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Inside Fine Spinners: Spinning Uganda’s Cotton to European Garment Stores

Beatrice Atim, 21, a student at Kampala International University, lost her father to prostate cancer on March 27, 2020.

She was not able to bury her dear parent due to travel restrictions imposed by the Health Ministry to prevent further spread of Coronavirus.

“My dad’s death was a double tragedy for me because he was paying my tuition and footing all my bills,” says Atim.

“I decided to share a room with my friend as I stared down on a future without education. But luck struck when my roommate told me about employment opportunities at Fine Spinners (a textile manufacturing plant in Uganda),” she told ChimpReports on Monday morning.

While several companies across the country including the wealthy Nice House of Plastics and Hima Cement laid off thousands of employees as a cost-cutting measure in the wake of the pandemic, Fine Spinners hired an extra 600 workers.

Atim now says she has already saved enough money for her tuition if the Universities are reopened for business.

The Story of Fine Spinners

In 2014, Government handed over the premises and assets formerly owned by Phenix Logistics to textile manufacturers Fine Spinners in bid to boost the factory’s textile production and further add value to Uganda’s cotton.

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Phenix Logistics, which was previously United Garments Industry Limited (UGIL), collapsed in 2011 due to poor management by investors and accumulated debts including salary arrears for about 200 workers amounting to over Ush 600 million and Ush 5bn in NSSF benefits.

Jas Bedi, the Director of Fine Spinners Uganda, received the keys and asset register from State Minister for Micro Finance Haruna Kyeyune Kasolo.

Six years down the road, Fine Spinners, which was granted a tax holiday, has created 18,000 jobs in a country where majority of the youth are unemployed.

“Before the COVID-19 pandemic, we were employing 1,200 people. But due to increased demand for masks, we increased the number of workers to 1,800. These are directly employed by Fine Spinners,” said Nitin Arora, the company’s Country Director.

Cotton was introduced in Uganda by the British in the early twentieth century, perhaps simultaneous with the introduction of the crop into Sudan and Kenya.

Since then, cotton industry has evolved and undergone through many institutional and policy changes. During the 1960s, Uganda was Sub-Saharan Africa‘s largest cotton producer. However, political instability and poor policy choices of the 1970s led to the sector‘s precipitate decline.

While attempts to revive the sector with lending operations during the 1980s failed, policy reforms combined with a lending operation and high cotton prices revitalized the sector in the 1990s.

The sector continued to lag behind its full potential due to low quality of cotton, lack of domestic textile industry, and low use of purchased capital inputs due to lack of rural credit as the key constraints.

Several textile companies miserably failed to thrive in the Ugandan market due to failure to control the entire value chain – from growing cotton to exportation of ready textiles for the foreign market.

Spinning Uganda’s cotton to Europe

The entry of Fine Spinners in the Ugandan market six years ago appears to have turned around Uganda’s cotton industry in terms of job creation, value addition and promoting the country’s quality of cotton on the international market.

NITIN (R) showing bales of Ugandan cotton bought from rural farmers

Fine Spinners supports the growth of cotton by rural farmers in Kasese, western Uganda and Bukedi.

“Production of cotton is quite variable due to various factors including weather conditions,” said Nitin. “But Uganda has a favorable climate for cotton growing. That’s why we relocated our machines from Kenya to Uganda. There is abundant and sustainable supply of cotton throughout the year in Uganda.”

Asked how much cotton Fine Spinners buys from Ugandan farmers, Nitin responded: “We buy about 12,000 bales of cotton per annum. (Each bale weighs 200 kilograms). Mind you, each bale costs Shs 1.4m. 17,000 farmers rely on us to buy the cotton from them.”

This means, on average, Fine Spinners buys cotton worth Shs 16bn per year from rural farmers. This money goes directly to farmers, boosting their morale and assuring them of a consistent market for their produce.

“It’s a mutually beneficial partnership because we are assured of cotton stock throughout the year and farmers are assured of a ready market from us,” said Nitin.

Fine Spinners processes cotton into final textile products ready for the market
The cotton is blended and spun into yarn

Chimp Corps toured the $40m factory in Bugolobi, Kampala where thousands of bales were stored in one of the warehouses at Fine Spinners.

Technicians took us through the process of turning raw cotton into textiles ready for domestic and foreign markets.

The cotton used by Fine Spinners is predominantly grown in the West, where, assisted by leading development partners, the company mentors its farmers in sustainable cotton agriculture.

At harvest, the CMiA-branded lint bales are transported to the Fine Spinners facilities in Kampala to be blended and spun into yarn.

The knitting and dying processes meet exacting international standards, as do fabrics, which are subjected to rigorous retailer-specified testing regimes.

COVID Shock

As the COVID-19 pandemic spread human suffering, damaging the global economy and disrupting people’s lives, the garments industry was not spared.

Quarantine measures, closure of retail stores, illness, and salary reductions have suppressed consumer demand.

At the same time, this highly globalized sector is also struggling with severe supply-side disruption; as workers are told to stay at home, supply chains grind to a halt and factories close.

In the European Union, the textile and apparel sector is forecast to face a potential 50 per cent drop in sales for 2020.

Major brands have been forced to close stores in several countries and have subsequently already faced substantial drops in sales worldwide, a situation which is expected to continue to worsen over coming weeks.

For instance, Adidas sales in China fell by 80 per cent between January and February 2020, with the sportswear giant forecasting a sales drop for China of US$ 1.13 billion for the first quarter of 2020.

Some of the modern machines used by Fine Spinners
The textiles are washed and dried using machines
Some of threads sold in the East African market by Fine Spinners

Ralph Lauren warned that global sales could drop by as much as US$ 70 million.

Gap expects to experience a first quarter global sales hit of around US$ 100 million; and Inditex has closed 3,785 stores in 39 markets – over 50 per cent of its stores – with combined store and online sales falling by 24.1 per cent in the first half of March 2020.

Fine Spinners was selling Uganda-made textiles especially t-shirts to three international brands – s. Oliver, Best Sellers and Bonprix.

However, the COVID-19 pandemic led to the temporary closure of Best Sellers and s. Oliver.

Fine Spinners, whose 70% of its products are exported to foreign markets, is now supplying only Bonprix.

“Best Sellers advised us to wait until the situation improves. These brands have outlets across the world where Uganda-made textiles are sold. If they reopen, we will supply them again. We are taking Ugandan products to as far as Russia,” said Nitin.

“In Europe, we sell Uganda-made t-shirts to brands at $3 each. These brands will sell the same t-shirt for $25.”

Fine Spinners is the only garments factory in Uganda producing 100% cotton products to the world’s leading retailers and brands.

Other factories, have more of polyester than cotton for their products.

A worker irons clothes before being packed for export
A worker in the packaging section counts the number of shirts packed for export

Inside Fine Spinners are thousands of workers on top notch machines processing raw cotton to finished textile products.

Girls in their mid-twenties could be seen knitting clothes and applying the Government of Uganda (GoU) stamps on masks procured by the Health Ministry.

“We invested in very expensive machines for quality purposes,” said the thin country manager, Nitin.

“We must avoid variance in colour and assure quality of the product throughout.”

Atim, and her colleagues, who had just returned from lunch provided by the company, could be seen packing t-shirts made-in Uganda for the European market.

Exports

According to the Agriculture Ministry, cotton production increased from 151,071 bales of lint in 2016/17 to 201,841 bales in 2017/18.

“As a result of the improved production of cotton in the country, its contribution to household incomes has risen from about UShs136 billion in 2016/17 to Shs 187 billion in 2017/18. Lint exports have also increased from about $ 39 million in 2016/17 to $ 49 million in 2017/18,” said Agriculture Minister Bamulanzeki Ssempijja.

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