme Food Services.  ABI has been so 
successful that it has purchased a second, faster production line 
and is considering a third based on projected DOD demand increase. 
 
 
¶7. (SBU) An Afghan line supervisor who has been with the company 
since 2004 told Econoff that people approach him regularly about 
jobs at the plant because of its good reputation.  Employees are 
well paid and proud of the product they produce in this high-tech 
facility, he stated.  The company provides perks such as free 
transportation and food for all employees as well as a Mosque on the 
compound.  ABI's Afghan mechanic workforce are trained both 
domestically and abroad to maintain and repair the German machinery 
on-site.  This investment in training is paying off with near 
self-sufficiency in equipment maintenance and reduced repair costs, 
 
KABUL 00003962  002.2 OF 002 
 
 
the supervisor noted.  According to OPIC representatives, the 
project has been so successful that ABI is ahead on its loan 
payments. 
 
OPIC FUNDS LARGEST COLD AND DRY STORAGE FACILITY IN COUNTRY 
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 
 
¶8. (U) Afghanistan has a severe shortage of cold storage facilities 
for foodstuffs.  OPIC recently funded the construction of a 
multi-million dollar cold and dry storage unit in Kabul to address 
this issue.  The project is the brainchild of the owner of Summit 
Associates, a frozen Halal chicken importer and distributor with 
prior OPIC funding.  The company's owner discovered that lack of 
cold storage was stifling the growth potential of his and many other 
food-processing businesses.  To remove that obstacle, he is building 
cold storage facilities in Kabul and Herat, where he has established 
multiple chicken retail outlets.  While the majority of the cold 
storage will be used to support the owner's frozen chicken import 
business, dry storage space could be rented to support local demand 
or converted into cool or cold storage areas.  The state-of-the-art 
facility, located near Kabul International Airport, will be a 
self-contained secure establishment powered completely by diesel 
generators.  The facility is approximately 20 percent completed and 
will serve as a prototype throughout Afghanistan once completed. 
 
 
COMMENT 
- - - - 
 
¶9. (SBU) These OPIC investments highlight the human resource 
challenges faced in starting a company in Afghanistan, as well as 
the patience and hard work necessary to overcome them. 
Nevertheless, these companies are doing well, despite the 
difficulties.  Although they are partially or fully American owned, 
they fit the spirit of "Afghan First," because they train and employ 
thousands of Afghan men and women, build capacity, and demonstrate 
how modern production technology can be applied in the country's 
emerging private sector.  OPIC funds numerous ventures in the 
country, has committed more than $200 million since 2004, and 
remains on track to commit nearly another $100 million in 2010.  Of 
course, Afghanistan remains a risky investment venue.  We will 
continue to monitor these and other investments to distill best 
practices on how to do business in Afghanistan. 
 
RICCIARDONE