State of the Manufacturing Industry in Kenya

The manufacturing industry in Kenya only accounts for 14 percent of her Gross Domestic Product (GDP) despite the fact that Kenya is the most industrially developed country in East Africa.

The 14 percent is just a slight increase since independence as the sector has stagnated since the 1980s. This stagnation is as a result of shortages in hydroelectric power, high energy costs, decreased transport infrastructure and dumping of cheap imports from other countries.

Urbanization has made the industry and the manufacturing sector very important to the Kenyan economy which has in turn increased the GDP per capita. Nairobi, Mombasa and Kisumu, which form the three largest urban centers in Kenya, are also areas where industrial activities has been concentrated greatly. These are the areas where food processing industries and the fabrication of consumer goods have dominated.

There are a number of manufacturing companies in Kenya which include food processing and agricultural companies, mining companies, energy companies, forestry and fishing companies and motor vehicle manufacturers. Out of these, the most common ones in the country include small scale consumer goods such as furniture, textiles etc., agricultural product based, horticulture, oil refining, aluminum industries, steel, lead as well as cement industries.

Some of the manufacturing companies in the countries included B.O.C Kenya Ltd, Williamson Tea Kenya Ltd, British American Tobacco Kenya, Baumann Co. Ltd, Carbacid investments Ltd, Bamburi Cement Ltd, East African Breweries Ltd, Crown Berger Ltd, Mumias Sugar Co. Ltd, East African Cables Ltd, Unga Group Ltd, E. A. Portland Cement Ltd, Eveready East Africa Ltd, Athi river Mining, Kenya Orchards Ltd and many others totaling to 30.

The year 2014, however, saw many manufacturing companies either closing down or relocating from the country. In October 2014, more than 300 people were rendered jobless after Cadbury Kenya closed down. In the same year on October 1^st, more than 100 people were left without jobs when Eveready East Africa, a company that had dominated the Kenyan market for 47 years and which was the largest dry-cell battery maker in the region shut down its factory in Nakuru. During the month of September, the same year of 2014, the Hong Kong Shanghai Banking Corporation formally left Nairobi after only operating for three years.

In 2006, Colgate Palmolive stopped manufacturing in Kenya completely and opted to tender out its plant after it had reviewed its marketing as well as the distribution of operations. Reckitt Benckiser, a company that was known as being a destination for home and personal care closed its manufacturing plant in Kenya and then contracted Orbit Chemical Industries Ltd to produce its household brands. In the month of May 30^th 2014, Tata Chemicals Magadi announced that it was planning to scale down its operations by closing down its main factory and this, in the process, rendered more than 200 permanent workers jobless.

Many of these companies that have exited the Kenyan market have blamed it on the taxation system in the country which is high hence making the operations unbearable, the energy cost in Kenya is also very high hence forcing the companies to increasing their prices and this lowers the purchasing power and the infrastructure. Kenya’s infrastructural sector in in a dilapidated condition especially the roads. This has always affected the transportation of raw materials to the factories as well as the transportation of finished products to the markets.

When the Jubilee government came in power, people had hope but this hope was short-lived. Corruption became full swing, the youths became more frustrated as so are the business community. The cost of energy is still high and given the fact that energy is a crucial component in the development of the manufacturing sector, its high cost has brought it down.