New Investment to Lift Cotton Transformation Ceiling
Monday, December 05, 2011
By Divine Ntaryike Jr
The Cameroon government is touting fresh investments in the cotton transformation sector as a likely output and value-added export stimulus in the coming years. The ongoing government chest-pounding follows the fertile conclusion of a US$ 2million loan deal last November in the industrial hub, Douala.
The Development Bank of Central African States [BDEAC] and the Societe Generale de Banques de Cameroun, a French commercial bank subsidiary agreed to respectively disburse US$ 1,4 million [700 million FCFA] and US$ 600,000 [300 million FCFA] in loans to the private venture hatched by SITRACO [Cotton Industrial Transformation Company].
"At the moment, local processing of cotton is about 5 percent, with the remaining 95 percent exported. The ultimate goal of this initiative is to raise the level of local processing to at least 40 percent and also reduce raw exports," Martin Yankwa, an inspector in the Ministry of Industries, Mines and Technological Development explained.
Cameroon’s feeble textiles industry has been dominated by CICAM [Cotton Industry of Cameroon] since 1965. Skimpy internal demand, weak adoption of modern technology, unfair completion and dumping have discouraged investment for local transformation. In fact, cotton production has slumped by about 50 percent over the last five years from 306,000 tons during the 2004/05 season to 161,000 tons in 2010.
The loan pact heralds hope for the over 200,000 growers scattered across the main production hubs in the country’s northern parts. They are bound by regulations to exclusively sell their harvests to the Cotton Development Corporation, SODECOTON, which provides them inputs among others in return. But the 200 FCFA per kilogram offered them by the state-run corporation has fuelled smuggling of harvests to neighboring Nigeria where rates are far higher.
SODECOTON’s agricultural production director, Ibrahim Ngamie, says during the 2010/11 harvest season, SODECOTON incurred losses of over 14 billion FCFA [about US$ 31 million] as a result of trafficking of some 25,000 tons to Nigeria. With this year’s harvests beginning, Nigerian traffickers are said to be invading the growing areas once again. The Governor of the North Region, Gambo Haman has warned that smugglers will be ranked in the same league as highway robbers and dealt with as such.
Meantime, SITRACO intends to flag off operations at its Douala factory in the course of 2012. General Manager, Robert Kemajou says the total cost of the project stands around 5 billion CFA francs ($10.4 million) at least. The company will reel off rolls of cotton ready for consumption by the textiles industry, as well as engage in the fabrication of medical supplies.
Apart from its use in the fabrics industry, western medicine employs cotton for dressings, bandages, swabs and wool. Scientists say cotton’s role is fast-evolving. Its roots and seeds contain compounds that bear the potential for treating cancer and HIV. Elsewhere, cotton seeds have been proven to be high protein sources. Cotton is also being developed for use in cleaning up oil spills, for electrical conductivity purposes, erosion control and packing material among others.
Addressing a Central Africa Cotton Business Forum in the capital Yaoundé last February, US Ambassador to Cameroon, Robert P Jackson preached the benefits of Cameroon introducing biotechnology in cotton growing. According to him, embracing biotech will increase production and enable farmers reap advantage from record-high world market prices.
India introduced the technology in 2002 and saw production double in 2008, he added. A formal government reaction to the recommendation is still awaited. Cameroon’s cotton output has not only stagnated, but slumped considerably over the years.
The Cameroon government is touting fresh investments in the cotton transformation sector as a likely output and value-added export stimulus in the coming years. The ongoing government chest-pounding follows the fertile conclusion of a US$ 2million loan deal last November in the industrial hub, Douala.
The Development Bank of Central African States [BDEAC] and the Societe Generale de Banques de Cameroun, a French commercial bank subsidiary agreed to respectively disburse US$ 1,4 million [700 million FCFA] and US$ 600,000 [300 million FCFA] in loans to the private venture hatched by SITRACO [Cotton Industrial Transformation Company].
"At the moment, local processing of cotton is about 5 percent, with the remaining 95 percent exported. The ultimate goal of this initiative is to raise the level of local processing to at least 40 percent and also reduce raw exports," Martin Yankwa, an inspector in the Ministry of Industries, Mines and Technological Development explained.
Cameroon’s feeble textiles industry has been dominated by CICAM [Cotton Industry of Cameroon] since 1965. Skimpy internal demand, weak adoption of modern technology, unfair completion and dumping have discouraged investment for local transformation. In fact, cotton production has slumped by about 50 percent over the last five years from 306,000 tons during the 2004/05 season to 161,000 tons in 2010.
The loan pact heralds hope for the over 200,000 growers scattered across the main production hubs in the country’s northern parts. They are bound by regulations to exclusively sell their harvests to the Cotton Development Corporation, SODECOTON, which provides them inputs among others in return. But the 200 FCFA per kilogram offered them by the state-run corporation has fuelled smuggling of harvests to neighboring Nigeria where rates are far higher.
SODECOTON’s agricultural production director, Ibrahim Ngamie, says during the 2010/11 harvest season, SODECOTON incurred losses of over 14 billion FCFA [about US$ 31 million] as a result of trafficking of some 25,000 tons to Nigeria. With this year’s harvests beginning, Nigerian traffickers are said to be invading the growing areas once again. The Governor of the North Region, Gambo Haman has warned that smugglers will be ranked in the same league as highway robbers and dealt with as such.
Meantime, SITRACO intends to flag off operations at its Douala factory in the course of 2012. General Manager, Robert Kemajou says the total cost of the project stands around 5 billion CFA francs ($10.4 million) at least. The company will reel off rolls of cotton ready for consumption by the textiles industry, as well as engage in the fabrication of medical supplies.
Apart from its use in the fabrics industry, western medicine employs cotton for dressings, bandages, swabs and wool. Scientists say cotton’s role is fast-evolving. Its roots and seeds contain compounds that bear the potential for treating cancer and HIV. Elsewhere, cotton seeds have been proven to be high protein sources. Cotton is also being developed for use in cleaning up oil spills, for electrical conductivity purposes, erosion control and packing material among others.
Addressing a Central Africa Cotton Business Forum in the capital Yaoundé last February, US Ambassador to Cameroon, Robert P Jackson preached the benefits of Cameroon introducing biotechnology in cotton growing. According to him, embracing biotech will increase production and enable farmers reap advantage from record-high world market prices.
India introduced the technology in 2002 and saw production double in 2008, he added. A formal government reaction to the recommendation is still awaited. Cameroon’s cotton output has not only stagnated, but slumped considerably over the years.
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