Limited Brands eyes an organic cotton venture in West Africa.
This story first appeared in the April 8, 2008 issue of WWD. Subscribe Today.
Limited Brands is reviewing the quality of a shipment of organic cotton from Burkina Faso, and the results of the tests could have far-reaching implications for the company and the farmers of this small, landlocked West African nation.
A preliminary order by a Limited Brands vendor of 600 tons of organic cotton was shipped from Burkina Faso in December and is being ginned in a Mumbai, India, plant, one of the only plants in the world that has a Fair Trade Certificate.
The fiber is longer and has proven to be of even higher quality than the lingerie and personal care retailer envisioned, company officials said, meaning the range of potential uses for the cotton is greater than originally anticipated.
“The results from early testing and evaluation of the cotton are promising,” said a company official who asked to remain anonymous. “Other processes, such as spinning of the yarn and fabric making, are being evaluated.”
According to a company spokesman, Limited Brands has been studying the African cotton sector since 2000 when the African Growth and Opportunity Act was signed into law. The act enhances U.S. market access for 39 sub-Saharan African countries, primarily via duty free benefits.
“Africa is a natural, low-cost, high-quality environmentally friendly producer of fiber,” said the spokesman.
If Limited Brands decides to make another order, the benefits to Burkinabe cotton farmers will be great. A decision likely will have to be made soon, as the planting season begins in June and farmers will need to make crop decisions.
Last year’s preliminary order of organic cotton is the largest single buy for organic cotton ever placed in Burkina Faso, and the possibility of supplying a major U.S. retailer with organic cotton has sparked intense interest and cooperation between the Burkina Faso government, its cotton union, the National Union of Cotton Producers of Burkina Faso, and growers.
Wilfried Yameogo, permanent secretary for the privatized cotton sector in Burkina Faso, said that, while the partnership would undoubtedly boost his country’s economy, the women who work the small village farms with their families would be the first to benefit.
“Thanks to this, women who are organic cotton farmers have a major change in their life’s possibilities. They are seeing tangible results already because of the premium price from Limited Brands,” he said. “They’re able to invest in everyday life, their kids, health care and schools. This partnership has given them faith in life.”
Because it has eliminated traders from the transactions, 80 percent of the price of the cotton is going to the Burkina Faso producers, a Limited Brands official said. The Fair Trade premium negotiated by Limited Brands is paying for up to 20 wells in 15 Burkina Faso villages. A scarcity of water is a prime problem in the country, which borders the Sahara Desert. The wells are expected to be completed by November at the end of the rainy season.
Burkina Faso is one of the poorest countries in the world and is about the size of Colorado. The average income for the approximate 14 million Burkinabe is less than $1,000 a year, according to the World Bank. The country, bordered by Ivory Coast, Ghana, Togo, Benin, Niger and Mali, has few natural resources, and some 85 percent of its citizens are engaged in agriculture, primarily subsistence farming. Just 10 percent of its agricultural production is in cash crops, according to the International Monetary Fund.
Cotton is its economic mainstay, and Burkina Faso is the largest cotton producer in sub-Saharan Africa. Its cotton production has grown 19 percent over the past 10 years, and its share of world cotton exports has tripled during that time, despite a slump in world prices, according to the IMF.
Enhanced cotton production is viewed by the IMF in a February report as a path out of poverty for the 700,000 Burkinabe cotton workers, an estimated 17 percent of the country’s population. The sale of cottonseed is the main or only source of cash revenue for rural farmers, and the expansion of cotton growing has stimulated increased production of other crops and reduced poverty by 25 percent in cotton-growing zones, the IMF reported.
Under the leadership of Limited Brands, organic cotton production in Burkina Faso has rapidly advanced. Burkinabe farmers are using cotton bags sewn locally to harvest cotton instead of the rough plastic bags that contaminated the organic crop. The cotton union has helped buy clean trucks to transport the crops. Women stir up a botanical insecticide from an indigenous tree and so avoid using chemicals.
“We want to do our part to make sure Africa succeeds as a potential partner in the global market,” the Limited official said. “We are providing technical assistance to the women farmers in Burkina and hope our efforts will enable them to become competitive in the marketplace.”
Organic cotton production is increasing yearly. In 2005, 350 tons of organic cotton were produced; 1,000 tons were produced last year, and the 2008 crop is expected to reach almost 3,000 tons. Annual production of organic cotton is expected to ultimately reach up to 4,500 tons. In 2006-2007, 49,959 metric tons of organic cotton were produced worldwide, according to a July 2007 report by the Organic Exchange.
Burkina Faso also is attractive to Limited Brands because of the status of women. While genital mutilation still occurs — as it does in many West African countries — the Burkina Faso government has outlawed the practice and is even holding responsible family members or neighbors who know about the practice. Also, state law gives many rights to women, and Burkinabe women have more say in domestic and economic matters than those in many other African countries.
The public relations aspect of sourcing Fair Trade organic cotton from one of the poorest countries in the world is not lost on Limited Brands.
“There is a euphoria about the environment, and making a difference is important,” Ted Adams, vice president of company affairs at Limited Brands, said. “The community looks at fiber, who harvests it, how it’s grown, how it’s picked and everything that surrounds it. If we could design an organic cotton story, West Africa would be a good start.”
Costs also are a part of the equation. “Operating in an eco-conscious way depends on our ability to balance between what our customers want, the environmental impact and delivering value to our shareholders,” Adams said. “Our production teams look at many factors in making production decisions. This is one of the many options we’re considering.”