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Chairman Cha Min-ho of SHINTS recently gave an interview to BOBBIN JOURNAL, where he discussed the achievements of their Ethiopian factory and the company’s investment strategies in Africa. Below is the full interview.

Q. Can you briefly introduce SHINTS' expansion into Ethiopia?

Since 2014, SHINTS has been operating a sewing factory in the Bole-Lemi Industrial Park in Addis Ababa, Ethiopia. The factory employs 6,000 workers who produce high-quality garments for export worldwide. We plan to hire an additional 1,000-2,000 employees annually, aiming to have 15,000 employees at the Bole-Lemi facility. SHINTS’ short-term goal is to operate a total of 30,000-employee sewing factories in Ethiopia by building another 15,000-employee factory in a different location.

Q. Where are the products from the Ethiopian factory mainly exported, and who are the key buyers?

The products are primarily exported to Europe and Korea. Our main buyers include Decathlon from France, Schoffel from Germany, Mammut from Switzerland, New Balance Kids, and Thisisneverthat from Korea. Before the suspension of the AGOA agreement, we had significant orders from the US, and we expect a surge in US orders once the agreement resumes.

Q. What are SHINTS' objectives and reasons for investing in Ethiopia?

We must consider Africa's vast area, abundant resources, and high population growth rate. Africa is rich in renewable energy resources, including hydro, wind, solar, and geothermal energy, making it a strong investment destination. Korea and Africa need mutual cooperation, viewing each other as partners sharing talents and technologies for a successful future. We believe in discovering a bright future in Africa and will do our best for SHINTS' future there.

Q. Can you briefly introduce the Ethiopian factory?

Since 2014, we have been producing some of the most advanced garments, such as motorcycle gear, high-performance outdoor clothing, ski wear, and down jackets, at our factory in Ethiopia for export worldwide. The factory is located in the Bole-Lemi Industrial Park in Addis Ababa, consisting of five SHINTS ETP factory buildings, dormitories, and a park. The dormitory, designed for 11,000 people, currently houses 6,000 employees. The facilities include a cafeteria for 15,000 people, 17 classrooms, two mini soccer fields, a basketball court, a tennis court, a park for relaxation, and a daycare center for 300 children. We plan to expand to 15,000 employees at Bole-Lemi and build another 15,000-employee factory elsewhere, aiming for a total of 30,000 employees in Ethiopia.

Q. Given the challenges of securing skilled labor, how is the actual operation of the Ethiopian factory? Are there any issues with securing and training skilled workers?

Ethiopia, being the 11th most populous country globally, has abundant labor. However, initially, it was challenging to secure skilled sewers due to the high cost of living in Addis Ababa. Many employees moved to smaller local factories after gaining experience due to high housing costs. To address this, we built free dormitories for local employees, significantly reducing turnover and attracting skilled workers. Currently, about 4,000 employees live in dormitories, and we plan to increase this number based on factory demand.

Q. What are the reasons for SHINTS' expansion into Ethiopia from a long-term perspective?

With a 30,000-employee scale in Ethiopia, we can compete with global sewing companies. Africa's vast land and resources, coupled with a growing population projected to reach 2.4 billion by the 2050s, make it a crucial future market. Africa's abundant renewable energy resources, particularly in Ethiopia, offer significant potential for development. The country's large hydropower projects, like the Renaissance Dam, and untapped wind and solar resources present substantial opportunities. We believe that fostering basic industries, such as local material production, will address supply chain challenges, making Ethiopia a pivotal player in the global garment industry alongside Bangladesh.

Q. With extensive experience in African investments, what are SHINTS' future strategies?

Based on our ten years of experience in Ethiopia, our strategy is to develop basic industries. Ethiopia's garment factories face challenges due to the need to import raw materials, which prolongs lead times and increases costs. However, Ethiopia's high renewable energy ratio and abundant resources will eventually lead to local raw material production. As the demand for raw materials grows, related industries will establish themselves in Ethiopia. If the garment workforce in Ethiopia reaches 5 million, most materials and machinery will be produced locally, strengthening the industry's competitiveness and attracting more companies to Ethiopia. SHINTS aims to leverage Ethiopia's advantages, such as a young, educated workforce with strong English skills, to build a highly competitive garment company.

Q. Many see low infrastructure, regional limitations, low labor productivity, and political instability as obstacles to investing in African garment factories. What are your thoughts on these issues?

We have achieved productivity comparable to Vietnam through dormitory-based skilled labor. Each issue, such as low productivity or political instability, needs targeted solutions. While industrial infrastructure and political instability are challenges for labor-intensive industries, Ethiopia's abundant hydropower ensures a stable electricity supply. Despite political uncertainties, the benefits of low wages and favorable exchange rates outweigh these risks. Government cooperation is crucial in addressing these challenges, and Ethiopia's clean, proactive public officials and government-led economic growth plans provide a supportive environment.

Q. What are the future plans for SHINTS' key factory in Vietnam?

Our Vietnam factory specializes in high-performance products like motorcycle gear and ski wear. We are enhancing our technological competitiveness by producing more advanced products, such as fishing gear, flame-resistant clothing, and specialized workwear. Our factory's line design is optimized for small-batch, high-variety production, making it competitive for customized collections and market-responsive production in nearby countries like Korea and Japan.

Q. Finally, what is your vision for the future of Africa's garment industry?

SHINTS aims to pioneer new industries in Africa with its talented young workforce. African countries seek foreign investments for job creation but are wary of political influence from major powers. Korea, with its advanced technology and respect for African nations, is seen as an ideal partner. Korea must acknowledge its smaller investment capacity compared to China but can overcome this by collaborating with African talent. Viewing Africa as a partner in sharing technology and knowledge is essential for successful investments. With courage, we believe we can discover a bright future in Africa.