Egypt a Possible Destination for Kenyan Manufacturers

With the rising energy cost in Kenya, many manufacturers in the East African country are considering moving and Egypt is a destination on the top of the list for some.

In an interview with Reuters, Kenya Association of Manufacturers (KAM) CEO Betty Maina said, “A lot of multinationals are considering their production in cheap markets. Many have considered relocating production to Egypt.” She said that South Africa and Egypt were the countries most likely to be considered as new locations for Kenyan manufacturers. And utilizing renewable energy is a top priority in order to cut costs – which South Africa and Egypt are incorporating already.

However, electricity costs should not be the only factor that Kenyan manufacturers take into consideration. Egypt is having a difficult time in its production sector even with its most reputable and largest factory, Giza Spinning and Weaving Co. The plant, employing over 5,000 people, has been in existence since 1979 but is facing problems that could force it to shut down.

A source in the textile industry told Alternative Energy Africa that at least one-third of Giza Spinning’s employees continue to strike after uprisings from the revolution that began on January 25. The source estimates that production levels have decreased by a minimum of 30%.

“Most of the manufacturers are unsure what is going to happen next and don’t want to invest in anything,” the source disclosed adding that usually stocked materials were no longer available. “No one is taking any risk and efficiency is going down because of the instability and workmanship. One day workers arrive at the factories, the other days you aren’t sure if they’re going to strike.” The person added that while the factories are producing, they are unsure if targets will be met and this is unlikely to change until a more stable government is produced.

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