@BusinessDaily

Slow delivery hits Kenya’s Agoa exports to US market

4 months ago, 12 July 05:46

By: Kevin J Kelley

Washington DC

Kenya's inability to deliver on orders has been blamed for the country’s inability to fully benefit from the apparel industry's duty-free access to the US market, trade officials have said.

Jas Bedi, the head of Kenya's Export Promotion Council, told a Washington forum that it takes an average of 135 days to deliver goods to US buyers from the time an order is placed in Kenya.

"That's too long in today's market," Mr Bedi said, adding that China delivers orders from US purchasers in as little as 45 days.

"Speed is becoming the number-one consideration in international trade," Mr Bedi said, noting that it is no longer the case of a US fashion business having summer, winter and spring collections. “Now, there's a new collection every week."

Mr Bedi said the 75 days it takes for fabric from Asia to reach manufacturers in Kenya accounts for most of the lag in delivery of finished products to the US. The varieties of fabrics needed to keep pace with the rapidly changing demand are not made available to Kenyan factories in a timely manner.

Shortening the supply chain would enable Kenyan manufacturers to reap greater gains through the US preferential trade programme known as the Africa Growth and Opportunity Act (Agoa).

Some 40,000 Kenyans currently hold Agoa-related jobs, according to the US trade agency.

Kenya ranks among the top supplier of apparel to the US, having exported $340 million (Sh3.4 billion) worth of such goods to the US last year.

Kenya’s total exports to the US under the Agoa plan peaked at Sh35.2 billion in 2015, before declining to Sh32.7 billion last year according to the Economic Survey data.

"Regional integration would make a big difference," Mr Bedi said. If fabric was produced in sufficient quantities in East Africa, Kenyan manufacturers would become far more competitive, Mr Bedi said.

He, however, warned that the investment needed to achieve that goal -- up to $100 million -- will be difficult to secure due to concerns over long-term returns.

Agoa is set to expire in 2025 and US officials have warned that duty-free exports from Africa are unlikely to continue after that date.

Members of the US Congress are "signalling that they probably will not" extend Agoa's envisioned 25-year lifespan, Constance Hamilton, the top US trade official for Africa, told the forum in Washington.

Interruptions or inadequacies in power supplies are another factor handicapping Kenya's textile-export sector, Mr Bedi said.

Improvements are on the horizon, however, as factories in Naivasha and at other locales begin to tap geothermal energy to run their turbines, he noted.


Read More


Category: business news economy markets corporate lifestyle opinion

Suggested

1 hours ago, 20:57
@AfricaNews - By: Abdur Rahman Alfa ...
Tanzania govt says World Bank not scrapping $300m loan | Africanews

The fund withdrawal was reportedly over the policy of refusing reentry of pregnant school girls to public schools after giving birth. The position has been strongly defended by government in the past. ...

Category: africa africa_business business news
10 hours ago, 11:44
@StandardMedia - By: Reuters
Pentagon to counter China, Russia threats by scaling back troops in Africa

‘’This realignment specifically projects to reduce forces by about 10 percent over the next several years,’’ said Commander Candice Tresch. ...

Category: business news
12 hours ago, 09:57
@StandardMedia - By: Afp
Volkswagen plans to spend 44 bn euros in e-cars by 2023

As part of the new strategy, VW will convert two existing German plants into assembly lines for all-electric vehicles from 2022. ...

Category: business news
12 hours ago, 09:47
@StandardMedia - By: Afp
Trump welcomes trade agreement with China

US President Donald Trump said China has sent a list of trade concessions that has agrees with our requirements. ...

Category: business news
12 hours ago, 10:18
@StandardMedia - By: Reuters
Tanzanian army lands in cashew region to manage crop purchases

Soldiers arrived in southern Tanzania to oversee government management of the country’s cashew nuts. ...

Category: business news
1 hours ago, 20:57
@AfricaNews - By: Daniel Mumbere
Botswana offers tourist visa-on-arrival to boost business | Africanews

The Southern African nation will offer tourist visas on arrival effective November 24, the president announced. ...

Category: africa africa_business business news

@BusinessDaily

Slow delivery hits Kenya’s Agoa exports to US market

4 months ago, 12 July 05:46

By: Kevin J Kelley

Washington DC

Kenya's inability to deliver on orders has been blamed for the country’s inability to fully benefit from the apparel industry's duty-free access to the US market, trade officials have said.

Jas Bedi, the head of Kenya's Export Promotion Council, told a Washington forum that it takes an average of 135 days to deliver goods to US buyers from the time an order is placed in Kenya.

"That's too long in today's market," Mr Bedi said, adding that China delivers orders from US purchasers in as little as 45 days.

"Speed is becoming the number-one consideration in international trade," Mr Bedi said, noting that it is no longer the case of a US fashion business having summer, winter and spring collections. “Now, there's a new collection every week."

Mr Bedi said the 75 days it takes for fabric from Asia to reach manufacturers in Kenya accounts for most of the lag in delivery of finished products to the US. The varieties of fabrics needed to keep pace with the rapidly changing demand are not made available to Kenyan factories in a timely manner.

Shortening the supply chain would enable Kenyan manufacturers to reap greater gains through the US preferential trade programme known as the Africa Growth and Opportunity Act (Agoa).

Some 40,000 Kenyans currently hold Agoa-related jobs, according to the US trade agency.

Kenya ranks among the top supplier of apparel to the US, having exported $340 million (Sh3.4 billion) worth of such goods to the US last year.

Kenya’s total exports to the US under the Agoa plan peaked at Sh35.2 billion in 2015, before declining to Sh32.7 billion last year according to the Economic Survey data.

"Regional integration would make a big difference," Mr Bedi said. If fabric was produced in sufficient quantities in East Africa, Kenyan manufacturers would become far more competitive, Mr Bedi said.

He, however, warned that the investment needed to achieve that goal -- up to $100 million -- will be difficult to secure due to concerns over long-term returns.

Agoa is set to expire in 2025 and US officials have warned that duty-free exports from Africa are unlikely to continue after that date.

Members of the US Congress are "signalling that they probably will not" extend Agoa's envisioned 25-year lifespan, Constance Hamilton, the top US trade official for Africa, told the forum in Washington.

Interruptions or inadequacies in power supplies are another factor handicapping Kenya's textile-export sector, Mr Bedi said.

Improvements are on the horizon, however, as factories in Naivasha and at other locales begin to tap geothermal energy to run their turbines, he noted.


Read More

Category: business news economy markets corporate lifestyle opinion

Suggested

1 hours ago, 20:57
@AfricaNews - By: Abdur Rahman Alfa ...
Tanzania govt says World Bank not scrapping $300m loan | Africanews

The fund withdrawal was reportedly over the policy of refusing reentry of pregnant school girls to public schools after giving birth. The position has been strongly defended by government in the past. ...

Category: africa africa_business business news
10 hours ago, 11:44
@StandardMedia - By: Reuters
Pentagon to counter China, Russia threats by scaling back troops in Africa

‘’This realignment specifically projects to reduce forces by about 10 percent over the next several years,’’ said Commander Candice Tresch. ...

Category: business news
12 hours ago, 09:57
@StandardMedia - By: Afp
Volkswagen plans to spend 44 bn euros in e-cars by 2023

As part of the new strategy, VW will convert two existing German plants into assembly lines for all-electric vehicles from 2022. ...

Category: business news
12 hours ago, 09:47
@StandardMedia - By: Afp
Trump welcomes trade agreement with China

US President Donald Trump said China has sent a list of trade concessions that has agrees with our requirements. ...

Category: business news
12 hours ago, 10:18
@StandardMedia - By: Reuters
Tanzanian army lands in cashew region to manage crop purchases

Soldiers arrived in southern Tanzania to oversee government management of the country’s cashew nuts. ...

Category: business news
1 hours ago, 20:57
@AfricaNews - By: Daniel Mumbere
Botswana offers tourist visa-on-arrival to boost business | Africanews

The Southern African nation will offer tourist visas on arrival effective November 24, the president announced. ...

Category: africa africa_business business news
Our App