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Inner fabrics are made from variety of yarns which is to be worn in contact with the skin of the wearer. Since the fabric gives comfort to the skin, it will have a greater demand by most of the population.



In determining the demand for the products, the average annual supply for the period under reference is considered as the effective demand for the products for the year 2006. The consumption of the products is influenced by, the rapid population growth, the substantial rate of urbanization, the quite remarkable rate of economic growth that has been successively registered by the country since the recent past and the promising trends in the exports of textiles. Accordingly, a conservative estimate of 6% rate of growth is adopted in estimating the demand for the product. The present demand for the product (i.e. 2008) is, thus, estimated at 3,882,000 m2, of which 3,647,000 m2 constitute local supply and the remaining, 235,000 m2 imports.



The required raw material for the manufacturing of inner fabrics is cotton yarn. Cotton yarn can be obtained from the local textile industries. The required amount of raw material at full capacity production is 85 kg/day.


 Knitting is done on a flat knitting machine. The knitted fabric passes down ward through the space between the upper edges of the plate, called the throat. In the knitting process, the needles are pushed up and down by the cam attached to a carriage with a yarn guide, which moves over the length of the machine. The width of the fabric can be altered by increasing or decreasing the number of active needles, allowing production of shaped fabrics.


The inner fabrics are produced through knitting of cotton yarn and doesn’t have finishing section, which uses various chemicals unless treatment plant is installed will cause adverse environmental impact.  So the envisaged project doesnot have any adverse impact on environment.


The total investment requirement is estimated at Birr 7.39 million, out of which Birr   2.83 million is required for plant and machinery. The plant will create employment opportunities for 56 persons

The project is financially viable with an internal rate of return (IRR) of 22.80 % and a net present value (NPV) of Birr 5.09 million, discounted at 8.5%.