TRALAC - Trade Law Centre

Kenyan textiles maker seeking to expand through AGOA

Sunday, 14 April 2019

Source: Daily Nation (Kenya)

Textiles maker Rivatex East Africa Ltd is eyeing regional and international markets with its planned Sh6 billion upgrade.

The modernisation drive will increase cotton consumption from 10,000 bales per day against a projected capacity of 100,000, translating to a daily production rate of 40,000 metres, up from the previous 5,000.

Managing Director Thomas Kipkurgat said the firm was targeting the AGOA (US) market through the Export Processing Zone (EPZ) as well as in East Africa and other parts of the continent.

“We expect to complete the modernisation by the end of April and enhance efficiency and quality,” said Prof Kipkurgat.

Won contracts

The firm won contracts to produce materials used to make new police uniforms and for other government agencies such as Kenya Power, the Geothermal Development Company, various hospitals as well as gowns for public and private universities, he said.

Rivatex secured a Sh3 billion loan from the Indian government last year and an additional Sh3 billion from the Treasury to replace its obsolete machines. 

Prof Kipkurgat said the firm is targeting 40,000 cotton growers and more than 22 cotton-growing counties.

Cotton production is also headed for brighter times after Rivatex announced it will purchase the seed cotton at between Sh47 and Sh50 per kilogramme.

“We are sensitising farmers to take advantage of the modernisation to provide us with the raw materials. This will result in job opportunities for more than 40,000 farmers directly,” said Prof Kipkurgat.

Huge relief

For the past two years, a kilogramme of cotton has been fetching between Sh46 and Sh48 and the new price will come as a huge relief for farmers.

The firm has reached contractual agreements with farmers and ginneries to shore up production.

Rivatex has been using free cotton seeds and free pesticides to woo cotton farmers who abandoned the crop when the textiles industry collapsed.

Some 20,717 hectares are under cotton, with a kilogramme of the produce currently fetching Sh46, shows data from the Fibre Crop Directorate, an agency in the Agriculture and Food Authority.


 

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