Reltex Africa counts gains as floods pound

As floods continue to overwhelm Pakistan, the staff of Reltex Africa is working overtime to make waterproof plastic sheets—tarpaulins— whose demand has increased fuelled by relief efforts around the world.

Barely three months since Reltex opened its doors at the Export Processing Zone (EPZ) in Athi River, it has become a major supplier of waterproof shelter material for the relief efforts in Pakistan.

Tarpaulins are a strong flexible water-resistant material used to provide shelter especially during relief campaigns.

“We have had to turn away some orders due to the Pakistan situation that has led to increased demand for tarpaulins,” said Mr Simon Lucas, the chief executive of Reltex Africa.

Pakistan is facing major floods that has killed and displaced thousands of people leading to an emergency appeal.

Organisations like local Red Cross arms, the International Committee of the Red Cross (ICRC), the UN and various governments have rushed in to help the country raising the demand for relief supplies across the world.

Reltex Africa, which employs at least 150 Kenyans, is one of the companies that is cashing in on the demand as it mainly works in the international relief and emergency markets manufacturing shelter-related plastic sheeting and tarpaulins.

Mr Lucas first started the business in Uganda, but had to close down in 2003 due to trade barriers that made it hard for his company to supply its wares to the international organisations.

He moved the factory to China, but last year decided to move back to Kenya to take advantage of the country’s strategic location.

Major relief organisations working in east and central Africa have a base in the country as most of the countries are easily accessible either by road or air.

Though production in China is cost effective compared to Kenya, Mr Lucas argues that Kenya is highly competitive due to its location as it take less time to move the products to the region compared to chartering a plane from China or India.

Adding that with major relief organisations based in Kenya it makes it easier to move the products.

However, it was not easy to set up in Kenya due to the negative perception of doing business in Africa thus making it hard to get financing in the West.

In the end, Mr Lucas approached Kenya Commercial Bank which loaned them at least 35 per cent of the $10.5 million that has been invested so far to set up and buy raw materials.

The choice to move to the EPZ was informed by the accessibility to reliable utilities, especially electricity of which is a key component of his business.

The EPZ promotes export-oriented industrial investments where they enjoy fiscal incentives and services.

The ICRC is one of the major organisations operating in the country boasting a major logistics office that has played a major role in the Pakistan relief.

In partnership with the Pakistan Red Crescent relief, the organisation has provided 200,000 victims with one month food rations with a further 125,000 receiving shelter and household items.

As of last week seven cargo aircrafts had left Jomo Kenyatta International Airport for Pakistan with thousands of buckets, kitchen sets, foldable jerry cans, blankets, and tarpaulins.

Other than the buckets and kitchen sets the rest have been sourced locally with a majority of the ICRC sourcing most of the tarpaulins from Reltex.

Other than Pakistan the company has also moved supplies to Haiti and Dafur with over 100,000 tarpaulins having been manufactured in the first two months.

The positive start for Reltex has seen the investor move forward their expansion plans from 2012 to end of this year with the ambition of becoming a 24 hour factory.

The company plans to increase its capacity, order more raw materials bringing down its costs.