Clothing giant looks to Ethiopia as start-to-finish supplier

In the garment industry, it’s not just the cut of the fabric that makes a company’s reputation. It’s also committing to treating workers fairly and operating factories in ways that don’t damage the environment.

That’s challenging in a global business. Most of the shirts and pants Americans buy are made from textiles spun and sewn elsewhere.

Now, with help from PVH Corp. — owner of Calvin Klein, Van Heusen, Izod, Arrow, Speedo, Tommy Hilfiger and other brands — Ethiopia is putting its name and its continent on the clothing map.

PVH and Alaffia, which sells beauty products from Togo, are this year’s winners of the Secretary of State’s Award for Corporate Excellence (ACE), honoring companies for exemplary practices in overseas operations.

The New York-based PVH, formerly known as Phillips-Van Heusen Corp., is the anchor occupant of what is envisioned as a model industrial park in Hawassa, a city 220 kilometers south of Addis Ababa. Three years after breaking ground, factories in the park employ 15,000 workers — almost 90 percent female — with potential to add 45,000 more. PVH established a joint venture to operate one of the factories, its first in 30 years.

The park is environmentally friendly, with state-of-the-art fabric mills and apparel factories running on renewable hydroelectric power and a zero-liquid-discharge treatment plant recycling all the wastewater.

Warehouse buildings (© PVH)
A PVH majority-owned factory anchors the new Hawassa Industrial Park, where mills and manufacturing plants already employ 15,000 workers. (© PVH)

PVH says it chose Ethiopia because of its potential to become “a truly integrated, vertical supply chain … from growing cotton to dyeing fabrics to sewing the final garments.”

PVH first required its suppliers more than a quarter-century ago to adhere to fair labor practices. In Africa, PVH sought both to create a new, lower-cost source of clothing and also to “put our values in place from the get-go,” says Bill McRaith, PVH’s global supply chain chief.

PVH told its suppliers — several of whom have followed it to the industrial park — that “this is a chance for us to learn from everything we wish we had done better in the past,” McRaith says.

PVH imports shirts, pants, underwear and more from 50 countries. McRaith sees potential for Ethiopia and the entire East Africa region to become one of its top seven suppliers.

The U.S. Agency for International Development, Britain’s Department for International Development, the African Development Bank, the Japan International Cooperation Agency and other international players have thrown their support behind the Ethiopian government’s vision for the Hawassa project. PVH is supporting efforts to provide affordable housing and transportation for workers.

Congress’s 10-year extension in 2015 of the Africa Growth and Opportunity Act — which helps African nations access the U.S. market — also convinced PVH to move ahead with its plans, McRaith says.

The first shipment of Van Heusen men’s shirts from the industrial park in November 2017 was made of 82 percent Ethiopian cotton.

Learn more about the second ACE winner, Alaffia, which employs 700 women in rural Togo and contracts with 11,000 others to supply the shea butter, soaps and other beauty products it markets in upscale U.S. and Canadian retailers.