TRALAC - Trade Law Centre

Kenya banks on Rivatex factories, high-yield seeds to revive textiles

Sunday, 15 July 2018 Published: | STANLEY KIMUGE

Source: Business Daily (Kenya)

Kenya is banking on the modernisation of Rivatex factories and the adoption of high-yielding seeds to revive the ailing cotton sector.

Through the upgrade, whose cost will add up to Sh3 billion by the end of the year, the textile firm targets to spur production from the current one tonne of lint, equivalent to 6,000 metres, to over 12 tonnes or 40,000 metres of finished products in a day, according to the firm.

Rivatex currently consumes 10 bales of cotton daily, but this is expected to increase to 70 bales once the modernisation of the equipment is complete.

Kenya wants to take advantage of the global markets such as the African Growth and Opportunity Act (Agoa) to change the fortunes of the sector.

Under Agoa, goods of more than 6,000 product lines, mainly textile and apparel, accounting for 65 per cent of the total exports, are granted quota and duty-free access to the US market.

Kenya ranks among the top suppliers of apparel to the US, having exported $340 million (Sh3.4 billion) worth of goods to the market last year. 

Kenya’s total exports to the US under the Agoa plan peaked at Sh35.2 billion in 2015, before declining to Sh32.7 billion last year, according to the Economic Survey data. 

Kenya is yet to fully exploit this opportunity to revive the cotton industry. But the government says this is now changing with Investment and Industry Principal Secretary Betty Maina, noting that the ministry has already rolled out initiatives to return the sector to its glory days. She called on farmers to start growing the crop again.

“If you have a parent or relative who was growing cotton but gave up, tell them to grow the crop because we are reviving this factory. We hope to double and expand the production in the coming years,” she said.

Kenya has also set sights on growing genetically modified cotton on a commercial scale, which experts say will be a game-changer. This follows the recent approval by Nema for BT cotton trials.

President Uhuru Kenyatta in January said he was betting on the sector to create 50,000 jobs and generate Sh20 billion, especially in apparel export earnings, this year as part of his final-term economic revival plan.

Treasury Cabinet Secretary Henry Rotich said the government allocated Sh1.2 billion in this year’s budget to promote the development of the crop and encouraged farmers to take advantage of a ready market to grow the crop.

Kenya produces 30,000 bales of cotton annually against spinning capacity of about 10,000 metric tonnes of lint. To bridge this gap, Kenya imports from Uganda and Tanzania.
PS Maina said the government is committed to creating a ready market for textile products. 

“The President last year promised all products for the police, NYS and military will be sourced locally and military and other public agencies should be exposed to the products,” added the PS.

Rivatex used to produce millions of tonnes of fabric before it was placed under receivership in 2000 following massive mismanagement. In 2007, Moi University bought the firm but has been struggling to produce finished products due to obsolete equipment.

The upgrading of the firm will cost Sh3.016 billion after the company secured a grant from the Indian government for technology transfer and purchase of new machines. The loan was extended to the country following the visit by Indian Prime Minister Narendra Modi to Kenya in 2017.

Indian High Commissioner to Kenya Suchitra Durai, who was present at the event, observed that modernisation of the factory will result in more than 2000 direct jobs.

“Our partnership with Kenya and Moi University through Rivatex also involves capacity building by taking managers and some workers to India who are being trained at LMW Ltd and this will ensure that the factory will produce quality products,” noted Ms Durai.

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