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Rivatex revival stalls as high costs, raw material shortages bite
Rivatex East Africa Limited in Eldoret City in this picture taken on January 13, 2023.
Eldoret-based textile manufacturer Rivatex is operating far below capacity despite the government and development partners pumping billions of shillings into its revival and upgrade as part of Kenya’s industrialisation drive.
The firm is currently running at less than 10 per cent of its installed capacity due to several challenges including high operational costs—mainly from electricity bills—inadequate raw materials and inefficient production processes caused by obsolete equipment.
According to the Parliamentary Committee on Trade, Industry and Cooperatives, Rivatex has made minimal market impact despite substantial investments over the past two decades.
The committee blamed high operational costs, particularly exorbitant power charges, for stifling growth.
“The high cost of energy remains the biggest challenge to the company’s ability to break even and turn a profit. While neighbouring countries such as Ethiopia and Uganda attract investors by offering competitive electricity tariffs, Kenya has yet to implement an industrial power policy that offers better rates,” said the committee’s chairperson Bernard Shinali, during a recent tour of the firm.
The company reported a loss of Sh347.6 million in the financial year ending June 2023, pushing cumulative losses to more than Sh3 billion.
The committee has recommended that government departments support the company by placing orders for its textile products.
“Government departments should buy from Rivatex to help it generate more income and improve production efficiency,” Mr Shinali said.
The firm also struggles with an unstable supply of cotton, low working capital and rising global prices for fibres, dyes and chemicals—factors that disrupt smooth operations.
Committee vice-chairperson Maryanne Keitany noted that obsolete ginnery machinery hampers steady raw material supply.
“We need to align the cotton value chain by providing farmers with quality seed and upgrading some ginneries to enhance production so the company can operate at optimal capacity,” she said.
Kenya produces an average of 5,300 tonnes of cotton annually against a demand of about 38,000 tonnes. The shortfall, worth an estimated Sh17 billion, is imported from neighbouring countries.
To address this, Rivatex has partnered with the Ministry of Investments, Trade and Industry to distribute Bt and Open Pollinated Variety (OPV) cotton seeds worth over Sh60 million to farmers.
“Our goal is to reduce cotton imports by boosting local production through certified seed distribution, attractive producer prices, and the revival of collapsed ginneries and cooperative societies,” said Rivatex Managing Director Stanley Bett.
The company has also implemented cost-cutting measures to meet international market demand. In the past three years, it has recycled 32,800 kilograms of fibre waste worth Sh9.8 million into yarn for making school uniforms.
“We now import polyester directly from manufacturers instead of buying locally from resellers, saving Sh2.5 million per forty-foot container,” Mr Bett added.
He urged the government to allocate more working capital so the company can procure critical raw materials, boost production capacity and become profitable enough to venture into export markets.
The government recently injected Sh650 million into modernizing Rivatex, in addition to financial support from development partners.
The factory has also secured a Sh3 billion loan from the Indian government and another Sh3 billion from the Treasury to replace obsolete machinery.
