A Nakuru based textile manufacturer has lost more than Sh10 million worth of export earnings to the recent outbreak of political violence.

Bedi Investments, an exporter of apparel and garments said it had failed to supply its US-based buyers for more than two weeks. The company said its production processes had been paralysed by delay in arrival of raw material following the blockade of its supply route.

The company supplies garments worth Sh32.5 million a month to the United States under the Africa Growth and Opportunities Act (Agoa). It also sells garments in the European market.

Besides delay in supplies, the company said many of its employees had been caught up in skirmishes that followed the general election leaving it with less manpower.

“Some of our customers have been understanding and are not making unrealistic demands,” said Mr Jaswinder Bedi, the company owner. “We have requested them to accept delayed deliveries, a situation we think cannot last for long,” said Mr Bedi.

Even though the company is not under too much pressure to deliver apparel to the international markets, it is likely to suffer financial losses resulting from the delays. The 10 day delay means the company has suffered close to Sh13 million (about US $200,000) loss in earnings.

Mr. Bedi expressed fears that paying the workers and securing raw materials could be a challenge owing to lack of finances. He says the situation will not look rosy if the political stalemate continued. “I will shut shop and lay off the workers…it can get that bad” said Bedi.

The company employs some 800 workers, 500 of whom are based at the export apparel section of the plant.

According to a survey published by the Kenya Association of Manufacturers, the textile industry is the fourth largest sector of the manufacturing industry contributing 11 per cent to the number of manufacturing enterprises in Kenya. At Sh6.2 billion the sector contributed two per cent to the economy in 2004.

The Economic Survey 2007 says the textile sub-sector has registered consistent growth since 2004. Real output from the industry increased by 4.8 per cent in 2006.

But this growth is likely to suffer as the European Union and the United States leadership have warned that it would not be “Business as Usual” with Kenya if the political stalemate was not settled.

“We hope that no harsh position will be taken by any of our exporting countries. We hope the US and EU will not hit us hard…it could have a ripple effect on the economy” said Bedi.

The Economic Survey 2007 says the extension of AGOA preferential scheme by five years effectively from September 2007 will give impetus to growth in the garment and apparel manufacturing industries. This will give the country time to establish local fabric capacity, while boosting apparel exports to US markets.

But industry owners say the continued political stalemate is not good for business. Sources of raw materials are running dry and the distribution of finished products is also threatened.

Latest AGOA Trade Data currently available on AGOA.info


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