Mauritius - Industry

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When industrialisation began in the 1960s the objective was to produce locally the goods that were being imported, creating jobs and saving on foreign exchange. Small industries were set up by local entrepreneurs, encouraged by fiscal incentives. Scope for profitable expansion was limited, however, by the size and buying power of the local market.

The Yaoundé Convention, allowing African countries associated with the European Economic Community (EEC) to have access to European markets for their goods, provided the fillip Mauritius needed. An Export Processing Zone (the EPZ) was set up in 1970 and policy switched to the labour-intensive production of goods for export.

A package of fiscal incentives, including exemption from certain taxes and duties, freedom to repatriate capital and profits, and a guarantee against state takeovers was offered. The scheme attracted investors from around the world, including the UK, France, Germany, Holland, India, South Africa, Hong Kong, Singapore, Taiwan and Australia.

The EPZ produces 95% of all Mauritius’s industrial exports. Nearly 540 enterprises have been established under its banner and about 70,000 new jobs have been created. Nearly half the workforce are engaged in the knitwear industry.

The manufacturing sector is the largest employer in the country, with some 128,000 employees, and contributes 21% of the GDP. Although a variety of goods are produced, the textile industry dominates the manufacturing sector, accounting for 80% of its total earnings. In fact, Mauritius is amongst the world’s largest exporters of woollen knitwear and produces clothing for numerous famous brands, such as BHS and Littlewoods in the UK. However, this sector is coming under pressure from cheaper producers such as China and Bangladesh. This is forcing textile companies like Floréal Knitwear to shift from producing basic products to more upmarket, niche products, as well as moving some of its production to countries with lower labour costs, such as Madagascar.

After the success of the EPZ, concern was expressed that the concentration on textiles could be as risky as the reliance on sugar had been. The industrial development strategy now aims for diversification and new target areas include electronics, information technology, jewellery and printing and publishing.

Meanwhile Mauritius has become world famous as a reliable supplier of manufactured goods. The ‘made in Mauritius’ label is familiar and much sought after as the country gains a reputation for high standards of quality.

The Mauritius Export Development and Investment Authority (MEDIA) was opened in 1985 by government and private sector officials to promote the industrialisation process of the country, help industries find new markets for their products and attract the right type of entrepreneur to the EPZ. This has now been replaced by the Mauritius Investment and Development Authority (MIDA), which promotes the export of goods and services from Mauritius. (For further information see Chapter 3, Business, pages 80–2.) The success in displacing sugar’s importance to the economic base of Mauritius was crucial. The industrialisation of sugar itself is also taking place with such by-products as molasses, rum, ethyl alcohol and acetic acid.

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Mauritius - Industry

History

Mauritius - Industry