Kenyan manufactures decry high number of cheap leather products from China, driving them out of business
The manufactures are now demanding government protection in order to cushion them from further losses and bankruptcy.
“There is unfair competition from counterfeit products, tax avoidance, illicit imports, dumping and extra taxes on imported raw materials which have reduced competitiveness”, the association said in Nairobi yesterday, during the launch of its 2017-21 five-year strategic plan presided over by Industry, Trade and Cooperatives Cabinet Secretary Adan Mohamed.
The manufactures added Eighty per cent of shows in the local market are from China and India denying small traders revenues.
This, coupled with limited access to the market, lack of skills beyond basics in production, low expertise to produce finished leather and leather products, and high cost of capital are hurting small businesses.
“We want standards to be put in place to protect the local market from cheap imports,” said KFMA chairman, James Mwaura.
The CS on his hand said that the government was committed to revive the industry and will set up a revolving fund to support SMEs in the sector. He said the ministry is in the final stages of negotiating for a $300,000 kitty with the PTA Bank, and an additional $1million will be set aside by the Kenya Industrial Estates for lending SMEs at “preferential rates”.
“One of the biggest challenge for SMEs is access to finances. We want to address this. We will also create clusters in each of the 47 counties that will support footwear and leather sector in the country,” Mohamed said.
KFMA also wants strengthening of the subcontracting policy to improve links between large and small players. It has also called for investment in industrial skills by enhancing the capacity of institutions and partners, as well as called on ordinary Kenyans to support the fragile industry.
“We also need to sensitise Kenyans to buy Kenya,” Mwaura said.
Mr. Adan assured the sector that the government will create room for small players at the proposed Leather Industrial Park in Machakos whose first tannery is expected to be operational in the next 18-24 months.
“The leather park will provide a one-stop shop for processing of leather and finished products. It will be open for domestic and foreign investors,” Mohamed said
The 500-acre project in Athi River has attracted three Indian investors interested in setting up tanning factories at the proposed park, which will be funded fully by the private sector at an estimated cost of $170 million.
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