New Investment Opportunities in Clothing & Cement Industries [Archives:2001/29/Business & Economy]

July 16 2001

Mahyoub Al-Kamali
Private sector investment in the cement and clothing industries is of the most important fields in Yemen. Statistics show that 75% of the people’s needs in clothes and 50% in cement are being imported from foreign markets, though there are three factories for cement, producing million and a half tons. Besides there are two textile and weaving factories which cover only 25% of the people’s clothing needs.
Economic feasibility studies indicate that the involvement of the Yemeni or foreign private sector in the clothing and cement industries will ensure handsome profits as the necessary raw materials are available including cotton. Besides, ores for cement is available in sufficient quantities in the Yemeni mountains.
Collection of Imported Clothes in Yemeni Market
It is obvious that the Yemeni markets are full of imported ready-made clothes. This has made the people of Yemen enjoy a lot of choice in their clothes. The national costume seems to have taken a back seat among the wide range of clothes available in the market. Most of the expensive clothes are made in Europe, Pakistan, Japan or India. The Yemeni textile and weaving industry is still very traditional.
Since a long time, the private sector has been investing in several fields including soap, plastic, paper industries, dairy, biscuits, cereal mills, tourism, trade complexes, and tobacco industry.
Yemen’s negotiations with the WTO has facilitated businessmen and investment companies invest in other fields to compete in the local and foreign markets.
The private sector in Yemen faces a wide range of new challenges. It has to explore investment opportunities in new fields to cover the needs of the people and to promote export of the new local products to the foreign markets.
Private Sector Racing Against Time
Private sector in Yemen is racing against time to invest in clothes and cement. Hayel Saeed Group of companies, considered to be the biggest investment company in the country, has come to realize that investment in these two sectors will certainly enhance production, cover local consumption and increase exports.
According to sources in HSG of companies the group plans to mobilize their capital in cement, ready-made clothes, and housing industries which are of prime importance and can provide employment to a great number of employees.
Sources also indicate that HSG of Companies have endorsed the establishment of two factories for ready-made clothes in Taiz and Aden. The company is conducting the feasibility study for establishing a cement factory. It seeks the participation of local and foreign partners. It also seeks the support of local and international institutions to make this project a success.
Cement Industry Successful Investment
Industrial studies reveal that investment in the cement sector is of the most strategic importance as the raw materials necessary for cement are available in huge quantities in Yemen. Besides, 50% of the demand for cement in Yemen is covered by import from Jordan and other countries.
What proves the increasing involvement of the private sector in investment in cement sector is the government withdrawal of privatization of the three cement factories: Amran, Bajel and al-Barh mainly because of the high profits they make and the high production.
In accordance with a study conducted by the government in collaboration with the WB, the cement industry does not face any slump in marketing as evident from the fact that the three factories have increased production during the last year by 100% which has reached 1,5 million tons.
It may be concluded that there are good prospects for the private sector to invest in the clothing and cement industries for the twin benefits of meeting the needs of the consumer market as well as promoting exports in this field.