Manufacturing group expands footprint
TRADE and Industry Minister Joshua Setipa yesterday signed a US$20 million (about M280 million) agreement with the Nien Hsing manufacturing group for the construction of two knit apparel factories at Tikoe Industrial Park over the next three years.
The Memorandum of Understanding (MOU) which was signed with Nien Hsing Group representative, Alan Han gives the company permission to erect a 13 000 square metre factory building for manufacturing synthetic knit apparel at Ha Tikoe Industrial Park.
Construction is expected to commence immediately and result in the creation of 4 000 new jobs.
The group from the Republic of China, currently operates three jeans apparel factories, one denim mill, one spun yarn mill, and one corrugated paper sheet factory in Lesotho and employs 11 000 workers in its factories at the Thetsane Industrial Area in Maseru.
The products are exported to the United States of America under the African Growth and Opportunity Act (AGOA) trade preference.
“Nien Hsing Group would like to announce that we have completed the MOU of our new investment project at Ha Tikoe Industrial Park with the Ministry of Trade and Industry at Formosa Textile Today,” a statement released yesterday by the group reads.
The statement further indicated that implementation of project would be divided into two stages as it involved the construction of two knit apparel factories over the next three years.
“The total investment amount for this project is estimated at US$20 million and two knit apparel factories will be built at Ha Tikoe Industrial Park in three years.”
The knit apparel move is a new venture for the company which assessed several production bases before settling on Lesotho due to the good support from government and people of Lesotho.
“Earlier this year, the Board of Nien Hsing concluded this knit apparel project and various countries were evaluated, including Ethiopia, Tanzania, Kenya, Bangaladesh and Haiti.
“This new investment project was finally decided for the mountain kingdom mainly by considering the constant support from the governments of Lesotho and Basotho to Niene Hsing Group since 1989,” the group noted in its statement, adding it was optimistic the country would overcome its governance challenges.
Meanwhile, Mr Setipa said the construction of the knit apparel factories was a welcome development as the country had to import knit apparel at a significant cost.
“We are finally going to have what we have been longing for with the construction of the knit fabric factory in Lesotho and we will no longer import the material,” Mr Setipa said, adding the investment showed that the company was confident Lesotho’s exports to the United States market were safe.
There have been concerns that Lesotho could lose its AGOA eligibility due to the slow pace of reforms aimed at addressing security issues as well as the rule of law.
He said Nien Hsing was the only investor to have initiated an engineering internship programme to foster transfer of technical skills to local graduates.
The Nien Hsing Textile Co. Ltd, (the parent company of Nien Hsing Group) is a public company listed on the Taiwan Exchange Corporation and is major textile manufacturing group around the world.
It has production bases in Taiwan, Vietnam, Cambodia, Mexico, Nicaragua and Lesotho which collectively employ an estimated 30 000 workers.