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World Bank Study
The Kenyan textile sector currently produces co on yarn and certain synthetic yarn, knit co on fabric, and woven fabric as well as made-up textile products but has contracted since the 1990s (USITC 2009). These products are either exported directly, some also regionally, or used as inputs into clothing manufacturing. In Kenya there is large potential for spinning, kni ing, and weaving, partly resulting from the relatively skilled labor and tradition in the textile sector, and there have been several new investments recently. However, a major problem is the cost and reliability of electricity, which needs to be tackled before Kenya can be established as a main location for spinning, kni ing, and weaving. Other challenges are limited access to and high cost of finance and poor transport infrastructure. Mauritius produces mostly knit fabrics and to a lesser extent yarn, including co on yarn and co on and manmade fiber-blended yarn, and some denim and co on shirting fabric (USITC 2009). Mauritius has a large number of knit fabric mills but most are vertically integrated and use fabric for their clothing production. Production could be extended, in particular in the knit fabric and yarn segment. Madagascar has limited textile capacity. Its largest textile producer, Cotona, produces woven co on fabric mostly for its internal clothing production, but there is also some yarn and knit fabric production. Besides high cost and unreliable electricity supply as well as high cost of capital and poor transport infrastructure, the political instability during the last decade has reduced Madagascar’s prospects as an investment destination. Lesotho produces co on yarn and woven denim fabrics in its one vertically integrated denim textile mill, Formosa (owned by Nien Hsing). The mill spins and dyes yarn and weaves fabric for use in production of clothing for export but also for local and regional sales. Lesotho has tried to a ract investment in a knit fabric mill. A main problem in Lesotho, however, is the shortage of factory shells and availability of suitable water as well as water treatment facilities. Swaziland produces zippers in a YKK subsidiary and a limited amount of yarn and co on knit fabric in its one integrated textile mill, Tex-Ray, which is mostly used for their own clothing production but also exported regionally. The discussion above shows that all main SSA clothing exporter countries have capacities in the textile sector, but to different extents. However, textile sectors have contracted, in particular in South Africa—the country with the most developed textile sector—and in Kenya. In Mauritius production is concentrated in vertically integrated knit fabrics and yarns and in Madagascar, Lesotho, and Swaziland production is dominated by one or two large investments. There are important challenges to develop a competitive textile sector in SSA as discussed above. However, it will be central to improve the competitiveness with regard to lead times and production flexibility as well as to increase value added in the region. A complementary strategy in the short term could be to import fabric in greige form from third countries, mostly Asia, and then conduct the dyeing and finishing operations locally or regionally. This could reduce lead times and increase flexibility if buyers (both international and regional) decide in advance on the types of fabric used for their collections. This would allow fabric to be sourced from third countries in advance and dyed and finished shortly before the clothing production. Main Challenges to Regional Integration in Clothing
In the parts above opportunities for regional integration with regard to the regional end market (South Africa) and regional production networks were discussed. In this part main challenges to regional integration in the clothing sector are pointed out, including