1. EXECUTIVE SUMMARY Adam Smith International (ASI), in partnership with the Ministry of Industry, Trade and Cooperatives (MoITC) and the African Cotton and Textile Industries Federation (ACTIF), invited apparel and textiles sector stakeholders from government, industry and development partners to assess the status of implementation of initiatives in the sector and discuss their alignment to the current Government policy of the Big 4 Action Plan.
STATUS OF IMPLEMENTATION OF INITIATIVES BY GOVERNMENT A number of initiatives are being implemented by the government to boost cotton production and manufacturing in the sector. Under the Buy Kenya Build Kenya initiative, which aims to increase consumption of locally manufactured products, all the textiles for the security and uniformed forces will be procured locally in this financial year. As the single largest consumer, this will be a key step by the government in supporting the growth of the manufacturing sector. The revitalisation of Rivatex is anticipated to increase the consumption of cotton from 10 bales a day to 70 bales a day due to increased capacity. The modernisation of the facility will also enable Kenya to produce internationally accredited fabric. In addition, the government is tackling illicit trade and counterfeits.
The aim was to propose specific and practical actions that can be taken across the cotton, textile and apparel value chain to attract investment and promote manufacturing in Kenya, and address how to more effectively incorporate SMEs into the value chain. The talk continued the discussion from the previous event held in March 2017, that explored how Kenya can become more competitive in the global apparel and textiles market.
Revitalisation of cotton production in Kenya is expected to create 680,000 direct jobs at the cotton farming level, 210 jobs at ginning level, 6,000 jobs at integrated mills and 25,000 at garments manufacture levels. KALRO is supervising trials for Bt cotton at 9 sites in the country and it is anticipated that it will be rolled out in the farming communities in the next season, subject to approvals. The government has also mapped out 200,000 ha of land across more than 20 counties for cotton production. This is expected to produce 50,000 MT of cotton over a period of 5 years.
OVERVIEW OF THE APPAREL AND TEXTILES SECTOR The increasing consumption of all fibres in India and China will change the dynamics in the apparel and textiles supply chain over the next 15 years and this presents an opportunity for Africa. As India and China will look for domestic or regional suppliers to cater for their own demand, the global supply chain will shift from Asia, mainly to Africa. China is also moving from manufacturing lower rack cost to middle and high rack cost apparel and technical textiles.
The government is also aiming to increase export-led manufacturing, including building exports to the American market under AGOA as well as to the European market. Kenya wants to develop exports in high value, niche products and the government is looking for investors that operate in the high value segments and are also global players.
Understanding why and how buyers focus their buying will be important to take advantage of this opportunity. The key factors that Chief Purchasing Officers consider when sourcing apparel and textiles include; cost, speed to market, quality and supply chain development. Kenya needs to implement backward integration from production to value addition in textiles to manufacturing to cater for the interests of the buyers.
The government aims at training and deploying 50,000 youth into the sector over the next 5 years. Working in collaboration with industry, the State Department of Vocational and Technical Training is implementing the East Africa Skills for Transformation and Regional Integration Project (EASTRIP), which is providing USD 10.8 million to develop skills for the textiles sector.
Labour, energy, finance, availability and proximity to raw/intermediate materials; existence of a free trade agreement; and efficient infrastructure are all key factors that impact the textiles and apparel sector to varying degrees along the value chain and need to be addressed to successfully attract investment in the sector.
The Ministry of Education is also supporting SMEs through work-integrated learning, where TVET trainers work in small scale enterprises to learn and understand their needs, in addition to training in their institutions. The ministry has also equipped the workshops in training institutions with new, state of the art equipment and is considering opening them to small scale businesses to do their work and part of their revenues go to the TVET institution.
Africa produces 1.2 million metric tonnes of cotton and consumes less than 300,000 tonnes. Adding value to the cotton we produce would not only produce 10 million jobs, but increase value by over USD 1.5 billion. However, we will need to overcome the challenges in cotton production including inadequate quality certified cotton seed, low productivity, high cost of inputs and inadequate investment in modern technology.
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