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South Asia

American Wool & Cashmere: Supporting Afghanistan’s wool industry

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Country: Afghanistan
Sector:  Agriculture, small business

Challenge: Afghanistan produces significant amounts of wool but lacks the infrastructure to prepare it for export markets. In addition, individual producers are often cash-strapped and lack the liquidity to maintain a consistent level of production to supply foreign buyers who can process it for sale on the world market. Wool production is a labor-intensive process of shearing animals and hand sorting the wool before selling the product overseas. This can result in a lopsided cycle of payment and leave goat and sheep herders without income for months at a time.

Solution: Helped by a series of OPIC loans starting in 2003 and totaling $5.7 million, American Wool & Cashmere Inc. of Takoma Park, Maryland created a delivery infrastructure for raw wool and cashmere produced in western Afghanistan to reach a processing facility in Belgium for export and distribution worldwide. By working with centralized suppliers in Western Afghanistan’s Herat Province who buy directly from the livestock owners, American Wool & Cashmere developed both a consistent supply chain to an overseas processing plant as well as a cash-infused market that allows individual herders to maintain stability through the otherwise seasonal shearing harvests.

Impact: OPIC’s loan helped American Wool & Cashmere inject liquidity into the Afghan market, providing for the payment of cash advances to farmers until buyers provided payment for raw cashmere. Today Herat’s flourishing cashmere industry employs more than 1,500 women and older men who would otherwise have difficulty finding work. Through the support of OPIC financing, American Wool & Cashmere has bought and consigned nearly 600 tons of raw cashmere from producers in Herat, raw material worth nearly $12 million. The company’s operations continue in 2014, with recent advances to cashmere producers allowing the industry to flourish and strengthening the chain of permanent export supply.

This project was profiled in 2014