CmiA – Promoting vertical integration in the textile chain

22.10.2015

According to the results of the African Economic Outlook 2015, 60 percent of the African population is employed in agriculture, including the cotton industry. The sector generates around 25 percent of global gross national product. For the most part it is dependent on exports. African cotton supply is increasing, although profits from the cultivation of cotton are stagnating and yields are below average. We discussed this with Christian Barthel, in his capacity as Director of Supply Chain Management of the Cotton made in Africa Initiative (CmiA).

COTTON REPORT: MR BARTHEL, LOOKING AHEAD TO THE COMING YEARS, WHAT IS THE BIGGEST CHALLENGE FOR AFRICA?

Christian Barthel: The population in Africa will triple by 2050. Development through the modernisation of local economies, including the agricultural sector, is essential. Africa exports a large part of its raw materials. This is also the case with cotton. An essential task is to promote a process of industrialisation in cotton growing countries in the direction of downstream products such as spinning and weaving, or even clothing. More production plants near where the cotton is grown would lead to more employment opportunities and sources of income for local people.

IN AFRICA, THE YIELDS PER COTTON ACREAGE ARE STILL COMPARATIVELY LOW. WHAT HAVE YOU ACHIEVED TO MAKE CMIA COTTON MORE PROFITABLE?

Initial studies have shown that the farmers who grow their cotton according to CmiA criteria generate around 20 percent higher yields. On top of that CmiA cotton ensures timely and transparent payment, pre-financing of inputs and fair working conditions in the gins. With our projects we are now working in 10 African countries in the sub-Saharan region. Cotton verified under the CmiA standard is likely to account for just under 25 percent of the supply from sub-Saharan Africa. From 2008 until the end of 2015, CmiA licensed products will have generated license revenue of around EUR 6 million to invest for the benefit of African farmers and their families.

HOW DO YOU ACHIEVE THIS?

On the one hand, we achieve this with the establishment of an alliance of textile companies that integrate CmiA cotton into their chains and thus build solid and long-term trade relations with Africa. On the other hand we provide intensive and permanent training measures in cotton farming or in business management knowledge that will help them control their income and expenditure. In addition, modern, efficient and environmentally friendly farming practices help to reduce their spending, thereby increasing revenues. For example, we focus on measures of watchful, preventative, but also actively engaging pest management. Smallholders learn to distinguish pests from beneficial organisms and to increasingly use biological pest control methods such as molasses traps. Pesticides of the Rotterdam Convention, Stockholm list, WHO classes 1a and b are completely forbidden in CmiA.

IN MARKETING THE PRODUCT, THE CONSISTENT QUALITY OF THE COTTON AVAILABLE FOR PROCESSING PLAYS AN ESSENTIAL ROLE. HOW DO YOU CONTRIBUTE TO THIS DURING CULTIVATION?

At the consumer level, CmiA is perceived as a sustainability label, but in the B2B market it is seen as a product with a certain quality. In the marketing it is clear that we offer hand-picked cotton. It has a staple length of between 27 – 29 millimetres. We therefore offer a quality that is very well suited for use in the mass market. Because the cotton is picked by hand, we recommend that the mills ensure thorough cleaning before their further processing. At the same time, our training in cultivation means that contamination by foreign bodies is reduced. In addition, there are projects of partial mechanisation running at harvest time.

WHAT ARE THE REASONS FOR DOING WITHOUT THE USE OF GMO COTTON?

Firstly, when selling our cotton we are a European-styled initiative and for European consumers, sustainability and genetic engineering are irreconcilable opposites. Many of our demand partners also view the issue very critically. There is still too little known about the long-term effects of the use of GM seed and whether it brings long-term economic benefits to farmers. We have therefore decided to go our own way and to achieve increases in quality and economic yields using other methods.

WHY IS BUILDING UP A TEXTILE AND CLOTHING INDUSTRY ESPECIALLY IMPORTANT FOR COTTON IN AFRICA?

It is important to also process a portion of the cotton produced in Africa in the producing countries themselves, so that added value ranging from raw materials to the final product is created within the continent. This leads to growth, both on the domestic market as well as in worldwide exports. African products could increase their share in international supply chains due to attractive production costs. This is important especially in the sub-Saharan region. The first initiatives for this can be seen in Ethiopia, Uganda and Kenya. With Cotton made in Africa, we can also create a local and readily available sustainable basis for a completely African product. The current challenge is to build up the necessary infrastructure. Here, we are just at the beginning. We assume that the development will take about another three to five years.

WHAT DO YOU CONTRIBUTE IN THE AREA OF SUPPLY CHAIN MANAGEMENT?

We advise partners in the cost-neutral integration of CmiA cotton in their procurement channels and the optimum use of its products. This is done, for example, in the form of training for employees in purchasing departments and in the import offices of organisations abroad. In addition, there is training for spinning mills, textile merchants and textile and clothing manufacturers. This is carried out in relevant procurement markets such as China, Hong Kong, Indonesia, Thailand, India, Turkey, Greece, Bulgaria and also in Germany. Thus, we support companies operatively in achieving their sustainability goals. This helps licensees considerably in saving additional costs. This is very important for use in the mass market. There is no elaborate certification of the entire textile chain in Cotton made in Africa. If companies wish, CmiA can provide full traceability in the textile chain back to the cotton bales. To continue to promote the issue of sustainable raw materials and supply chains, we are an active member of the German Textile Alliance. Here, Cotton made in Africa is recognised as a standard with which companies can put their textile chain on a sustainable basis.

THANK YOU FOR THE INTERVIEW!

With thanks to Bremen Cotton Exchange for making the interview available.

Source: Bremen Cotton Report Nr. 41/42 – 22. October