Producing fancy yarns in Bolivia On account of its vast herds of Llama and Alpaca kept at high altitude, Bolivia is well-known as producer and exporter of tops, yarns and garments made from the natural fibres of these animals. Its important knitwear sector is however lagging behind, due to its concentration on traditional winter garments produced from relatively heavy, plain yarns available in Bolivia.The idea behind the project is to boost the competitiveness of local knitwear companies and associated hand knitters, through the utilisation of so-called fancy yarns. Fancy yarns are made with distinctive colour changes, special texture, irregular profile and/or a blend of various fibres that make them stand out against traditional plain yarns. Still using mostly Alpaca and Llama fibre as a basis, fancy yarns allow the production of much lighter and diverse knitwear, also for summer collections and according to the latest trends in fashion.The applicant, Pitata S.A.C. from Arequipa, is active in the procurement of Alpaca fibre and in the commercialisation of yarns and tops for the textile industry in Peru and abroad. Local partner, Altifibers S.A. from El Alto, is a producer of fibre tops and yarns of Llama, Alpaca and sheep. Third partner, AslanTrends USA Corp from Washington, USA, is a producer of a wide variety of top quality yarn products from natural fibres, sourced from South America. The three partners will set up a joint venture to produce fancy yarns in Bolivia.The factory will be set up on the premises of the local partner in El Alto, and will create direct employment for 35 persons at the plant, as well contract another 40 independent makers of "hanks", a very labour intensive activity. The staff will be extensively trained to acquire the know-how and skills required to produce high quality fancy yarns, which will be sold to the local industry as well as on the international market. A state-of-the-art air control system and waste water treatment plant, along with OHSAS 18001 certification, will ensure that the environment is protected and working conditions are healthy and safe.The proposed production of fancy yarns will generate considerable additional demand for Llama and Alpaca fibre, benefiting a large number of rural producers. The project will include a pilot to certify the natural fibre supply chain according to the Global Organic Textile Standard (GOTS), which will bring additional income to farmers through the organic premium.Corporate Social Responsibility (CSR)Apart from the established CSR policies of Altifibers S.A., regarding human resources and environment (as verified in the former PSI project), the new joint venture plant will be certified for organic processing according to GOTS.A pilot will be set up to trial the certification of organic natural fibres of Llama and Alpaca sourced from local communities in the Altiplano.Impact•	Employment and working conditionsThe monthly salaries will be at least 50% higher than the minimum wage in Bolivia. All staff will have employment contracts with all benefits as according to the Bolivian labour law. Fringe benefits include a mobility allowance, 95% subsidised meals, contributions to pension fund and health insurance, working cloths. The employees will be member of a labour union. All staff will benefit with intensive trainings. Good and safe working conditions are ensured by full compliance with OHSAS 18001 certification. The working environment will be cleaned from dust by an aero textile system.•	Innovation/Transfer of knowledgeThe project will result in a new product, which requires new production methods. The employees and contract workers will be intensively trained in subjects like machinery operation and maintenance, air conditioning and waste water treatment, fancy yarn and hank making process, dyeing, quality control, production planning and control, organic processing certification compliance, OHSAS 18001 certification compliance or business administration. The fibre producers/famers will be trained in organic fibre certification compliance according to GOTS.•	Chain effectsThe local communities that supply the Llama and Alpaca fibres, will benefit permanently of a higher demand of their products (substituting other kinds of animal and vegetable fibres) and particularly from a 20% price premium resulting from the organic certification programme.Local customers (industrial- and handicraft knitwear producers) will benefit from the availability of a wider variety of yarns that will open new opportunities for producing modern and colourful garments, ultimately increasing their competitiveness.•	Impact on the sectorA local NGO will assist the company and the Alpaca and Llama farmers with the process of GOTS certification. After the pilot it can be copied by other companies and farmers applying the same requirements and training techniques. Based on the project experiences, the engaged Instituto Boliviano de Normalización y Calidad will be able to promote the development of quality standards in Bolivia. The competiveness of the textile sector will be enhanced by this project.•	EnvironmentThe project will lead to organic certification of Alpaca and Llama holders, and 50% reduction in water consumption at the plant. The used water will be recycled after treatment in the water treatment plant.•	Position of womenIn total 49 women will be employed. Additional opportunities for individual independent handicraft producers, who are overwhelmingly female.•	Impact on waterBy upgrading the waste water treatment system the water consumption will be reduced with 50%. Setting up a production chain for organic certified fancy yarns, based on local (Alpaca & Llama) fibres.