Ethiopia. Calzedonia Textile Made in Italy. Inside the mysteries of Ithaca plant in Mekelle.
Calzedonia, Italian textile industry leader, announced on 04 November 2020 the closure of its establishment in Mekelle, Tigray, Ethiopia due to the outbreak of the civil war. Direct testimonials claim that the establishment remain open, miraculously saved by war events. The history of the Ithaca plant of Mekelle: very good political links, unnecessary tax relief, anti-syndicate activities and heavy workers exploitation.
Calzedonia Group of Valais di Oppeano, Province of Verona is a company owned by 7 brands related to clothing and sold in over 50 states. Between them: “Calzedonia” (socks and swimsuits); “Intimissimi” (lingerie and intimate); “Falconeri” (knitwear); Atelier Emé (wedding and ceremonial dresses); Intimissimi man (underwear, knitwear, nightwear, socks and male swimwear). The group has recently overlooking the Italian wine production with the “Signorvino” brand.
Founded in 1987 by Sandro Veronesi, Calzedonia is now managed by his sons: Marcello, Matteo and Federico. In less than 15 years the Italian company has imposed its products on the international market also thanks to the economic and political support of Nerino Grassi, of which Sandro Veronesi married his daughter. Mr. Grassi is among the first 1280 people richest in the world with a patrimony estimated in 2020 to 2.5 billion dollars. He is well insert in international political and government environments.
The company has been initially develop on the franchise model. It has more than 1,300 shops around the world in countries, including Italy, Spain, Czech Republic, Greece, Mexico and Russia. Since 2006 Calzedonia has opened a series of establishments in third world countries: Sri Lanka, Ethiopia, in the Balkans: Bosnia, Croatia, Serbia and Eastern Europe: Bulgaria, Romania. The total employees amounted to 34 thousand people. In 2016 the turnover passed the 2 billion euros.
In 2018 Calzedonia opens a factory for the manufacture of clothes in Ethiopia destined to Italian and European markets: ITACA Textile PLC. The establishment is located in Mekelle, the capital of the Tigray region. Total investment declared: $ 15 million. The establishment offers work at 1,500 people directly assumed. These should be add to all local service and logistic enterprises and raw material suppliers.
Calzedonia investment is part of the five-year growth and economic transformation plan launched by TPLF, at the time on government. ITACA plant is included in the TPLF strategy to develop 15 industrial parks. This policy has created 10 thousand jobs in the Tigray. Foreign companies, Calzedonia included, draw from the unemployed of the peripheral districts of Mekelle and the poor villages, creating a devastating process of urban migration. In Mekelle before the conflict, overcrowded dorms had arisen to accommodate migrated workers, for the majority women.
The choice of Mekelle was “abnormal”. At 100 km from the capital Addis Ababa, Adama, there is a textile industrial park where international companies like Zadar, H & M and Decathlon are operational. The town of Adama, in addition to offering specialized manpower, is a strategic location that minimizes logistics costs for export. On the contrary, Mekelle is a peripheral location that increases logistic costs. The products can be export using the Afar railway leading to the port of Djibouti or the road Mekelle — Addis Ababa that permit access to the international airport.
In 2018 Calzedonia choice of its factory location had arisen several questions. Why an Italian company, which made the delocalization of production its winning weapon to reduce costs, has chosen a location that involves an increase in logistics costs for export?
At the time Ethiopian political environments and civil society provided their point of view. Calzedonia had opened its factory in Mekelle, under TPLF leaders request who intended to balance the national industrial development not concentrating it exclusively to Addis Ababa, Oromia and Amhara. These accusations have never found official confirmations but since the day of its inauguration it was clear that ITACA factory was particularly important to the Tegaru leadership and found a convenient convergence of intent with Calzedonia.
The inauguration saw the participation of high members of the TPLF party in addition to government representatives. Calzedonia and Ethiopian government, have never give details about the huge tax relief obtained. Ethiopian sources affirm that the Italian company would have obtained tax reliefs higher than those granted to other textiles foreign investors. It has obtained large reliefs on utilities bills, water and electricity too. All “gift” considered as TPLF executive incentives to open the establishment in an Ethiopian peripheral location with known logistic difficulties of transport, but is the TPLF leadership Mather Land of TPLF.
The agreement also includes the PIT clause (Passive Improvement Traffic) which allows foreign investors to import material for production and to export the finished product without paying customs duties. A perfect measure to protect the profits of Calzedonia products generated by industrial relocation policies that, with great myopia from Italian government, obvious damage Italy youth occupation. The combination of trade, politicians, tax, customs free duty, and wage moderation are the fortune of European companies such as Calzedonia.
Another point in the commercial agreement obliges Calzedonia to take charge of the social development of the city of Mekelle and its surroundings. Since the beginning of 2010 the social commitment of multinationals has become an integral part of the company strategies in order to offer a false image of capitalism with a human face. Usually the multinationals are committed to facade activities by making them appear as important support for the economic and social development of local communities.
Calzedonia’s social commitment went beyond the minimum interventions usually made by multinationals. Through the San Zeno Foundation (founded by Sandro Veronesi in 1999) Calzedonia finances several projects to Italian NGOs including the VIS (International Development Volunteering). The praiseworthy social commitment is obscured by the geographical specificity of the interventions: the Tigray. San Zeno Foundation also finances interventions in other areas of the country but Tigray remains the most beneficiary region.
At the time exponents of civil society offered political explanations to this second “anomaly”. Calzedonia accept the continuous demands of the TPLF of projects in favor of Tegaru communities in Tigray, considering a “lace” to pay for the advantages received, according to civil society activists at the time contacted.
Humanitarian aid financed by San Zeno Foundation often insert in the “fashion” inaugurated by the Italian government to create employment opportunities to mitigate the illegal migration flows from Africa to Europe, in particular: Italy. All bankruptcy projects managed by Italian Cooperation Agency: AICS that do not solve any of the causes that push thousands of poor people risk their lives to reach Europe. Calzedonia and San Zeno Foundation are practically linked to the Salesians of Don Bosco and the Italian NGO Vis, which in fact is Don Bosco humanitarian brach even if he has an apparently autonomy status.
Calzedonia has always painted its factory in Mekelle: Itaca as a model company, where the management offers good salaries and working environment. According to a survey personally made in 2019 the salary provided to Ethiopian employees is slightly higher than the average of the sector. Employees also enjoy health care and other benefits. Unfortunately, the idyllic work environment hides a reality of exasperating productive rhythms and the absolute prohibition of unionization. The number one enemies of Calzedonia in Ethiopia are Ethiopian unions.
Some Ethiopian trade unionists confirm that its impossible for ITACA employees to be affiliated to the textile union, also because of heavy interferences aimed at discouraging affiliation to trade unions, implemented by TPLF and now by Premier Abiy Prosperity Party.
ITACA Calzedonia wages are 60% higher than the average but the Ethiopian trade unionists point out that the workers receive a net salary of 50 euros. A ridiculous workforce cost if compared to an average salary of an Italian textile worker (1,250 euros) or Calzedonia employee in the Balkans or Eastern Europe (480 euros).
“It is obvious that for a poor mother of the Ethiopian family 50 euros are representing a fortune, yet this salary is just able to ensure a mere subsistence and represents a clear form of hyper exploitation of workers to increase profits, of which capitals are certainly not invest in Ethiopia but repatriated to Italy. The main motif of phobia nourished by Calzedonia towards the unions is the fear of disputes aimed at improving salaries. Calzedonia, like other foreign investors, arrived in Ethiopia to generate unimaginable profits in Italy, aware of exploiting our poor people”, explains a Mekelle trade union activist.
When Amhara nationalist leadership (through the nobel prize for peace puppet: Abiy Ahmed Ali) decided to eliminate his political opponent (TPLF), triggering a civil war against Tigray on November 03 2020, also the production of the ITACA plant in Mekelle has suffered.
Verona International Textile Group on 4 November 2020 announces to Italian media to have suspended the activities of its establishment in Mekelle informing that 7 its expatriates were stuck in the Tigray while raging fighting. Five Italian employees of Calzedonia, an external Italian technician (Mantua electrician) and a Sri Lanka citizen employee.
“Production is currently suspended due to lack of electricity. From November 4th we are in contact with the crisis unity of the Foreign Ministry and with the Italian Embassy in Addis Ababa. We are in daily contact with the family members of our expatriate employees and plan to evacuate them with the help of the Italian authorities as soon as security conditions will allow”, report Comini Fabio, Calzedonia head of security to newspaper” L’Arena di Verona “. At the time, the Italian foreign minister: Luigi di Maio claimed to personally take care about the protection of compatriots and businesses in Ethiopia.
Calzedonia in Mekelle plant production, officially is still suspended as is communicated by Calzedonia to Italian magazine Panorama last August 6. “There was Calzedonia in Mekelle. Now it’s gone. “. On the contrary it seems that the Ithaca establishment is open and running even if the production is minimized.
This was stated by former Tegaru employees, now refugees in neighboring countries. According to their stories, Itaca plant was miraculously spared by the destructive madness of Addis Government aims to destroy any industrial, agricultural and commercial activity in Tigray. While the Eritrean and Ethiopian soldiers have focused on destroying industrial parks in “rebel” region with particular fury on textile sector infrastructures, Calzedonia were inexplicably spared.
Former employees confirm that Itaca plant in Mekelle production was resumed but does not reach the minimum standards because of the difficulties caused by electricity cut decided by the central government and by the roadblock implemented against the Tigray region.
Former employees also confirms the anti-union activities of Calzedonia. “Since its opening Itaca has clearly explained to its employees, mostly women, his point of view regarding the right to join a union. We were warned that membership of a trade union was equivalent to losing our jobs. “
Itaca palnt, as well as being saved, would have enjoyed the military protection offered by the Addis Ababa government to prevent looting by Eritrean troops. A detachment of federal soldiers has been etablished inside the plant. The soldiers predisposed Itaca plant defense were Tegaru. Only 2 out of 8 soldiers places on guard were armed.
The federal army was also reported to his Eritrean allies to avoid any attack against Italian textile factory in Mekelle, according to information provided by refugees former employees. Between March and April 2020, Itaca — Calzedonia direction have offer to the Italian NGO VIS a stock of clothing products between November 2020 and February 2021, remained unsold due to inability to export them. These clothes were distributed to the displaced Mekelle and other areas of the region where the Italian NGO works.
How it is possible that the Prosperity Party regime has spared only Calzedonia, meantime was ruthless in destroying Tigray industrial base, damaging without scruples or hesitation many foreign companies?
Among the foreign companies seriously affected during the conflict include: the Maa Garment and Textile Factory (Turkey) with 1500 employees and Dubai Velocity Apparelz Companies PLC, 3600 workers at 95% women. Particular fury has been observed toward the Egyptians investors. The regime in Addis Ababa, without substantial evidence, accuses Cairo of providing arms and ammunition to the regular army of Tigray and the Oromo Liberation Army movement. The Egyptian companies working in Tigray were destroy and close.
The head of the Egyptian industrial zone in Tigray and the deputy head of the Federation of Egyptian investors Alaa El-Saqti informed that the Egyptian factories in Ethiopia have sustained losses of about $ 40 million. The Egyptian companies agreed to international arbitration to claim their rights and seek compensation of large losses.
How it’s possible that the agreements signed between the Government of Addis Ababa and foreign investors that provide protection to their investment in Ethiopia, seem to only be applied in Tigray for Calzedonia while other production companies have been systematically destroyed?
Why Itaca plant was never considered a military target and it has exempted from any terrestrial and aerial bombardment by federal army, also now operating in a region where the “enemy” TPLF took again the control?
The rescue of Veronesi brothers investment in Mekelle has been possible by skillful diplomacy of the Italian company implemented thanks old friendships of the past: the TPLF and current Ethiopia “owners”: the Prosperity Party. The nature of this diplomatic activity is unknown but apparently effective. Former employees informs that Itaca employees are receive regularly their salaries, but the central government blocked the bank accounts of all the Tigray citizens in the Tigray.
The case of the Mekelle establishment would not be isolated. Calzedonia would enjoy great privileges even in other countries where it opened its establishments. The company would also be famous for the opacity of the supply chains that go around the world and the total lack of transparency in the publication of the list of its local suppliers, as it is documented in the 2017 report of the Clean Clothes Campaign : “Europe’s sweatshops”.
The report involves Calzedonia in the endemic and structural poverty situation of workers in the clothing and footwear industry in Ukraine, Serbia and Hungary, in addition to the payment of misery wages and poor working conditions in factories. Calzedonia is in nice company: Benetton, Esprit, Geox, Trimph, real fashion, Armani, Dolce & Gabbana, Ermenegildo, Versace.
The Clean Clothes Campaign asked the governments of producing countries and to the European Union to reinforce work legislation, to set minimum wages in line with the cost of living, adopt a European policy consistent with international human rights conventions and anchor trade agreements to the respect for workers’ rights, unionization included. From 2017 it does not appear that these requests have been firmly fulfilled by the European Union and much less from Italy. Business is business and Italian companies should not be disturbed. Problems and work rights violation are concerning to simple third world workers …
This article is based on stories and first-hand information whose sources were deemed reliable. I remain available for a possible intervention by the Company Calzedonia if it wanted to expose its point of view, counter or challenge the information published. The intervention will be hosted in a full version on the pages of my blog. For contacts, please direct the request to the following email address: fulvio_beltrami@protonmail.com
