afrol News, 29 June - The Malagasy textile sector will be provided with a loan of up to US$ 8.5 million by the Washington based International Finance Corporation. The loan goes to the regional giant Cotona.
According to a press release by the International Finance Corporation (ICF), the group will provide "a loan of up to US$ 8.5 million equivalent to Cotona, a fully integrated textile operation in Madagascar and a leader in the region's textile sector."
Over the past 50 years, the sponsors - Groupe Socota Industries - have built a solid industrial base in Madagascar and Mauritius and are among the largest employers in the region, the ICF informs.
According to the statement, IFC's investment "will help Cotona achieve global competitiveness in the international textile market with the aim of developing the 'made in Madagascar' label." Industry accounts for 12 percent of the Malagasy GDP, and textile manufacturing and the processing of agricultural products are the main sub-sectors.
Responding to demands from its international client base, Socota will modernise and replace its obsolete equipment, according to the ICF. The manufacturing of textiles has long traditions on Madagascar, and Socota's equipment did no longer meet international standards.
Although being a main employer, the textile industry has lagged behind in becoming a main export product. Agricultural products still constitute the big bulk of Malagasy exports, coffee representing 45%, vanilla 20%, followed by cloves. Textiles are still not found on the top five list.