A third-generation knitting giant

The ear-piercing noises of yarn knitting machines fill Ken Knit Kenya factory. Floating from the ceiling are winding yarns with different colours feeding flat knitting machines to make sweaters, Masaai shukas, and blankets below.

On the factory floor are busy workers feeding up, monitoring, and controlling the machines. In the background, another set of workers is knitting intricate parts of fabrics such as buttons and embroideries by hand.

For over three decades now, this has been the norm at the Eldoret-based factory. Every year it churns out hundreds of thousands of garments for schools, corporates, wholesalers, and retailers.

The company, started in 1966 by three brothers - Gulabchand Shah, Somchand Shah, and Keshavlal Shah - perhaps gives a glimpse into the mastery of avoiding traps that destroy many family businesses in Kenya.

Generation after generation, the Shahs have grown the knitting business to become East Africa’s biggest textile company.

The empire started with an initial Sh50,000 capital, Ravi Shah, the finance director says. Now the firm’s worth stands at Sh1.8 billion ($15 million). Part of the success is hinged on the diversification of investments. “So, we are in textile manufacturing here at Ken Knit and across the road, we are into real estate,” says Mr Shah.

Small beginnings

The company began as a small enterprise with one knitting machine. Now it has hundreds of modern machines.

“We started with one machine, producing hand-knitting yarn. Over time, we saw there was a demand, so we started a spinning unit. We also started the blanket department. Then we went into knit-wear sweaters and over time…we made Maasai shukas, pillows, kikois,” he adds.

Mr Shah who is the third generation in the business says his forefathers first built Ken Knit in Kitale, Trans Nzoia. They relocated because there were fewer Asian schools in Kitale at the time, but soon Eldoret was good for their business.

Each department is managed by a different family member. Hard work, Mr Shah says, is the mantra championed by their parents.

“We do almost 130 tonnes of hand knitting yarn, two-ply yarn, and four-ply yarn. For blankets, we do over 120,000 pieces a month. In terms of sweaters, in the knitwear department, we are doing close to 70,000 pieces over 24 hours,” he says.

Their main customers are wholesalers and retailers. “Schools come directly to buy from us and we also sell to corporations,” he adds.

They source most of their raw materials from South East Asia. But the wool is supplied by local traders. “We import acrylic yarn as a raw material which we then process here.”

The process of making a fabric starts with the dying of yarn (depending on cloth colour). Weaving is then done by a knitting machine, after which the overlapping machine steams the fabric.

Lastly, it is embroidered and packed for distribution. Besides making fabrics for its usage, Ken Knit also exports local wool to China, India, and Europe.

The Shah brothers have steered Ken Knit through a period of exponential growth. When their grandfather started the business, he had only a handful of employees.

When their father took over, the headcount rose to 12 and earned a doctorate to improve his management skills. Today Ken Knit has 1,100 people on its payroll. But the growth has not been without challenges.

Biggest threat

The high cost of raw materials is the biggest threat the manufacturer, one of the biggest employers in Uasin Gishu, faces. “We are struggling in terms of importation of raw materials. Currently, the banks are only giving about Sh591,048 to Sh1.2 million ($5,000 to $10,000)…we are not able to buy more dollars to pay off our suppliers. So, if we do not pay our suppliers we are not able to get our raw materials,” he says.

It needs between Sh11.8 million and Sh23.6 million ($100,000 and $200,000) to pay suppliers.

“To get that Sh23.6 million ($200,000), we will have to buy {dollars} every day for 30 days to pay off our suppliers before they release the goods. So, that cycle, if not looked at very quickly, we fear a situation where we close the company until we can get enough dollars to pay off supplies then they send us the goods,” he says.

As the dollar woes play out, their decision to diversify has proved wise, carrying along the family wealth. Besides Ken Knit, they are in real estate, hospitality, and agriculture. They own Rupa Real Estate, Rupa Mills, Naiberi River Campsite and Resort in Kaptagat, and a fruit and vegetable processor, Rupa Fruit and Vegetable.

“We are looking at putting up a new spinning unit in the factory which will help and guide two yarn which we will be able to convert into hand yarn."