Establishment of more export processing zones will promote value addition and boost use of local raw materials, the government has said.
Industrialisation Cabinet Secretary Adan Mohamed said this helps create jobs for thousands of Kenyans while providing a viable technology transfer platform for local workers.
Mr Mohamed spoke when he visited Kenya’s newest EPZ facility Hela Clothing in Athi River Township, which produces undergarments for export to America under the brand names Calvin Klein, Victoria Secrets among other licensed brands owned by US clothing conglomerate Phillips-Van Heusen Corporation (PVH Corp).
The Sh600 million investment, which opened doors six months ago, has since exported lingerie and underwear worth Sh160 million.
Mr Mohamed said EPZ facilities had helped Kenya sustain 45,000 jobs. In 2015 Sh8.4 billion was paid out as salaries with another Sh23.9 billion spent on purchasing raw materials and payment for services.
“The manufacturing investments in the EPZ zones are worth Sh7.4 billion while exports under the Africa Opportunity Act worth Sh38 billion went to America. We are deliberately promoting the clothing and apparels sector to help us realise our core goals of having a skilled working population,” he said.
Local retail chains
The CS said Hela was also at liberty to form partnerships with local retail chains, whereby 20 per cent of their finished products will be sold at a subsidised rate that does not attract taxes under the Buy Kenyan, Build Kenya policy.
“Hela’s target of exporting finished products worth Sh5 billion to US and Europe in 2017 is the exact type of new investments we need for Kenya. It currently employs 5,500 workers and by 2018 the number could double, thereby helping us meet our national goals,” he said.
He said the initiative will also help establish a new supply-chain of export quality clothes that could create up to 100,000 new jobs annually from the current 179,000 the sector employs.