Madagascar - Apparel Madagascar - Apparel
Overview
Madagascar has a sizeable domestic apparel industry, though it is geared almost entirely toward the export market. Under the legislative framework promoting investment in this sector, at least 95 percent of production must be exported in order to receive special tax incentives. As such, opportunities exist in the apparel industry both for American investment and for American exporters, particularly to service the small middle and wealthy classes. Additionally, Madagascar’s re-eligibility for duty free exports to the United States under AGOA, which went back into effect in July 2014, is expected to boost investment in the textile sector. This sector receives the second-largest share of FDI after the mining sector.
| 2013 | 2014 | 2015 (Jan.-May) | 2016 (Estimated) | |
| Total Market Size | N/A | N/A | N/A | N/A |
| Total Local Production | N/A | N/A | N/A | N/A |
| Total Exports | 413,722 | 456,046 | 131,399 | N/A |
| Total Imports | 105,245 | 101,397 | 54,415 | N/A |
| Imports from US | 2,226 | 2,426 | 479 | N/A |
| Exchange Rate:1 USD | 2,308.32 | 2,414.81 | 2738.88 | N/A |
Products covered are within Harmonized Tariff Schedule (HTS) Chapters 60, 61, 62 and 63, covering all textile items from new to second hand clothes and comprised of all types of fabrics.
Sub-Sector Best Prospects
Textile Machinery and Equipment Merchant Wholesalers
Madagascar imported USD 11 million worth of machinery for its vibrant textile industry in 2014. This figure represents a downward trend compared to the level of imports in 2012. However, the recent reinstatement of AGOA benefits that went into effect in December 2014 is expected to prompt renewed growth in the textile sector, which should in turn spur increased demand for new equipment. Imports in this sector are expected to rise.
| 2013 | 2014 | 2015 (Jan.-May) | 2016 (Estimated) | |
| Total Market Size | N/A | N/A | N/A | N/A |
| Total Local Production | N/A | N/A | N/A | N/A |
| Total Exports | 3,204 | 334 | 432 | N/A |
| Total Imports | 5,527 | 11,096 | 8,088 | N/A |
| Imports from US | 16 | 26 | 1,044 | N/A |
| Exchange Rate:1 USD | 2,308.32 | 2,414.81 | 2,738.88 | N/A |
Total Market Size= (Total Local Production+Total Imports) - Total Exports
Data Sources: Total Local Production: N/A
Total Exports: Malagasy Customs (FOB)
Total Imports: Malagasy Customs (CIF)
Imports from the US: Malagasy Customs (CIF)
Products covered are within HTS Chapters 844400,844511, 844512, 844519, 844520, 844530, 844540, 844590, 844621, 844630, 844712, 844720, 844790, 844811, 844819, 844820, 844831, 844832, 844833, 844839, 844842, 844849, 844851, 844859, 844900, 845129, 845130, 845140, 845150, 845180, 845190, 845221, 845229, 845230, 845290 related to textile machinery and excluding machines typically made for household use only.
Currently, U.S. manufacturers have a very low share of this market, having lost their lead to Chinese and European firms. As investment in the sector picks up following the anticipated extension of AGOA by the U.S. Congress, existing firms will seek to expand their capacity while new firms enter the market, created potential opportunities for American suppliers.
Opportunities
There are still no official sellers representing U.S. luxury brands in Madagascar, but there is a demand for such products from the middle and wealthy classes, which is currently met mostly by Chinese and European products.
Resources
For additional information on investment and export opportunities in the apparel sector, potential investors and exporters can contact the EDBM, the Ministry of Commerce, the Ministry of Industry, the Group of Export Processing Zone Companies (GEFP), the American Chamber of Commerce, or other business associations (see Chapter 9). Please also do not hesitate to contact the Embassy’s Political-Economic Section for more information.