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Heat of internal chaos strikes apparel sector
18
Jan '08
Nakuru-based Bedi Investments, one of the leading textile manufacturers has reported heavy loses during the past few weeks. Officials believe that the key reason for this is the ongoing political turmoil in the provincial capital, which is also the fourth largest urban centre in Kenya.

The company sources reveal that, so far the loss in export earnings has been more than Sh10 million. The company, with considerable presence in the European countries, exports apparel and garments worth Sh32.5 million, each month, to the US under the Africa Growth and Opportunities Act (Agoa).

The production unit is unable to function smoothly as raw material is not reaching on time, because the transport routes are blocked. Even the manpower has reduced drastically, delaying in the supply to international market.

Though there is not much pressure on the company right now, it is likely to suffer financial losses resulting from the delays. Analysts estimate that just a 10 day delay would mean a loss of around Sh13-13.5 million (about US $200,000) in the earnings.

In a survey conducted by The Kenya Association of Manufacturers, the textile industry is the fourth largest sector, with manufacturing output increasing by 4.8 percent in 2006.

Further adding that the extension of AGOA preferential scheme by five years, effective from September 2007, will add to the industry's growth momentum. The country will get time to establish local fabric capacity, while boosting apparel exports to US markets.

Thus, experts stress that Goevrnment takes aggresiive steps to control the situation, so that all industries, especially textiles, are able to take complete advantage of the favourable opportunities in international markets.


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