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An In Depth Interview with Eyob Bekele of Desta Garments
By Laura Davis | Sun Jun 06 2021
For more pictures from Desta, download our recent Impact Report, and read an abbreviated version of the following story called “Building Community and Industry Despite a Textile Supply Chain Shutdown” on page 17 of the report.
When markets shut down in 2020 and consumers in lockdown across the world no longer ventured to malls to shop for the season’s fashions, the global textile supply chain stalled. Ripple effects were felt hard in countries like Ethiopia, which has been investing for years to grow its textile industry to compete with Asia’s manufacturing hubs.
Desta, the textile company in which the IAN invested in 2015, was no exception to these hardships. While managing the setbacks of orders being delayed and canceled, Desta founder Eyob Bekele took seriously the high risk of potential virus spread in the factory, doubling down on Desta’s commitment to corporate and social responsibility to protect the jobs and safety of more than 1,300 employees and their supporting local communities.
Here’s what Eyob had to say during a recent conversation.
About Eyob’s and Desta’s Experience of the Pandemic...
As soon as the pandemic broke out, the major challenge was the cancellation of orders. The second was the stability of workers. Everyone was nervous about how to be in the work environment. We ended up closing the factory for 2 weeks and then came the government policy that said we could not let go of workers. No terminations were allowed. All of that added up to big challenges. Revenues were done. Workers were not stable. And the government policy said that we had to pay salaries.
As soon as the pandemic broke out, the major challenge was the cancellation of orders. The second was the stability of workers. Everyone was nervous about how to be in the work environment. We ended up closing the factory for 2 weeks and then came the government policy that said we could not let go of workers. No terminations were allowed. All of that added up to big challenges. Revenues were done. Workers were not stable. And the government policy said that we had to pay salaries.
Along with the policy from the government that you were not allowed to terminate jobs, came a policy that said the government was going to be flexible and allow us to use raw materials to produce goods for the local market. The challenge always gives you an opportunity. Because people could not fly, the local market did not have as many resources, materials or products. So that opened up the local markets.
Also, thankfully some of our international orders actually increased. The uniforms business helped us get through. Previously, we had orders 6 months in advance. Order flow was a challenge during the pandemic. And we were no longer able to travel to see customers.
About Desta’s Expansion...
I focused on our expansion in Butajira. We are trying to finalize and organize the Butajira factory. We currently have eight production lines and we are moving to 11. We have a canteen for employees where we make and provide bread and tea. We currently employ 500 in Butajira, making us the largest employer in the area and another 700 at our factory in Addis. This year, we hope to add at least 300 more employees to the Butajira factory.
I focused on our expansion in Butajira. We are trying to finalize and organize the Butajira factory. We currently have eight production lines and we are moving to 11. We have a canteen for employees where we make and provide bread and tea. We currently employ 500 in Butajira, making us the largest employer in the area and another 700 at our factory in Addis. This year, we hope to add at least 300 more employees to the Butajira factory.
We’ve made a long term commitment to Butajira and are working with the community on several fronts. We distributed masks during COVID. We are currently planning to provide clean water to the community along with educational support and health care. We have started, with our sister company, to move into the construction of a 50-bed hospital. During COVID, we provided 20 hospital beds for the current Butajira hospital.
Desta’s COVID-19 efforts...
During COVID, we believe that between the Butajira and Addis factory, we have reached more than 200,000 people and communities with COVID-related education and provided more than 150,000 masks to the community free of charge.
During COVID, we believe that between the Butajira and Addis factory, we have reached more than 200,000 people and communities with COVID-related education and provided more than 150,000 masks to the community free of charge.
Pandemic Learnings...
2020 was a challenge all its own. We had to come up with solutions on a day to day basis. We learned how to survive a pandemic including hand washing training and temperature tests for workers. Some of the health efforts will likely remain with us in our factory health practices. It is still not business as usual. Out of the box solutions have helped us survive with production. Flexibility is important. The pandemic has caused us to think differently.
2020 was a challenge all its own. We had to come up with solutions on a day to day basis. We learned how to survive a pandemic including hand washing training and temperature tests for workers. Some of the health efforts will likely remain with us in our factory health practices. It is still not business as usual. Out of the box solutions have helped us survive with production. Flexibility is important. The pandemic has caused us to think differently.
Video conference and Whatsapp and telephone have replaced the in person sales meetings. We started a virtual trade show. We now do video chats, virtual tours and virtual audits. Nothing replaces face to face, but we have found a way. Also, travel was a big part of how I learned. Limited travel means limited exposure. To be honest the things I know are the things I saw a year ago. I really miss that piece of travel. It’s a big gap for me.
Outlook on the Pandemic in Africa...
For me, I do not believe we have not seen the full impact of the pandemic yet. Whatever is happening in the rest of the world, we are yet to see in Africa. So unfortunately we may feel the impact in a year, and we should be prepared for it. Ethiopia is not only experiencing COVID, it has other challenges with economic impact, including the slow devaluation of the currency. We have to prepare for the worst.
For me, I do not believe we have not seen the full impact of the pandemic yet. Whatever is happening in the rest of the world, we are yet to see in Africa. So unfortunately we may feel the impact in a year, and we should be prepared for it. Ethiopia is not only experiencing COVID, it has other challenges with economic impact, including the slow devaluation of the currency. We have to prepare for the worst.
Commitment to Workers...
One thing we decided is that we need to keep our workers. Maintaining the work environment is key. Our employees are the lifeblood of the factory. It may eat into our profits now, but it is key that workers who have been trained stay with us. That is our priority right now.
One thing we decided is that we need to keep our workers. Maintaining the work environment is key. Our employees are the lifeblood of the factory. It may eat into our profits now, but it is key that workers who have been trained stay with us. That is our priority right now.
Desta’s Vision...
What we have done in 2020, we will continue to do. Our vision is to be the #1 garment facility in Ethiopia, and the preferred partner for garment makers. We continue to be committed to compliance with many different standards. In 2020, we achieved ISO 9000 certification. We are the only one in East Africa with STeP OEKO-TEX certification.
What we have done in 2020, we will continue to do. Our vision is to be the #1 garment facility in Ethiopia, and the preferred partner for garment makers. We continue to be committed to compliance with many different standards. In 2020, we achieved ISO 9000 certification. We are the only one in East Africa with STeP OEKO-TEX certification.
Disclaimer: The information included in this blog is provided as a recounting of the IAN’s interactions with Desta and the happenings at Desta. It is not intended as performance data related to the IAN’s investment in Desta and is not indicative of other companies in the IAN’s portfolio, their social impact or the performance of investments in them. Any discussion of Desta’s achievements or social impact is no guarantee that such outcomes or impact will be realized by Desta in the future, or by other IAN portfolio companies or other investments managed by RENEW, now or in the future.
Renew Capital is an Africa-focused impact investment firm that backs innovative companies with high-growth potential. Renew Capital manages investments made on behalf of the Renew Capital Angels, a global network of angel investors, foundations and family offices who seek financial returns and sustainable social impact. For the latest on investing in Africa, subscribe and follow us at our social links below.
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