China'S Textile Exports Form The Largest Trading Partner With Kenya

Kenya is an important economic and trade cooperation partner of China in Africa, a leading demonstration country of China Africa production capacity cooperation, and China's largest trade partner in East Africa. In 2023, China's total textile exports to Kenya will be 843 million dollars, and the total clothing exports will be 660 million dollars.

On October 28-30, 2024, the Chinese textile and clothing entrepreneur delegation jointly organized by the Textile Industry Branch of the China Council for the Promotion of International Trade and the China Knitting Industry Association set foot on Kenya, the second stop of East Africa research. The delegation was led by Lin Yunfeng, President of China Knitting Industry Association, Zhu Beina, Chairman of China Cotton Textile Industry Association, Liu Tiantao, Deputy Secretary General of China Printing and Dyeing Industry Association, Shanghai Jialinjie Textile Technology Co., Ltd., Tangshan Shengxu Textile Co., Ltd., Nantong Xiangyuan Textile Co., Ltd., Ningbo Hailide Import and Export Co., Ltd., Haining Hande Socks Industry Co., Ltd Follow up visit of entrepreneurs and executives such as Guangzhou Tianliyuan Garment Trade Co., Ltd 。

01 Visit to Kenya Investment Agency

The Kenya Investment Agency extended a warm welcome to the delegation's visit. At the meeting, Ms. Hellen Chemuren, Manager of the Investment Department, shared with everyone the economic profile of Kenya. Kenya is the fourth largest economy in sub Saharan Africa, with GDP accounting for 40% of the entire eastern African countries, and per capita GDP of 2099 US dollars. Ms. Hellen highlighted several advantages of investing in Kenya:

1. Kenya has a stable economy and a sound financial system

2. Young people under 35 years old account for 70% of the total population, and their education level is up to 82%

3. Kenya is a dynamic democracy, and the United Nations Africa Headquarters is located in Nairobi

4. It has logistics and innovation center, including 4 international airports, 2 seaports and 2 container inland terminals

5. Property is protected by the Constitution, foreign exchange is not controlled, and there are international dispute settlement and arbitration institutions, so investment safety is guaranteed

6. There are more than 100 export processing zones, 35 special economic zones, and many township and county industrial zones throughout the country.

The person in charge of legal and policy affairs of the Investment Agency mentioned at the meeting that Kenya is one of the largest textile exporters in Africa, but it is short of raw materials. 90% of the surface and auxiliary materials are imported from Vietnam, India and China. The annual output of cotton is 4000 tons, but the actual demand is about 10000 tons. With AOGA agreement, 95% of clothing products are exported to the US market duty-free, and a small part are exported to Uganda, Nigeria, South Sudan, Saudi Arabia and other countries. The majority of Kenyans engaged in the textile industry are local people, and some of them are from Sri Lanka and other South Asian countries. In June this year, Kenya signed a free trade agreement with the United Kingdom and the European Union, granting export tax exemption policies, which means that Kenya has opened the huge textile and clothing market of the European Union. At the same time, he suggested that export-oriented enterprises choose to build factories around Mombasa Port, which can greatly reduce transportation costs.

President Lin said that China's textile industry is moving towards a more green and sustainable direction, which is highly consistent with Kenya's green development philosophy. The enterprises of the delegation have a lot of investment experience in various countries. At the same time, the investment concept is also constantly upgrading. The overseas layout of many countries can effectively reduce and avoid risks, drive the employment of the population of the investment destination country, and promote the local economic development.

02 Visit Kenya Export Processing Zone Authority

In his welcoming speech, Mr. Moses Kipkebut, Manager of the Investment Department of Kenya Export Processing Zone Authority, emphasized Kenya's unique advantages, such as highly skilled labor force, wide popularity of English, highly open economy, no foreign exchange control and the government's firm determination to improve the investment environment. He also pointed out that Kenya has a superior geographical location, which can easily connect East Africa and even the entire African continent through convenient transportation network, and is an ideal springboard for foreign enterprises to enter the African market. For Chinese investors, Kenya's investment opportunities in the whole textile industry chain are particularly prominent. From cotton planting to printing and dyeing, fabric and clothing manufacturing, Kenya has shown great potential. The standard gauge railway from Nairobi to Mombasa Port and from Navasha to Uganda can go deep into rural areas and towns in Africa, and use Kenya's preferential investment policies to drive the development of rural economy.

The delegation members also mentioned that Kenya's electricity charge is slightly higher than that of other neighboring countries, which will increase the production costs of textile enterprises, which is a special concern of investors. Mr. Moses Kipkebut explained that at present, the Ministry of Energy of Kenya is also working with the private sector to promote clean energy to alleviate this problem. It is believed that in the near future, the electricity price will be reduced in a certain proportion.

03 Communication with Kenya Manufacturers Association

The Kenya Manufacturers Association was founded in 1959. Through the cooperation between the government and relevant institutions, it formulated and supported the industrial policies for national economic development, promoted the development of dynamic and prosperous manufacturing industry, and promoted sustainable local manufacturing and exports. The Association has seven offices nationwide and more than 1300 members in 14 different manufacturing industries. The Association also issues various licenses and certificates required for legitimate operation, including legal and policy consulting and services.

President Lin gave a brief introduction to the overall situation of China's textile industry, and mentioned that with the sustainable development and green transformation of the industry, the vision of China's textile and clothing industry is to become a fashion country from a textile and clothing country by 2035. Faced with the intensification of international trade competition and customer requirements, China's textile and clothing industry has had relatively close cooperation and exchanges with Asian countries such as Southeast Asia and South Asia. With the deepening of China Africa cooperation, it is also urgent to combine with African industries to find suitable investment destinations for industrial internationalization layout.

Abel, the head of the association, mentioned that there are currently 8 fabric manufacturing enterprises in Kenya, three of which are cotton fabric enterprises, and the rest of which produce chemical fiber fabrics, but there are almost no cotton yarn enterprises, so there is still a big gap in Kenya's spinning and surface accessories industry. There are 200 large garment factories in Kenya that supply main products to the local market, and another 50 focus on export processing. 65% of the garment factories are located around Nairobi, and 35% are located near Mombasa Port. In Navasha Economic Zone, because of geothermal resources, the price of electricity is relatively cheap, which is suitable for investing in textile enterprises. At the same time, it can be easily transported from Navasha to Uganda by land for sales.

04 Visit TATU CITY Industrial Park

The delegation also visited the TATU CITY project under the Redway Group on the spot. Founded in 2008, the Group is an African multinational foreign-funded enterprise, and is currently the largest developer of industrial new town in Africa, with a total development area of 121.4 square kilometers in Africa. Eight industrial new town projects are located in Kenya, the Democratic Republic of the Congo, Zambia, Nigeria and Ghana, The land is private and debt free, serving 150+customers worldwide, with an investment value of more than 3 billion dollars.

The TATU CITY project is about 25 minutes from the center of Nairobi, with a total investment of 2.5 billion dollars. It is a comprehensive development project integrating commerce, housing and industrial parks, showing Kenya's charm and vitality as an emerging market in Africa. The park has perfect facilities, equipped with 270 security personnel, enjoying preferential tax policies in the special economic zone, and providing 25000 jobs. The land covers commercial areas, real estate and industrial parks (95% of the first phase has been sold, and the second phase is under investment promotion). At present, 88 enterprises have settled in the park, including China Zhende Medical, Sinotruk, Unilever, Heineken CCI (the largest call service center in East Africa), etc. Seeing such an advanced and well-equipped industrial park in Africa gives everyone a glimpse. Although it faces some challenges, such as the high land price may affect the decision of some types of enterprises to settle down, this investigation undoubtedly opens a new window for Chinese textile enterprises to enter Africa.

05 Investigate local garment enterprises

On this trip to Kenya, the delegation investigated five local garment factories.

Mahalakshmi GMT EPZ Ltd

The company has been established for more than 10 years and covers an area of 6000 square meters. It mainly produces yoga clothes, fitness clothes, leisure T-shirts, etc. All products are exported to the United States, with a daily output of 30000 pieces. There are 1100 employees with a salary of 180-190 dollars/month. Most of the workers are skilled workers with 5-8 years of work experience.

Top New Knitwear Manufacturing

EPZ KENYA Ltd

The company has established a factory in Kenya for more than 20 years, specializing in the production of swimwear, yoga clothes and other women's clothing. All the products are sold to the American market, with 1400 employees and a salary of 250 dollars per month. The ratio of male and female workers is 3:7.

Shangcheng Kenya Apparel EPZ Limited

The company mainly produces needles, woven casual clothes, underwear, outerwear, etc., with 3000 employees, wages of 170-180 dollars/month, modern factory design, newer equipment, and more standardized management.

Pragyaa Apparel Kenya EPZ Ltd

The company has about 1000 employees, and the surface and auxiliary materials are imported from China and Vietnam, with a salary of 200 dollars per month.

Royal Apparel EPZ Ltd

The company is an Indian enterprise, producing all kinds of knitted and tatting clothes. There are four factories in the export processing zone, with 4500 employees. 90% of its products are exported to the U.S. market, and its customers include Levis, Wrangler, TCP, Lee, Wal Mart, etc.

　　 Summary

Through this visit to Kenya, the delegation's enterprises have deepened their understanding of the Kenyan market, and also found potential cooperation opportunities. It is hoped that with the joint efforts of both sides to promote economic development and industrial upgrading, more Chinese enterprises can be inspired to pay attention to and participate in the African market, and create a better future for the textile industry in overseas markets.

(Source: China Textile International Capacity Cooperation Enterprise Alliance)