Kenya signs training deal to boost textile sector

• At the industry’s regional centre of excellence set up in the Athi River’s Export Processing Zone (EPZ), experts from India train local textile firms on new technology, factor pricing, quality control and labour productivity.
• The move to set up a centre of excellence is backed by Trade ministry whose officials have been calling for innovative ways for producing exports.
• In the US market, Asian textile firms have been the main source of pain for African exporters, having squeezed their space following the lapse of Multi-Fibre Agreement’s (MFA) world quota regime in January 2005.
• Stiff competition from Asian firms is one of the reasons that African groups cited to convince the US government to extend Agoa early this month.
• The Athi River-based regional centre of excellence will also train owners and workers of farms, ginneries, spinners from East and Central Africa.
• Kenya has since become Africa’s top Agoa textile exporter, having overtaken Lesotho with a shipment of 65 million apparel worth $296 million (Sh25 billion) last year.

Kenya’s struggling textile industry has moved to establish links with Asian firms, hoping to tap their skills ahead of full-scale competition at expiry of three-year grace period extended by US market early this month.

At the industry’s regional centre of excellence set up in the Athi River’s Export Processing Zone (EPZ), experts from India train local textile firms on new technology, factor pricing, quality control and labour productivity.

“We have seen it in the dairy sector that the moment value chain is functioning properly and rewarding to investors, there will always be an incentive to produce more,” said Export Processing Zone Authority chairman Mathenge Wanderi.

The move to set up a centre of excellence is backed by Trade ministry whose officials have been calling for innovative ways for producing exports.

This comes days after US Congress extended third country fabric rule of its African Growth and Opportunity Act (Agoa), handing 23 eligible African textile exporters up to September 2015 to prepare their value chains for full competition.

READ: US Senate approves exports rule stay

“The three-year grace period will enable us to incorporate experiences of Asian firms — especially China and India which are top global textile makers — starting with India’s since we share English language,” said Jaswinder Bedi, chairman of African Cotton and Textile Industries Federation (ACTIF).

In the US market, Asian textile firms have been the main source of pain for African exporters, having squeezed their space following the lapse of Multi-Fibre Agreement’s (MFA) world quota regime in January 2005.

Stiff competition from Asian firms is one of the reasons that African groups cited to convince the US government to extend Agoa early this month. The rule allows them to continue sourcing semi-finished clothes from places such as China and India to produce exports.

When it created Agoa in 2000, the US had initially cited MFA to block or charge higher tariffs on Asian textile products from its market, giving African firms an easy ride.

But with MFA out of the way, Asian firms have leveraged on their low energy costs and factory efficiency to produce superior textile products, forcing weaker African textile firms to shut down as orders from US dried up.

At the signing of memorandum of agreement (MoU) with the authority on Wednesday to set up the textile centre of excellence, ACTIF officials said collaboration with Asian firms would boost factory efficiency and allow them to produce quality goods at competitive prices.

“The good thing is that cost of labour is now going up in most Asian countries and this means the moment we improve quality and match efficiency with which they run their value chains, the post 2015 competition landscape will radically change,” said Mr Bedi.

The Athi River-based regional centre of excellence will also train owners and workers of farms, ginneries, spinners from East and Central Africa.

Kenya has since become Africa’s top Agoa textile exporter, having overtaken Lesotho with a shipment of 65 million apparel worth $296 million (Sh25 billion) last year.