Reg Hankey, CEO of Pittards |
The UK’s high quality, high performance leather and leather goods firm Pittards has more than 100 years experience working with Ethiopia. CEO of Pittards, Reg Hankey explains what makes it such an ideal place to do business, particularly in adding value to its raw assets, and why it’s “absolutely going in the right direction”.
What makes Africa so attractive and why did you decide to invest in Ethiopia?
If you go back a decade or two, the whole of the investment excitement was about Asia, and in particular about China, and quite rightly so. When we decided to move some of our production offshore, which was around 2004-2005, we certainly started looking towards China, but we collectively decided that that phase had passed. As a manufacturer for the future, we took a view that we should be closer to where the commodities are, where the raw materials are, rather than flying the commodities all over the world.
The Prime Minister of Ethiopia at that time, Meles Zenawi, had a very clear vision of the road out of poverty. He wanted added-value development for his country and for it to stand on its own two feet. Our company had been trading with Ethiopia for over 100 years and we believed that instead of following the trend and dashing to China, it would be better to back ourselves into our supply chain and come to Ethiopia. Our corporate strategy was therefore very goal-aligned with the development strategy of Ethiopia as a growing nation. We were in a position to take our business to the next stage of development within Ethiopia.
Beyond the strategic opportunity, there were also the practical aspects. For example, there are generally no import duties for products made in Ethiopia that are exported to America or Europe. This is quite significant when companies are looking for improving margins in the very large consumer markets like the USA and Europe.
Further to this there was the language to consider. The vast majority of school children, graduates, and citizens in Ethiopia speak excellent English as it is taught as the second language. Comparing Ethiopia with the great China, which is a fantastic powerhouse for the world, in-depth communications in English seem to be easier, as in China it can be quite difficult. The smaller time difference between Europe and Ethiopia also makes communication much simpler compared with Asia.
Looking strategically at the workforce, there is a growing population in Ethiopia that is now over 95 million, and more than 50% are under the age of 18. There are a growing number of people who are seeking employment at all levels, including a very high proportion of graduate-level people. Some years ago the government started to develop programs to provide a high level of education to the population of Ethiopia. That means we can hire well-educated people into our management teams. The combination of all of these factors make Africa a happening place and in particular, Ethiopia.
Continue reading the interview on The Worldfolio
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