TRALAC - Trade Law Centre

Uganda: Tristar Apparel Gets $20m Boost in Joint Venture Deal

Monday, 13 March 2006

Source: The Monitor (Kampala)

ISIS Pacific Capital, a US-based company is set to invest $20m (about Shs36.2b) in Uganda's apparels sector.

Meeting President Yoweri Kaguta Museveni at State House, Nakasero on March 9, the company's Chief Executive Officer, Mr James Langford said the firm plans to inject the money in Uganda to boost the country's textile sector.

According to the press statement, Langford said ISIS Pacific Capital was making preparations to make a joint venture in the textile industry with Uganda's Apparels Tristar Ltd.

The textile expert said the funds would help in adding value to Uganda's textile products for export.

Museveni reportedly said the investment would drastically improve the quality of the country's high quality cotton, as an ingredient of the textile industry.

Finance Minister Dr Ezra Suruma, Tourism, Trade and Industries Minister Daudi Migereko and Apparels Tristar (Uganda) Ltd Managing Director V. Kananathan attended the high profile meeting.

Kananathan said the venture, which is expected to kick-start in six months time would help in reducing production costs.

"We have been depending on imported fabrics but we are happy that this huge investment would enable Uganda produce her own fabrics hence reducing the hefty expenditure incurred in importation of the materials," he told Daily Monitor in a telephone interview on Friday.

Daily Monitor has learnt that Tristar Apparels has been spending $120,000 on 20 containers of fabrics imported monthly. Uganda imports most of the fabrics from China and Pakistan among other Asian countries.

Kananathan said such a sharp cost cut coupled with more efficient machinery to be imported from the US would automatically increase the company's productivity and profitability hence creating more jobs for the local population.

It is a provision under the African Growth and Opportunity Act that developing countries can have quota free access to the US market. This means, for a country like Uganda to compete effectively, it should have local capacity to produce her own raw materials and add value to them.

"We are sure that ISIS Pacific Capital will help our economy, especially, the textile sector to have vertical integration to realise economies of scale," Migereko said, adding that, "the venture is one significant step that would see the country increase its competitiveness in world trade particularly under the AGOA arrangement."

The joint venture comes in the wake of Uganda's continued underperformance in the textile sector, the recent 2005 AGOA report has indicated.

Six years since the inception of the trade opportunity, Uganda's performance has been least impressive in East Africa.

The US-Sub-Saharan Africa Trade data authored by the US Trade Commission puts Uganda last after Kenya and Tanzania. Uganda made total earnings from exports to the US worth $25.8m in 2005, down from $34.8m in 2003.

Read a related article here



“ Latest AGOA Trade Data currently available on AGOA.info


Click here to view a sector profile of Uganda’s bilateral trade with the United States, disaggregated by total exports and imports, AGOA exports and GSP exports.


Other regularly updated trade statistics on AGOA.info include: (click each link to view)

  • AGOA-Beneficiary Countries’ AGOA and GSP Trade Aggregates

  • AGOA Trade by Industry Sector

  • Apparel Trade under AGOA’s Wearing Apparel Provisions

  • Latest Apparel Quotas under AGOA

  • Bilateral Trade Data for all AGOA-eligible countries individually.