Interviews
Clothing sector in throes of deep trouble
04 May '09
2 min read
The economic recessionary trends is taking its toll across the textile and garment sector of many countries and leaving no one unscathed in its wake. The Kenyan textile and garment sector is also feeling the throes of the deep crisis.
Around four years ago, the apparel industry had around 32 manufacturing companies providing employment to thousands of people, but now only 15 of these are still in operations, leading to unemployment to nearly 75 percent of the workforce.
Even the ones which have been able to survive are doing so, are under sheer pressure and there are all possibilities that even they may fold up in the next few months, which would ultimately result in job losses to all the workers.
This situation has come about despite the fact that textile and apparel products from Kenya have access to the biggest market in the world; the US, under the Africa Growth and Opportunities Act (AGOA).
In spite of the fact that exports of apparels to the US have shot up from US $30 million in 2000 to $240 million in 2007, it has not helped the industry to survive. AGOA was initially meant to end in 2008, but was extended till 2015.
Experts from the industry, point out to several reasons for the decline, but point out that a fall in per unit realizations has been the single biggest culprit. Per unit sales prices have fallen from $4.39 per unit in 2005 to $3.47 in 2008.
This has more to do with competitiveness displayed by the sector in Kenya, since shipments of clothing from other countries like China, Bangladesh, India and Vietnam have shot up in leaps and bounds in the same period.
But the biggest fallout will be the impact on the burgeoning cotton sector which has seen its productive, yield and overall production increase in the last few years due to favourable policies of the government.
Experts aver that, the government should come forward and implement good policies, on the lines done so for the cotton sector, other wise it may not take long for the reminder of the units to shut down, putting all jobs at stake in the sector.
Around four years ago, the apparel industry had around 32 manufacturing companies providing employment to thousands of people, but now only 15 of these are still in operations, leading to unemployment to nearly 75 percent of the workforce.
Even the ones which have been able to survive are doing so, are under sheer pressure and there are all possibilities that even they may fold up in the next few months, which would ultimately result in job losses to all the workers.
This situation has come about despite the fact that textile and apparel products from Kenya have access to the biggest market in the world; the US, under the Africa Growth and Opportunities Act (AGOA).
In spite of the fact that exports of apparels to the US have shot up from US $30 million in 2000 to $240 million in 2007, it has not helped the industry to survive. AGOA was initially meant to end in 2008, but was extended till 2015.
Experts from the industry, point out to several reasons for the decline, but point out that a fall in per unit realizations has been the single biggest culprit. Per unit sales prices have fallen from $4.39 per unit in 2005 to $3.47 in 2008.
This has more to do with competitiveness displayed by the sector in Kenya, since shipments of clothing from other countries like China, Bangladesh, India and Vietnam have shot up in leaps and bounds in the same period.
But the biggest fallout will be the impact on the burgeoning cotton sector which has seen its productive, yield and overall production increase in the last few years due to favourable policies of the government.
Experts aver that, the government should come forward and implement good policies, on the lines done so for the cotton sector, other wise it may not take long for the reminder of the units to shut down, putting all jobs at stake in the sector.
Fibre2fashion News Desk - India
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Andreas Rass
ZIMMER AUSTRIA | Digital Printing Systems
Mohankumar Rathinaswamy
Cheran Machines India Private Limited
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