Investment opportunities
While Lesotho is very strong in the clothing, textile and
footwear sector, there are also investment opportunities in the following
emerging sectors:
Knitted Fabric Mill
The textile
and clothing industry has grown considerably over the last five years. In this
period, investments into jobs, particularly in the clothing and textile sector
has increased leading to creation of more new jobs.
This industry
has made a mark in international markets, however the current trade and
investment climate, the strengthening of the rand, the expiration of the
Agreement on Textile and Clothing as well as the impending expiry of the third
county fabric under AGOA, point to a need to ensure local access to all the raw
materials and accessories required by the sector. Thus there is a need for
investment in knitted fabric mills, trims and finishing
facilities.
Leather and Footwear
The leather industry in Lesotho is at
its infancy stage. The country has three shoe manufacturing factories despite
the fact that shoes qualified for all the benefits under AGOA. The three firms
produce mainly for export while a large share of the domestic market has to rely
on imports from South Africa. Foreign direct investment in this sector would
give a boost to the leather industry particularly in tanning and finishing,
footwear and footwear components, leather garments, leather goods including
bags, wallets, belts, gloves and other accessories.
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Electrical and Electronics
Appliances
The country boasts
a pool of labour resource which includes people who have graduated with
different technical diplomas. The knowledge acquired will enable them to work
on sub-assemblies or the final assembly of an array of finished electrical and
electronic products or components. Opportunities exist in the production of a
wide range of finished goods from manufactured parts or subassemblies. These
could involve assembly of intricate manufactured products, such as, engines,
computers, electrical and electronic components, radio or test equipment,
machine-tool controls, and prototypes of different types of products to meet the
domestic and international markets. Currently Lesotho hosts two companies in
electronic and electrical assembly. They both supply the South African market
competently.
Food Processing
Opportunities also exist in
processing of fortified/convenience foods and grain.
Historically, processing of
fruit and vegetables in its simplest form like pickling sun drying or making
preserves was practiced in the country from very ancient times in almost every
home. The practice has been abandoned with the result of these products being
imported.
The Ministry of Agriculture
is intensifying methods to enlarge production base of this products, modern
methods of cultivation are being introduced thus ensuring improved
productivity. These developments will result in greater availability of quality
raw materials to the food processing industry resulting in better capacity
utilisation and producing a wider range of products and of international
quality.
The country has only one Cannery which commenced operations in December
2004. Its product range includes lemons, peaches, pineapples and beans.
However, because of the envisaged increase in productivity levels it is highly
unlikely that the Cannery will have the capacity to absorb and process all the
raw materials available in the country.
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Water Bottling
Lesotho’s major natural
resource is water, often referred to as ‘white gold’ by the Basotho people.
Lesotho water is considered one of the most pure in the world with very little
microbiological and chemical contamination which requires intensive treatment.
With increasing fears of water borne diseases, people are voting with their
purses and wallets when they buy bottled water. The common preference for
bottled water seems convenient and aesthetically based: better taste, and less
odours, especially from chlorine. There is also a perception of greater safety
and affordability with an assumed lower concentration of micro organisms and
chemical pollutants.
Bottled water is also considered a food
product internationally, thus investment in water bottling is necessary as this
would result in a
positive impact on public health in the region, by providing safe drinking water
and soft drinks in areas with poor water supply quality.
Plastic Products
The demand for plastics has
increased steadily; plastics are now accepted by households, retailers’
designers and engineers as basic materials along with other traditional
materials. They are one of the most used materials on a volume basis in
industrial and commercial life.
Plastics are broadly
integrated into today’s lifestyle and make a major, irreplaceable contribution
to virtually all product areas. For example the
manufacturing sector in Lesotho which is geared for production of goods for
export markets requires a lot of packaging materials for its products.
Currently all the plastic ware is imported from South Africa and Asia.
Thus opportunities exist in
the manufacture of plastic ware to different customer specifications; especially
in materials which will provide a complete range of packaging products for the
local and export markets.
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Resource-Based Products
The sandstone deposits are
found all over Lesotho and can be exported in different sizes and thicknesses.
The whole industry is
in the hands of small artisans with limited investment capabilities.
In Lesotho sandstone is
extensively used in residential houses, office buildings, commercial complexes,
hotels, restaurants and special monuments. Artifacts made of stone have become
popular. The present demand is to make these stone carvings in the best possible
manner with man and machines. However, for making large number of pieces,
mechanization to some extend is required.
The demand for sandstone
slabs and tiles as well as veneering stones has been increasing every day and
different applications in different designs are being made. The main advantage
of using these stones has been negligible maintenance. The demand for sandstone
tiles is picking up and it is hoped that with additional capital that could be
brought in by joint venture partners and proper marketing it would be possible
that the export market of natural and calibrated sandstone shall also increase.
Joint venture partnerships
are encouraged with local companies which cannot only create value addition, but
also generate employment and earn foreign exchange for the country, while
reviving the talent of artisans in a significant manner.
Environmental Projects
The textiles
industry includes dyeing, finishing, and printing, and final cutting into
garments, and fabrics, etc. These include products such as cotton, flax. rayon,
nylon, acrylic, polyurethane and others. The primary environmental aspects of
the textiles industry involve water use and wastewater discharge from washing,
chemical use in dyeing and finishing, and management of scrap and solid waste.
There are
many low-cost improvements possible at every stage in the textile production
life cycle. Therefore; investment opportunities exist which will include process
measurement and control, water recycling, chemical substitution and reduction,
energy efficiency, and new product development using waste materials.
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Development Infrastructure
The LNDC is unable to meet
its growth objectives because of inadequate infrastructure. For example, LNDC
lacks financial capacity to develop industrial sites and buildings to house
industrial projects on LNDC industrial projects pipeline. In addition LNDC
lacks financial capacity to develop commercial retail properties as well as
commercial residential properties.
Foreign direct
investment is thus required in:
-
Development of
an 80 hectares Tikoe industrial estate, situated at Maseru district. Estimated
development cost is USD25.66 million;
-
Development of
a 31 hectares Nyenye industrial estate, situated in Leribe district, 80 km north
of Maseru district estimated at USD6.04 million.
-
Development of
commercial centres for example;
- Clifford
Complex site which is in excess of 9,400 m2 . An opportunity exists
for construction of a modern shopping complex with adequate parking facilities
and amenities associated with such buildings.
- LNDC Mall with
an area of 23,110m2 . The mall is intended to house retail stores as
well as government departments.
