State to pump more money into struggling Rivatex

Business
By Stephen Rutto | Jul 31, 2023
Paul Korim at his cotton farm in Serwok village in Salawa Baringo County. [File, Standard]

The government is set to pump more money into Rivatex East Africa after the textile firm failed to make profits despite a Sh5 billion modernisation plan five years ago.

The Parliamentary Committee on Trade, Industry, and Cooperatives said the state-owned company cannot expand its operations due to poor returns and difficulty in sourcing cotton, the main raw material, locally.

The James Gakuya-led committee said the cash enabled the firm to procure state-of-the-art textile processing machines, but lack of raw material and market hampered progress.

The Embakasi North MP said Rivatex was still depending on the Exchequer to run its operations and needed more money to help it sustain itself.

The committee was told that the once-giant textile manufacturer was importing raw material from Tanzania and Uganda.

“Our visit was to understand how it does its business. We have noted that it (Rivatex) still relies on the Exchequer to run its operations,” the departmental committee chair said during a visit to the firm on Saturday.

He added: “The company has not attained a level where it can rely on itself. It was previously run down and closed at some point. We appreciate the steps taken by management, but more money is required for them to attain full capacity.”

He said the country’s largest apparel producer was yet to be accredited to export textiles to foreign markets.

Meet standards

The committee chairman said a proposed additional allocation would enable the company to complete modernisation, scale up operations and meet standards for international markets.

He added that the next phase of Rivatex's revival plan would create more jobs.

Rivatex East Africa, the committee chairperson said, has been placed in a proposed Export Processing Zone in Eldoret and is set to enjoy cheaper electricity costs accorded to EPZs.

Departmental committee member Maryanne Kitany said cotton production would be part of the modernisation plan.

Kitany said the next phase of modernisation would see the company’s workforce increase from the current 1,300 to more than 5,000, in the next five years.

Rivatex Managing Director Thomas Kipkurgat said the committee promised an increased allocation to grow local cotton and to prepare the company for the export market.

Prof Kipkurgat said the company had been approached by two international cloth makers who are planning to set up a base in Eldoret.

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