'You must innovate to stay abreast with the trends'

Kega Fashions owner Angela Kariuki (left) and Prof. Josphat Igadwa Mwasiagi. [File, Standard]

Kega Fashions, a local manufacturing company is one of the many suppliers that felt the wrath of the fall of giant retail stores.

Kega, which produces a wide array of apparel ranging from intimates to sportswear and industrial wear, says they have endeavoured to stay afloat despite the many challenges.

“We are not yet out of the woods. The Covid pandemic and the insolvency of some of our major clients went through, served as a major blow,” said Angela Kariuki, the owner of the firm.

She notes that it has taken them resilience to stay in business for decades.

Despite the economic shocks such as the changing market dynamics, Covid-19 and going under of giant retail stores, Kariuki says that there is still a market for products that are yet to be served.

“Times are changing and what we wear has changed, so we are continuously innovating to stay abreast with the trends,” notes Mrs Kariuki

The business-to-business manufacturing company's target market has also had to change due to the dynamics in the textile market. “We have been catering from the girl to the woman and the elderly woman, but with the recent changes in the market, we are also targeting schools with the sports line and the industrial wear,” she said.

To thrive in the business, Kariuki advises, one must continuously listen to its customers, and continuously address a need in the market. “If you are not addressing a need, there will be no demand for your product.

She advises entrepreneurs to produce with a spirit of excellence to pass the test of time. “your service or product should speak for itself. This way, you will have the endurance that is required to not only be relevant and sustain yourself but also to have longevity.”

Like many multinationals and local firms, Kega sources its raw materials locally. The rising cost of external sourcing also forced Kega to change its suppliers to keep its local prices attractive to customers and remain competitive.

Kenya hopes to reverse the poor performance of the manufacturing sector to the GDP through the Kenya manufacturing vision dubbed Buy Kenya Built Kenya.

Despite the persistent decline in the manufacturing sector's contribution to the economy, the Kenya Association of Manufacturers (KAM) showed that the value of manufactured output increased from Sh2.11 trillion in 2017 to Sh2.69 trillion in 2021.

KAM noted in its manufacturing priority agenda that the sector created 336,800 jobs in both public and private sectors compared to 343,700 jobs created in 2017.

In the past, Investment, Trade and Industry Cabinet Secretary Moses Kuria proposed the imposition of a 25 per cent duty on imported garments, including second-hand clothes.

This was in a bid to revive Kenya’s cotton industry. The CS said the government would ensure cheap fabrics are available to encourage Mitumba traders to buy new locally-made clothes.

There were also attempts to ban the mitumba business, if seen through, about two million Kenyans stand the risk of losing their jobs.

This is on the back of a report by the Kenya National Bureau of Statistics (Kebs) in 2021 that showed the sector employs two million people, from the total of over 20.6 million in the Kenyan labour force.

In addition, the second-hand clothing and footwear sector contributes over Sh1 billion in taxes every month, amounting to approximately Sh12 billion every year.

Founded back in the 1980s, Kega Fashions is also feeling the heat of the weak shilling and the rising cost of raw materials as well as competition from Mitumba business.

“Part of the reason we are still in business is that we produce for ourselves, the African woman has a unique shape, so we can’t take everything that comes from outside and expect it comfortably fit us,” she said.

In addition, she is optimistic about the government's intervention through higher import duty.

Kariuki says the textile manufacturing industry is a tough market, “it is not a competitive ground, therefore you need to come up with more innovative and creative ideas to differentiate yourself from what is out there”.

Kariuki who is a second generation of Kega management says that its founders started with their own investment, later on injecting capital through borrowing.

“Right now we have a challenge accessing affordable financing,” she said.

In 2020, the Center for International Enterprise (CIPE) conducted a study that found that nearly 55 per cent of businesses surveyed reported experiencing less access to finance in November and December 2020, as compared to previous years before the pandemic.

According to KAM's manufacturing priority agenda, total credit advanced to the manufacturing sector has been increasing, from Sh314.05 billion in 2017 to Sh462.6 billion in 2021. Almost 100 per cent of the credit was from the commercial banks.

For Kariuki, with limited resources, knowing how to reduce costs and optimise efficiency helps them manage costs.

“Getting skilled labour is a challenge for every business. High turnover of talent will cost the company more because you have to keep retraining,

“The right attitude of employees is equally important- the right attitude is easily malleable,” she said, adding, “you don’t have to get very highly skilled, but if you can get someone who is teachable and willing to learn, then you can grow organically”.

Despite surviving the shocks in the market, Kariuki reckons that the family business; manufacturing apparel started to empower women to regret not jumping ship when they should have, “especially with a particular client. We saw the signs, but still against what our guts felt, we went with it”.

Sibling rivalry and poor governance, she cautions, have contributed to the fall of retail giants such as Tuskys and Nakumatt.

Other factors include succession planning, family conflicts, lack of trusted advisors, varying visions between generations, lack of financial education and poor strategic planning.

There is also the issue of children neglecting the family capital thus suffering internal conflicts.

She notes that Covid-19 was the most trying time for them as most of their clients went under with their unpaid debt.

Another challenge faced by the manufacturer is the unavailability of raw materials locally, “I wish they were available locally, it would make things easier”.