Another Sri Lankan garment-maker opens apparel factory in Kenya

Sri Lankan textile and apparel manufacturer MAS Intimates (MAS) has inaugurated a new factory in Kenya’s Machakos county. The facility is expected to create 3,000 new jobs in the area. Attending the ceremony was President Uhuru Kenyatta. His attendance underscores the importance the Kenyatta government gives to the textile and apparel sector. It has been identified as the one of the four pillars in Kenyatta’s so-called “Big 4” agenda.

MAS is aggressively expanding its operations in Kenya taking advantage of its favourable investment policies, availability to cheap labour and  preferential access to Western markets. The growth of MAS in Kenya is another success story of the Kenyatta administration’s attempt at attractive better paying manufacturing jobs. The Sri Lankan firm currently employs over 3,000 people and is intending on expanding its workforce to around 4,200 people by the end of 2022 and to over 7,000 by 2025. The firm has also injected over US$8.5m into the Kenyan economy and exported over US$24m worth of garments since it began operations in Kenya in 2022. The rapid growth and financial success of MAS can also be cited by officials as a success story for the country’s Export Processing Zones (EPZs). These are designated areas in the country with favourable infrastructure and tax conditions that are aimed at promoting and facilitating export-oriented investments. MAS’ Kenyan operations are located within an EPZ in the town of Athi River in Machakos county. Another textile firm Royal Garments Industries, operating under the export processing zone (EPZ), will also employ 2,600 more employees.

Kenya is becoming a regional textile and apparel manufacturing hub. This is due to the country’s favourable policy and geographic conditions. In addition to the development of EPZs and government policies aimed at attracting apparel manufacturing, Kenya has the necessary human and production resources needed by the sector due to the country’s long history of apparel and textile manufacturing. In addition, the country enjoys preferential access to the US through the African Growth and Opportunities Act (AGOA) and the European Union (EU) through the EU-East African Community (EAC) Economic Partnership Agreement. Kenya also offers shorter shipping times to Europe and North America when compared with Asian textile manufacturing hubs such as Sri Lanka, India, China, and Thailand. Compounding these advantages is the fact that in recent years Kenya has also become more politically and economically stable than some of these countries, including Sri Lanka itself, which has been undergoing an extended period of civil unrest, and China where the manufacturing industry has been repeatedly disrupted by repeated severe lockdowns related to the country’s zero-covid strategy.

These comparative advantages have drawn several investors into the sector, including Hela Apparel – another Sri Lankan apparel and textile manufacturing company founded by a former MAS executive. The shift in these major manufacturers will likely beget further investment in the country as Kenya now boasts an even larger skilled and experienced apparel sector workforce and better-developed supply chains. This, combined with the country’s other advantages and preferential market access, makes a compelling case for established manufacturers in Asia to expand their operations to Kenya’s EPZs.

 

References

'Big Four Action Plan', The Presidency, 16 May 2022

'President Kenyatta commissions MAS Intimates Kenya factory', KBC, 11 May 2022

'Kenya: President Kenyatta inaugurates a new textile factory', Agence Ecofin, 11 May 2022

'Uhuru officially opens clothing firm at Athi River EPZ', The Star, 11 May 2022

'The key to Kenya’s industrial growth', D+C, 08 May 2022

'MAS Holdings unveils global expansion drive', Knitting Industry, 09 March 2022

'Farming, textiles hold key to Kenya’s exports', The East African, 08 March 2022

‘Overview of trade between Kenya and the European Union (EU)’, ODI-FSD, December 2021

'MAS Intimates Kenya has sold apparel worth Sh165mn since setup', The Star, 17 September 2021

'MAS Holdings set to open a new factory in Kenya', Just Style, 20 November 2019

'MAS Holdings to start Kenya operations in early 2020', Fibre2Fashion, 16 August 2019