Bloomberg News
Diakaridia Dembele and Yinka Ibukun
(Bloomberg) — Mali, Africa’s biggest cotton producer, plans to invest in clean energy and tackle issues like child labor and soil health to make its output more competitive in the European market.
More than half of Mali’s cotton is processed in Bangladesh and typically ends up being sold as ready-made clothing in Europe and other key markets, said Mamadou Moustapha Diarra, the chief executive officer of the state-owned textile development company, CMDT.
CMDT plans to spend $40 million in renewable energy over the next five years to replace its diesel-guzzling generators with solar and biomass plants to supply the 100 megawatts it needs to power its processing operations. The company, which controls Mali’s cotton sector, has ginning factories, where the seeds are separated from the fluffy cotton lint, and plans to build facilities to spin the cotton fiber into thread.
“These are noble steps we’re taking for the environment,” said Diarra, “but they also improve the company’s profits by cutting energy costs.”
Apart from cleaner power, CMDT is also tackling thornier issues such child labor and poor soil health. The European Union, one of the world’s top apparel and textile markets, has been tightening environmental and social regulation for its imports, requiring local companies to be more transparent about their global suppliers and production practices.
Mali’s second-biggest export after gold is especially vulnerable to regulatory changes because the cotton is cultivated on more than 200,000 smallholder farms, complicating its supply chain.
“When we are looking at the production standard, we are already trying to anticipate what future legislation will ask us to comply with,” said Lena Staafgard, the chief operating officer of Better Cotton, a Geneva-based organization supporting CMDT on EU compliance.
The EU has already approved a directive that makes companies legally liable for ESG violations in their supply chains and many stakeholders expect that cotton will be added to a list of raw materials covered by separate, now delayed, anti-deforestation regulation “at some point in the future,” Staafgard said.
“The work that’s happening is to ensure that the smallholders of Mali can still sell their cotton to Europe,” she said.
Source: financialpost.com