Cellulose Fibre and Sustainable Textiles 2025

Growth Prospects / Ethiopia Resurgent / PART IV Interview

Spotlight: Ethiopia Resurgent

Building Skills, Compliance, and Confidence in Ethiopia’s Growing Textile Industry

The shifting dynamics of global apparel sourcing are bringing new regions to the fore, and Ethiopia is increasingly in focus. Supported by industrial investments and a young, trainable workforce, the country is courting European manufacturers seeking reliable alternatives to Asia. Susanne Pass, Managing Director of Dialog Textil-Bekleidung (DTB), outlines how sustained engagement, infrastructure development, and training can position Ethiopia as a long-term player in the international textile landscape.

Subir Ghosh

29 October 2025

6 minutes

Long Story, Cut Short

Ethiopia’s industrial reforms and youthful workforce continue to attract international investment in textiles and apparel manufacturing.
Despite logistics and compliance challenges, the country is advancing in skills development, automation, and sustainability awareness.
Dialog Textil-Bekleidung views Ethiopia as a long-term, competitive alternative to traditional sourcing destinations like Bangladesh and Vietnam.

Ethiopia’s textile workforce is expanding, supported by new training programmes designed to enhance productivity and quality standards across factories.

Trained Workforce Ethiopia’s textile workforce is expanding, supported by new training programmes designed to enhance productivity and quality standards across factories. International Labour Organization

Africa Sourcing and Fashion Week | Addis 2025

texfash: Ethiopia has often been described as one of the “last frontiers” for large-scale textile and garment sourcing. From DTB’s perspective, what makes Ethiopia strategically important in the global apparel supply chain today?
Susanne Pass: Due to its industrial policy and young population, Ethiopia remains an attractive location for investment and textile sourcing, as well as an alternative to other production locations.

For more than 10 years, the DTB has been visiting the trade fairs in Ethiopia once or twice time a year and is strategically and operationally involved in the development of textile production and sourcing activities in Ethiopia.

The contacts and information from production companies as well as the cooperation with government-related organisations, demonstrate the increased interest in Ethiopia as an emerging alternative to China and Bangladesh in the textile supply chain.

The Ethiopian government has invested heavily in industrial parks like Hawassa and Bole Lemi to attract foreign textile manufacturers. How effective have these efforts been, and what limitations do you see?
Susanne Pass: I think it will take a little more patience and time before more well-known textile manufacturers consider Ethiopia as a production location, but investing in industrial parks was certainly the right decision.

The development in the country is noticeable and we see it grow every year. As most of the production facilities were built in the last five years and there‘s sufficiently space available in the industrial parks, the factories were set up according to the latest production processes and equipped with the latest technology.

This year, we also have a number of high-quality menswear manufacturers from Germany among the DTB membership who have now placed a few orders in Ethiopia on a “trial basis” before going into production. Logistics continues to be one of the biggest challenges, with focus on the import and export process to and from Djibouti.

Ethiopia’s low labour costs have been a big draw, but reports point to extremely low wages and concerns about worker well-being. How does DTB view this tension between cost competitiveness and social sustainability?
Susanne Pass: As in any other business or production site, the well-being of employees and fair pay should naturally be a priority. Average wages are currently among the lowest worldwide, and this needs to be addressed. In addition to many other measures, increasing automation and employee training could help to speed up production processes, increase productivity and adjust wage levels.

In addition, perhaps factory managers should be made more aware of this issue and encouraged to work with relevant organisations on the subject of a minimum wage.

European buyers are under pressure from the EU’s due diligence and sustainability regulations. What are the biggest compliance challenges Ethiopian suppliers face, and how is DTB helping to bridge that gap?
Susanne Pass: The EU's sustainability regulations cover environmental, social and corporate governance issues. Specifically, this means, for example, reducing greenhouse gas emissions, manufacturing recyclable products, but also complying with social standards regarding wages and prohibiting child and forced labour.

This certainly presents some challenges, but also many opportunities for Ethiopian suppliers. For example, we see in some other African countries that textile recycling is a good way to put the country on the path to greater sustainability, but also to promote production.

The DTB can help close this gap by offering training and information, as well as exchanges and conversations with local organisations and Ethiopian suppliers.

Ethiopia’s textile industry relies heavily on imported raw materials, which undermines its competitiveness. Do you see realistic pathways for building a vertically integrated supply chain — from cotton to finished apparel — within Ethiopia?
Susanne Pass: For my opinion there’s a realistic way of establishing a vertically integrated supply chain – from cotton to finished garments and then on to recycling in the country itself – and I believe this is a great opportunity that we should be working on.

Support programmes will certainly be needed to establish and accelerate these structures, but I think that this development is moving forward, even if in small steps. Several fabric manufacturers and those of aditionals (labels, cardboard packaging) have been already represented as exhibitors at ASFW.

With ongoing concerns around water usage, chemicals, and carbon emissions, do you believe Ethiopia has the infrastructure to leapfrog into greener production, or is it more likely to replicate older, resource-intensive models?
Susanne Pass: Ethiopia has some opportunities for clean and renewable energy and already produces energy from water, wind, solar and geothermal power. Training courses could be offered on water consumption and the use of eco-friendly chemicals to avoid the use of older, resource-intensive models and to ensure that current standards are used as a basis.

Susanne Pass

Managing Director

Dialog Textil-Bekleidung

The development in the country is noticeable and we see it grow every year. As most of the production facilities were built in the last five years and there‘s sufficiently space available in the industrial parks, the factories were set up according to the latest production processes and equipped with the latest technology.

Modern factories within Ethiopia’s industrial zones reflect the country’s ambition to align production infrastructure with global manufacturing benchmarks, especially with respect to workers.

Factory Strength Modern factories within Ethiopia’s industrial zones reflect the country’s ambition to align production infrastructure with global manufacturing benchmarks, especially with respect to workers. International Labour Organization

Some global brands have scaled back sourcing from Ethiopia due to instability and reputational risks. How does DTB advise its members to weigh opportunities against these geopolitical and human rights challenges?
Susanne Pass: We advise our members to keep themselves informed about developments in Ethiopia through regular visits and the online events we offer. The DTB itself maintains excellent contacts with various organisations, which will continue to keep us informed about all progress and activities in the industries and services, and we pass this information on to our members.

Ethiopia has faced political conflict, civil unrest, and the suspension of AGOA trade benefits with the US. How do these developments affect Ethiopia’s long-term attractiveness as a sourcing destination for Europe?
Susanne Pass: Political conflict and civil unrest have certainly led to uncertainty, but political conflicts and unrest are also found in many other production locations in the world.

The suspension of the AGOA trade benefits certainly led to a decline in production and in investment, but the development in the country is noticeable and we see Ethiopia as an attractive location for the entire textile chain in the long term.

Many argue that without strong skills training and technology transfer, Ethiopia risks remaining a low-cost, low-skill production hub. What role can DTB play in shaping capacity-building for the local workforce?
Susanne Pass: Trainings and technology transfer will be necessary, but here too we are seeing steady progress, which has been going on for several years now comparing to our first visits.

DTB can help with capacity building on different topics: from material science and basic textile knowledge to training courses on sustainability and quality issues. We currently have around 50 different training programmes available and would be delighted to work more closely together.

Looking ahead, if you were to project five to ten years into the future, do you see Ethiopia as becoming a serious competitor to established sourcing countries like Bangladesh and Vietnam, or will it remain a niche player?
Susanne Pass: Yes I see Ethiopia as becoming a serious competitor in the coming years.

Compared to the past, production has become more flexible in terms of quantities, and smaller production lines have been set up to serve a larger customer base.

The young population is another competitive advantage; foreign organisations offer different training programmes in the textile sector, and the factories themselves train employees on a large scale. Capacity will therefore continue to be expanded in the coming years.

However, the biggest challenge remains logistics, which is very susceptible to disruptions and extended time windows. Urgent action is needed here.

Finally, Ethiopia's textile industry certainly has a successful future ahead of it!

Ethiopia’s Textile Ecosystem

Ethiopia’s industrial park network, including Hawassa and Bole Lemi, anchors its textile expansion, offering infrastructure designed for modern production efficiency and sustainability goals.
The country’s young, trainable workforce provides a demographic advantage, though skill development and technology adoption remain ongoing national priorities for competitiveness.
European manufacturers, including several German brands, are now testing production capacity in Ethiopia through pilot orders before scaling full manufacturing operations.
Persistent logistical constraints, particularly the dependency on Djibouti’s port, continue to slow exports and undermine lead-time reliability for global buyers.

Towards Sustainable Integration

Ethiopia’s renewable energy mix, including hydropower and geothermal sources, presents opportunities to anchor textile production in cleaner, low-emission manufacturing systems.
The EU’s sustainability and due diligence directives are pushing suppliers to strengthen transparency, labour standards, and environmental compliance across operations.
DTB’s ongoing training programmes support knowledge transfer on quality control, social compliance, and sustainability practices within Ethiopian textile clusters.
Vertical integration efforts, from cotton farming to apparel and recycling, could enhance competitiveness and reduce reliance on imported raw materials in the long term.

Subir Ghosh

SUBIR GHOSH is a Kolkata-based independent journalist-writer-researcher who writes about environment, corruption, crony capitalism, conflict, wildlife, and cinema. He is the author of two books, and has co-authored two more with others. He writes, edits, reports and designs. He is also a professionally trained and qualified photographer.

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