The Abia state government has brokered a $1.5 billion deal with Huajian Shoe Industry in Dongguan, Guangzhou, China project for the establishment of a shoe industry in Aba, the commercial nerve centre of Abia State. The factory is expected to have the capacity to produce 5,000 shoes per day and create 10,000 direct jobs and 50,000 indirect jobs.
Abia State Governor, Dr Okezie Ikpeazu, who signed the deal with the Group Chairman of the Huajian Group, Mr Zhang Huarong, in the course of his official visit to China for the 1st Nigeria-China Governors Investment Forum is optimistic that the deal will bring much-needed competition to indigenous shoe manufacturers in Aba. It will also phase out manual shoe manufacturing techniques employed by local shoemakers.
In addition, terms of the deal will see that the investor train 100 Aba shoemakers in China on the use of the latest technology in shoe making. The 100 trainees are expected to form the bulk of the staff strength of the Chinese factory in Aba.
“The major constraint our shoemakers have is that most of their work is done manually. This has gone on for several decades. We must change that. So we plan to introduce them to automated shoe production and China is key here. The goal is to achieve 75 percent automation locally between now and the next 24 months.”
“This factory will create 10,000 direct jobs and 50,000 indirect jobs from the secondary markets that will be created,” the governor said.
There is fear in the city over what the deal will do to local manufacturers who may not be able to compete with the Chinese.
According to a comment on the state’s Facebook page, Emeka Asita said getting the Chinese to open shop in Aba is not in the interest of local manufacturers.
“He is taking Aba jobs and handing them to the Chinese! Aba is driven by local industry, local ingenuity.”
“Aba shoemakers and designers need investment in infrastructure and assistance in upscaling their technology. They don’t need Chinese competition.
“The Chinese will kill the local industry using technology to produce more aesthetic shoes at a lesser price. This is akin to dumping! You don’t bring in foreign competition in an industry where the locals have already made a headway.”
“You support the local industry by providing technology that will enable them to compete internationally, or at least increase or retain their domestic market share,” he wrote.
However, proponents believe that the local economy is ripe for direct foreign investment, which will boost the local economy. An aide to the Governor, John Okiyi, believes that protectionist concept that insinuates that the factory will cause loss of market share for local manufacturers is unnecessary.
“I suspect similar debates were had when the Nigerian breweries came to Aba. Some must have argued that their coming will kill local palm wine tapping industry. When PZ came the debate must have been that Aba pomade makers will be affected and when IEA arrived Aba we must have debated whether local soap manufacturers will die or live,” He wrote.
He believes that cities like Lagos and Port Harcourt are beneficiaries of direct foreign investment.
Although a timeline has not been specified for kick starting it, if this deal can be achieved, it should be structured not to leave local manufacturing grounded, going by the estimated 5,000 shoe per day output of the factory. Transference of shoemaking technology to local manufacturers to help them improve quality and compete should be taken care of.
Deals like this should also serve as a catalyst for fixing the poor road infrastructure and power challenge in the city which has hindered production and distribution of Aba shoes.