The Eldoret-based Rift Valley Textile Mills (Rivatex EA) has received Sh3.016 billion from the Indian Government to facilitate technology transfer and upgrade.
Indian firm Lakshmi Machine Works (LMW) Ltd will modernise Rivatex’s textile machines to enable the firm to compete globally.
Indian High Commissioner to Kenya Suchitra Durai said the funds would help Rivatex expand its productivity.
The financial support follows a visit by Indian Prime Minister Narendra Modi last July where an agreement on trade was signed between Exim Bank of India and the national Treasury.
“Modernisation of Rivatex factory is expected to revive the textile and cotton industry in Kenya and generate employment,” said a statement by the company.
The LMW managing director, Mr Sanjay Jayavarthanavelu, also wants the curriculum of Moi University School of Engineering reviewed to be in tandem with the needs of modern industries.
Experts from LMW had earlier visited Moi University’s School of Engineering to assess its problems and requirements. “There is a need to examine the possibilities of supplying latest machinery to the department’s labs and to help in skills development and capacity building,” said Mr Jayavarthanavelu.
The Cabinet Secretary for the Ministry of Industry, Investment and Trade, Mr Adan Mohamed, blamed high electricity costs and inadequate raw materials for the slow revival of the textile industry.
“High cost of power is making it difficult for investors in the textile industry to break even. The government therefore needs to increase electricity supply at affordable rates for the sector to maximise production,” said Mr Mohamed when he toured the firm last year.
“Cheap imports are not a threat to growth and expansion of the textile industry in Kenya. What is required is proper managerial strategies to target export markets,” said Mr Mohamed.
But it is emerging that the Eldoret-based firm is operating below capacity due to an acute shortage of raw materials. This is dampening the hopes of North Rift residents who were looking forward to revival of the once vibrant textile sector to provide additional employment opportunities and economic growth.
“We are producing an average of 10,000 bales against a capacity of 70,000 bales annually, which has impacted negatively on our operational costs,” said the firm’s managing director, Prof Thomas Kipkurgat, in an earlier interview.
The textile firm was bought by Moi University at Sh205 million after it was placed under receivership more than 10 years ago.
The company used to produce a total of 15.73 million metres of fabric before it was placed under receivership in 2000, following massive administration and financial mismanagement.
The fabric comprised 5.5 million meters of dyed cotton, 7.7 million metres of printed cotton, and 1.17 and 0.55 million metres of dyed and printed polyester/viscose, respectively.
Stakeholders want the deal with Moi University reviewed, arguing that it has failed to meet the set targets.
“The factory has achieved little success despite the government and development partners pumping colossal sums of money to revive it. The factory has been converted into a training institution, instead of a textile manufacturing firm that could create employment,” said Mr Charles Mose, a former official of the Kenya National Chamber of Commerce and Industry, Uasin Gishu branch.
Some the company’s facilities have been converted by Moi University to offer aviation courses.
Company workers staged a protest two months ago demanding a pay increase and better working conditions. Rivatex has an estimated 600 workers against 1,500 workers before it was placed under receivership.