Furniture makers lose exclusive State supply deal

The government is considering doing away with a policy that gives furniture makers exclusive rights to supply State offices, since only a few are capable of doing so.

Industrialisation Secretary John Mosonik said only six companies had qualified for tenders from an initial vetting of potential suppliers in Nairobi, where most had been expected to come from.

The policy which took effect on March 1, mandates all ministries and state agencies to buy only locally made furniture, a move that provides a guaranteed demand from the state — the biggest spender in the economy.

Up to 14 companies — furniture makers and wood suppliers — in Nairobi had been short-listed, according to documents seen by Business Daily.

This means that state agencies in urgent need of furniture will be given the leeway to buy imported furniture in the near term as the government and local manufacturers sort out the teething problems.

“We are not going to sacrifice quality and timely delivery in implementing this policy. We are telling local investors that demand is there and asking them to step up and prove their ability to meet it,” Mr Mosonik said.

He added that in light of the challenges, the empowerment of local manufacturers is now going to be a gradual process, with priority given to those with the capacity to deliver.

In issuing the policy, the government hoped to spur the employment of artisans in the labour intensive carpentry workshops, making it shun the exotic furniture business that is seen as creating comparatively lesser employment opportunities owing to its thin value chain structure.

But the government has had a tough time sifting through potential beneficiaries.

In view of this fact, the government has capped the use of the finished foreign components at 20 per cent, which is still a high benchmark according to industry players.

“Most of the components of furniture items assembled locally are imported,” said Firoze Bachu, the managing director of Furniture Elegance.

The situation is complicated further by the fact that firms with an element of manufacturing are also dabbling in imports.

But the biggest threat to the affirmative action is a lack of capital and capacity.

“What the government should have first done is to provide the enabling environment in terms of availing land for workshops, facilitating technology and skills transfer from more developed markets and access to finance,” said an industry source who sought anonymity.