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Exporters eye Europe to escape aftermaths of US recession

22
Apr '08
A gradual recession in US market is forcing workers in the export processing zone in Athi River EPZs to look for better and more profitable markets.

Demand from the American market has depicted a considerable slow down and as a result EPZ of Kenya are eyeing opportunities offered by the new interim Economic Partnership Agreement (EPA) that allows an access to the European market.

According to Kenya Apparel Manufacturers and Exporters Association (KAMEA) local manufacturers are probing diversification of their business to Europe to offset the losses incurred by trading with US.

Under the interim pact with the EU, after January 2008, Kenya and other states can continue to enjoy the duty free, quota-free market access for almost all the products except sugar and rice.

Experts believe that this will be an incredible opportunity to revive the dreary textile industry, besides, it will also attract a good amount of Foreign Direct Investment from Europe.

These investments are expected to come in form of new technology that will aim to shift the industry's focus from cotton growing to value added production.

The immense potential of Kenya's garment production can be seen from the fact that its export to the America increased from US $44 million in 2000 to $226 million in 2004 ranking the country as Africa's second largest garment exporter to US after Swaziland.

Coupled with slower demand from the US, are other critical problems like high cotton prices, lack of domestic cotton supply chain and high production costs, that have crippled the garment industry. Already four EPZ firms have closed operations and under the present circumstances, resorting to European market seems to be the only alternative for Kenyan exporters.


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