The Challenge of Building a Manufacturing Presence in Liberia
STANFORD GRADUATE SCHOOL OF BUSINESS - What could possibly be so hard, Chid Liberty wondered, about going back to the birthplace he barely knew - the West African nation of Liberia - and opening a garment factory?
All it would take was purchasing sewing machines, hiring local women as tailors, and putting them all in a room so the workers could start turning out T-shirts to be sold in the United States.
Workers at the Liberty & Justice garment factory in Monrovia, Liberia. Photo courtesy of Liberty & Justice
But it was far from simple to get a global manufacturing firm off the ground in post-conflict Liberia, a country rich in natural resources but still fragile following a bloody 14-year civil war that ended in 2003. The continent as a whole "has a terrible reputation for quality, has a terrible reputation for productivity, for infrastructure, for corruption," Liberty said.
Still, he went on to raise more than $3 million in startup funds and build a thriving business, Liberty & Justice, which makes fair-trade certified clothing and handbags for American retailers including Haggar and PrAna, provides work and education opportunities for Liberian women, and invests in community development efforts in the West African nation.
He spoke about the challenges involved in starting the company now operating in Liberia, Ghana, and headquartered in San Francisco during an Oct. 12 talk at the Stanford Graduate School of Business sponsored by the Stanford Center for Global Health, Program in Healthcare Innovation, and the Center for Global Business and the Economy.
Slightly larger than Ohio and home to 4 million, Liberia is rich with iron ore, rubber, timber, diamonds, gold, and tin, but nearly 70% of the population lives in poverty, according to the U.S. Department of State. More than a decade of armed conflict killed at least 250,000 citizens and trashed the country's roads, hospitals, schools, water delivery systems, and power grids. The adult literacy rate is less than 60%, while only 15% of the workforce is formally employed.
Even so, he saw the country's potential to become a garment district.
A new American trade agreement was a major bright spot. The Africa Growth and Opportunity Act allows Liberty's business to export to the United States duty and quota free, raising interest from U.S. clothing manufacturers that have seen increases in both cotton prices and the cost of hiring workers in China, where much clothing manufacturing now occurs.
There's also the glam factor - Ashley Bush, niece of former President George W. Bush and sister of designer Lauren Bush, has announced she will use the factory to produce a line of skirts.
Those developments, Liberty said, have convinced him that he's "in the right place at the right time."
The Liberty & Justice factory in Monrovia is also certified as a fair-trade establishment, meaning that workers receive above the average local wage - $100 monthly rather than the $80 a month civil servants earn - along with health care and other benefits.
While the company owns 51% of the factory, Liberty said he takes no profit, using any excess funds to pay for social programs that the women employees vote to approve, such as building schools or matching amounts in their savings accounts. The women themselves own the remaining 49% of the factory. Those benefits serve as powerful incentives for the women to learn Western-style manufacturing techniques and meet quality and production goals.
Liberty & Justice's first factory, opened in Liberia early last year, now employs 60 workers but is preparing to ramp up to 500 workers shortly. Starting early next year, the company's T-shirts, handbags, and pants will be sold online and at U.S. retailers. The firm recently acquired a second factory in Ghana, which aims to employ "several thousand" workers in just a few years, Liberty said.
Liberty's personal story helps explain his commitment to creating a cross-continental social venture that is providing Liberian women with the skills and jobs they need to lift themselves out of poverty.
Born in Liberia as a diplomat's son, Liberty's family moved to Germany when he was just a toddler after his father was named Liberian ambassador to Germany. As Liberia's political situation deteriorated in 1985, the family sought refuge in the United States, where his father taught African history, first at Stanford University and then at Marquette University.
Liberty didn't learn until middle school that his experience was vastly different than that of everyday Liberians. "My idea of being Liberian was our life in Germany," he explained. "I thought all Liberians drove Mercedes Benzes and had all the coolest new toys. I remember I was in the 7th or 8th grade when I found out most Liberians didn't have telephones, and I was actually shocked. I couldn't even imagine that, given the life I'd had growing up in the West."
When he was 18, his father died and Liberty began hearing stories about how his dad had helped other Liberians, sometimes paying their education costs or otherwise encouraging them to achieve. That was when Liberty said he decided to return to help the African nation rebuild.
"I'd always had this need to go back to Liberia. I was very curious about it," he said. "Basically, I'd left the country when I was 18 months old, and nobody in my family had gone back because of the war. I never had any direct contact with the country, but it played a very big part in my life."
After earning an undergraduate degree in management information systems and accounting from the University of Wisconsin?Madison in 2001, he went on to several jobs, eventually being named controller at Trilogy Integrated Resources in San Rafael, Calif. That company has a social mission - building websites for caregivers providing health services. "That's when it got to me that you can make money and do good at the same time," said Liberty.
If he had it to do all over again, Liberty said he would aim bigger, right from the start.
"I allowed people to tell me I was biting off more than I could chew, so I kept scaling down," he explained. "Now I can see how much further along it would be if I had followed my gut. I've always believed in the women that we are supporting and in their ability to make things happen."