Kenya has opened its first intimate production facility to ramp up production to the attractive global market.
The Athi River-based Hela Clothing Limited, a $6 million (KSh617 million) investment has already exported $1.5million (KSh154 million) worth of undergarment in six months for Calvin Klein, Victoria Secrets and other licensed brands owned by US clothing conglomerate Phillips-Van Heusen Corporation (PVH Corp).
According to data provided by Euromonitor, the global underwear market was worth just over $110 billion (KSh11.3 trillion) two years ago.
Speaking during a tour of the factory during a Textile and Apparel Stakeholders meeting, Industry, Trade and Investment Cabinet Secretary Adan Mohamed said it portends good news for the sector at a time when the Textile and Apparel industry globally expects a tougher year due to uncertainties of the global economy.
“Their export target of $50 million (KSh5.1 billion) worth of intimate goods to US and Europe in 2017 is representative of the type of new investments we encourage. That the company will be employing 5,500 workers by 2018 is the direct effect of our efforts to spur industrialization,” said Mr. Mohamed.
Mr. Mohamed announced the that Kenyan government has partnered with Kenya’s textile and apparel sector to serve the local market with locally produced textile in line with enforcing the ‘Buy Kenyan, Build Kenya’ policy.
“Kenyans will buy export quality wear for as low as between KSh100-600 through a discounted clothing fair set for next week in Nairobi and other major cities throughout the year,” said Mr. Mohamed.
He said the ongoing initiative will also help in establishing a new supply-chain of export quality clothes whilst creating 100,000 new jobs from the current 179,000 the sector employs.
It will also help reduce Kenya’s clothing import bill that stands at over USD 815 million (KSh83.9 billion) worth of textiles and apparel.
Mr. Mohamed sought to assure Kenyan textile and apparel manufacturers of government support ahead of a tougher year complicated by the strong U.S dollar, implications of US new administration’s new policy regime on AGOA and the EU-EPA deal.
On AGOA, he said “we haven’t got the indication yet that there will be any change of policy direction but if theirs is need we will renegotiate the deal.”
Buoyed by the AGOA extension for another decade, Kenya expects to protect and grow its share of US markets from the 0.4%, increasing exports by USD 1billion in the next 3 years.
On the EU-EPA deal, Mr. Mohamed was confident that Kenya’s decision to sign and ratify the deal would not affect the manufacturer’s European markets.
He said: “The effect of BREXIT vote on Kenya as related to Britain won’t be a problem because we can always have bilateral talks on trade. However, on the long-term, Kenya and Britain have a great relationship due to their colonial bond, so I do not see a significant challenge to our markets.”
The Export Processing Zones have hugely contributed to the industrialization agenda in fiscal terms with the annual wages bill paid to Kenyan EPZ employees in 2015 standing at Sh.8.4Bn, local sourcing of supplies and services stood at KSh23.9 billion from manufacturing investments worth KSh7.4 billion.
The total figure for AGOA exports stood at KSh38 billion, which is also directly contributed to the direct employment of 45,000 in 2015 showing the potential the industry has with increased investment in the amplifying the textile and apparel value chain .