Car parts manufacturer Auto-Springs East Africa is set to create 600 additional jobs at its newly opened factory in Limuru.
The auto parts firm, which has moved its operations from Athi River to the new plant, already has about 200 employees on its payroll.
The firm, which officially opened the Sh500 million plant yesterday, says it will be hiring both skilled and semi-skilled workers.
The new jobs projection is, however, partly dependent on the government’s resolve in implementing a legal notice that requires car manufacturers to source more than a third of their inputs locally.
“If the government enforces Legal Notice 489 which requires automotive assemblers to have 40 per cent local content in their vehicle assemblies, then we can increase our production to three shifts that would require a workforce of 800 persons,” said Kevin Kihara, the Auto-Springs East Africa board chairman. The company produces wiring harness, leaf springs, bolts and nuts and agricultural machinery.
Kenya imported car parts and accessories worth Sh2 billion last year according to the latest Economic Survey report, an increase from the Sh1.7 billion purchased in 2016 but lower than the Sh3.6bn peak recorded in 2014.
Its current market stretches across East, Central and Southern African countries of Uganda, Tanzania, Zambia and the Democratic Republic of Congo. Among its biggest customers are Isuzu and Mitsubishi who order wiring harness for both buses and trucks. Toyota Kenya is also on its clients list.
Auto-Springs East Africa got funding for the expansion from Mauritius-based SME financier, SFC Finance.
The expansion loan comes months after Ascent Rift Valley Fund, a private equity firm, acquired a majority stake in the company in February.
“We are trying to reduce the level of imports of goods that can be made by companies like ASL without compromising on quality,” said Industrialisation secretary Adan Mohamed.
Mr Mohamed said locally manufactured goods benefit local businesses, boosting the manufacturing sector’s contribution to the economy.
The auto parts firm currently produces 150 tonnes of springs each month.
It has set its eyes on hitting a monthly production of 450 tonnes, its maximum capacity.
The automobile parts manufacturer says it is in advanced talks with Japanese manufacturer, Honda, to supply its local operations.