- PVH, known for its brands like Calvin Klein and Tommy Hilfiger, has been a high profile occupant of Ethiopia’s model industrial park in the city of Hawassa.
- PVH has announced that it is closing its facility due to the escalating situation in Ethiopia.
- However it added that its commitments to its third-party manufacturing partners at the Hawassa park will continue.
PVH, known for its brands like Calvin Klein and Tommy Hilfiger, has been a high-profile occupant of Ethiopia’s model industrial park in the city of Hawassa. The industrial park was a reflection of the country’s ambition to achieve a Chinese style success in the sector. Companies like PVH entered Ethiopia due to the efforts of the government in recent years to build a network of industrial parks. The government wanted to set up facilities to boost exports of clothing and footwear. The country’s large population of more than 110 million people and wages lower than even places like Bangladesh and Cambodia had attracted investors.
PVH has announced that it is closing its facility due to the escalating situation in Ethiopia. However, it added that its commitments to its third-party manufacturing partners at the Hawassa park will continue. The company’s decision follows U.S. President Joe Biden’s announcement that he would cut Ethiop the gross violations of internationally recognized human rights. H&M, another significant occupant at the Hawassa park, said that they are also studying the situation carefully.Stephen Lamar, president of the American Apparel & Footwear Association said that if the crisis worsens and if Ethiopia loses AGOA eligibility, companies will increasingly be unable to source from Ethiopia which will hurt Ethiopia’s economy.
Ethiopia’s government has been channelizing resources into the war at the cost of economic growth. The latest World Economic Outlook report released last month has raised apprehensions about the government approach. The International Monetary Fund had omitted projections for 2022 to 2026 for Ethiopia attributing to an unusually high degree of uncertainty.
