Kenya’s fledgling cotton industry has been picking up in recent months with a spike in world prices for cotton. But the once-flourishing business still has a lot of obstacles to overcome to increase the country’s cotton supply and modernize its cotton mills, or "ginneries."
Business is brisk at Makueni Ginneries in Kenya’s Eastern province. But it wasn’t always this way.
Real estate agent David Masika purchased Makueni Ginneries 10 years ago. In the first year of operation, he sold 200 kilos of cotton. Last year - for the first time in a decade - Makueni Ginneries turned a profit, selling 600,000 kilos of cotton, or about 1,000 bales. When Masika first purchased the ginnery, his workers were using 1960s technology. Now, his ginnery is one of only four in the entire country that has modernized.
“We got into this vicious circle where we then were wondering, do I completely modernize this thing when I don’t know whether the cotton is coming? About a year ago, as the cotton now started building up, we have also started modernizing the ginnery," he said. "We have got half of the ginning machinery now.”
Masika’s concerns about cotton supply and equipment are echoed all across Kenya’s cotton and textile industries. The once-vibrant cotton industry took a nosedive in the 1990s and is only now starting to get back on its feet. But it might be too little too late.
Kenya is part of the United States’ African Growth and Opportunity Act, or "AGOA," which provides duty-free and quota-free treatment for eligible apparel articles and other products. The aim is to strengthen African countries’ economies by increasing access to U.S. markets.
According to Kenyan government figures, apparel exports under AGOA have tripled from 2001 to 2006. But, there is a requirement that countries must be able to source the raw materials for their products regionally by September 2012 or else lose their eligibility under AGOA. And that has Kenya’s cotton and textiles industry in a panic.
“If an extension period of two or three years by AGOA, I confidently say that we will be able to produce enough cotton to meet our local demands to quality for the AGOA market, “ said Micah Powon, chief executive officer of the regulatory board Cotton Development Authority, or "CODA."
Powon tells VOA the industry produced 30,000 bales of cotton last year. But the African Cotton and Textile Industries Federation says a more accurate figure is anywhere from 14,000 to 16,000 bales.
Compounding the problem of low cotton supply and poor machinery is African countries’ inability to turn their cotton into fabric, and ultimately clothing. AGOA considers fabric to be a raw resource that must be sourced from other African countries under AGOA rather than being imported from places like China.
Jaswinder Bedi, chairman of the African Cotton and Textile Industries Federation, says that a first step to producing fabric is for the Cotton Development Authority to broaden its focus.
“They need to have people on board who are from the full value chain - people in the apparel business, maybe one board seat; one for the textile millers, one for the spinners,” he said.
CODA chief executive officer Micah Powon says his agency’s priorities at the moment are to set a fair payment to cotton farmers, produce high-quality cotton seed, and modernize facilities.
“If a farmer is given the right price, then he is going to grow cotton," he said. "If our ginneries are going to be efficient, we are going to increase the volumes that are produced within a given unit of kilowatt. “
As of mid-August, Powon, Bedi and other industry officials were calling on Washington to extend AGOA’s raw materials provision past the September 2012 deadline. Officials say they are confident that U.S. Congress will do so.