In recent years, many African countries, such as Kenya, have attracted the attention of many multinational textile and garment industries due to their low labor and land prices. East Africa has the highest level of development, a minimum wage of about US$177 per month, labor productivity is among the top in Africa, and the government has established a textile city to welcome investment from foreign companies. These conditions have made Kenya favored by foreign companies.
A report titled “Kenya Wealth 2014” shows that high-end fashion brands such as Armani, Burberry, Gucci, Ermenegildo Zegna and Boss are most likely to open stores in Kenya within the next 10 years. South African retail supermarket chains Foschini and Edgars will open a store in Nairobi’s “Garden City” mall before the end of this year. In addition, Nairobi, the capital of Kenya, will host the “Made in Africa” international apparel exhibition this year. The country’s textile and apparel industry hopes to undertake industrial transfers from China and other places and obtain more processing orders from multinational apparel companies. Therefore, many international companies have begun to consider transferring orders to Africa, including some Chinese textile companies.
Building special economic zones: welcome investment in the textile industry from China and other countries
The Kenyan government is currently stepping up the construction of three Special Economic Zones (SEZs), including the garment manufacturing industry. The SEZs are located near the three regions of Kenya: Kisumu, Mombasa, and Lamu. , covering an area of approximately 2,000 square kilometers, is expected to create nearly 10 million jobs in the next 30 years. At the same time, the Kenyan Parliament may pass a legislative bill on special economic zones in the near future. The government will set up tax holidays for land and tax incentives, and allow companies to import products duty-free, etc., to help companies carry out manufacturing activities in special economic zones. The SEZ will mainly focus on industrial activities, especially the manufacturing production of textiles and clothing. Enterprises carrying out processing activities in the special economic zones will enjoy lower tax rates, and the regulatory obstacles faced by enterprises in the zones will also be significantly reduced compared with enterprises outside the special economic zones.
Adan Mohamed, Cabinet Minister of Kenya’s Ministry of Industrial Enterprise Development, said that the new special economic zone will be built in 2-3 years. The zone will mainly target foreign textile and clothing companies, especially those from China, Vietnam and Textile and apparel companies in South Africa. Currently, Kenya has a free trade zone in Mombasa and some export processing zones (EPZs), but no special economic zones. In 2012, nearly 30% of enterprises in EPZs were garment manufacturing factories, accounting for 56% of total exports in EPZs and 30% of private investment in EPZs. According to the Kenya Economic Survey Report 2013, in the first three quarters of 2013, Kenya’s garment manufacturing industry grew by more than 4% year-on-year. The government has established special economic zones in the hope of promoting the development of Kenya’s manufacturing industry. It aims to increase the proportion of manufacturing to 20% of the country’s GDP by 2030, in order to achieve the goal of becoming a middle-income country.
Investment in Textile City: An Effective Way to Expand Africa’s Influence
In recent years, many Chinese textile companies have also set their sights on Kenya, such as Li & Fung Group of Hong Kong. The group is the world’s leading multinational consumer goods procurement, logistics and distribution group and is currently considering investing in the textile industry in Kenya’s Athi River Export Processing Zone. In July this year, representatives of Li & Fung Group visited Kenya and met with Adan Mohammed, Secretary-General of the Kenyan Ministry of Industry and Commerce Development, hoping to explore business opportunities for the development of the textile industry in Kenya through this visit. Adan Mohammed said that the garment manufacturing industry can create jobs in the short term and help Kenya solve the unemployment problem faced by the country. The country’s Ministry of Industry and Commerce Development is sparing no effort to develop Kenya’s textile industry, hoping to export processing in As River Town The district established a textile city to solve the current industrialization problems faced by the processing zone. Li & Fung Group specializes in the supply chain management of a variety of commodities, including clothing and many world-brand products. Adan Mohammed said that the company’s investment in the Kenyan market will help it further expand its influence in Africa. It is understood that Kenya’s Ministry of Industrialization and Enterprise Development is organizing the establishment of a textile city. After the construction of the textile city, it can provide land leases to foreign companies for cotton ginning, spinning, and the production of fabrics, home textiles, clothing, clothing accessories, etc. It is expected that at least 100 textile companies will invest in the Textile City, which is expected to create about 200,000 new jobs by the end of 2016. The Textile City is part of the “National Industrialization Development Route” recently implemented by the Kenyan government, aiming to increase the country’s gross domestic product (GDP) by 350-520 billion shillings per year in the next 16 years.
In addition, Jiangsu Lianfa Textile Co., Ltd. also plans to set up a textile factory in Nivasha, Nakuru County, Kenya. Kenya Radio stated that the company is expected to invest 4 billion shillings in the construction of a textile factory. After the factory is put into operation, the annual production volume will be approximately US$150 million and it will create approximately 30,000 local jobs. Adan Mohammed said that with the increasing cooperation between China and Kenya, the projects initiated by Lianfa Group will promote the revitalization of Kenya’s textile industry and promote the economic development of Lianfa Group. He said that at present, the main problem hindering the development of Kenya’s textile industry is the cost of investment in electricity production.���High, the textile mills being planned will help push Kenya’s textile industry back on track.
Brands are not “alone”: consumers expect to buy high-end fashion
Spanish clothing brand ZARA, British shoe brand Clarks, Armani, Burberry, Gucci, etc., many well-known international brands either intend to enter Kenya in the next few years, or have cooperated with local merchants in Kenya to sell products. The reason is In recent years, Kenya’s economy has developed rapidly, and there are more and more middle-income people. These people also have strong purchasing power, and their market demand for high-end designer clothing has exploded.
In addition, Kenya is home to many staff members of the United Nations Environment Program, other United Nations departments and foreign investors, which has also become one of the factors driving international brands to enter Kenya. More and more Kenyans are exposed to and gradually learn about many international brands when traveling or through modern media such as the Internet. Kenyan consumers are eager to buy more fashionable and sophisticated products. Their demand for designer brands and clothing are becoming more and more sophisticated. Many international fashion brands have also taken this opportunity to flock to Nairobi, the capital of Kenya, in order to compete in this increasingly popular market. Get a share of the booming market. In June last year, Spanish fast fashion brand ZARA signed a distribution agreement with Kenyan clothing chain Deacons. At the same time, Deacons also assumed the distribution business of Italian high-end clothing brand Massimo Dutti. Kemaya Africa is a Kenyan fashion company that sells high-end women’s clothing. The company’s manager, Saikipai, said that the average price of clothing sold in Kemaya Africa stores reaches 40,000 shillings. The main target customers of this type of clothing are women who pursue fashion. They aspire to wear the kind of fashion that blends international fashion styles with local Kenyan styles.
