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Although Kenya’s manufacturing industries are small, they are the most sophisticated in East Africa. The manufacturing sector has been growing since the late 1990s and into the new century. The manufacturing companies in Kenya are relatively diverse.
The transformation of agricultural raw materials, particularly of coffee and tea, remains the principal industrial activity. Meat and fruit canning, wheat flour and cornmeal milling, and sugar refining are also important. Electronics production, vehicle assembly, publishing, and soda ash processing are all significant parts of the sector.
Assembly of computer components began in 1987. Kenya also manufactures chemicals, textiles, ceramics, shoes, beer and soft drinks, cigarettes, soap, machinery, metal products, batteries, plastics, cement, aluminum, steel, glass, rubber, wood, cork, furniture, and leather goods. It also produces a small number of trucks and automobiles.
The most common Manufacturing Industries in Kenya includes:
- Small-scale consumer goods (plastic, furniture, batteries, textiles, clothing, soap, cigarettes, flour),
- Agricultural products.
- Oil refining.
- Aluminum Industries.
- Steel Industries.
- Lead Industries.
- Cement Industries.
- Commercial ship repair.
Manufacturing Companies in Kenya
Kenya is a favourite destination for investors willing to put their money in manufacturing. While the country is not endowed with the mineral wealth most of its neighbours ﬂaunt, it more than makes up for it, thanks to the following: one of the best workforces in Africa, a productive agricultural sector and hence a dependable source of raw materials for agro-based manufacturing, a fairly versatile ﬁnancial services sector, bankable telecommunications and proximity to port facilities.
Kenya also has locational advantages as the gateway and a natural launch pad to the markets of the mostly Landlocked East and Central African countries like Uganda, Southern Sudan, Rwanda, Burundi, parts of northern Tanzania and Eastern Democratic Republic of the Congo (DRC).
According to the Economic Recovery Strategy for Employment and Wealth Creation Report, the manufacturing sector in Kenya is a major source of growth, still with high potential for growth and investment. The role of the manufacturing sector in Vision 2030 is to create employment and wealth.
A set of key target areas have been identified and specific goals set to steer industrial growth. These include the development of Special Economic Zones (SEZs), Industrial Parks, Industrial Clusters, promotion of small and medium scale manufacturing firms, development of niche products, commercialization of research and development results,attraction of strategic investors in strategic sectors, i.e. iron and steel industries, manufacture of fertiliser, agro -processing, machine tools and machinery, motor vehicle assembly and manufacture of spare parts.
To promote development in the target areas, projects are designed and implemented through a Public,Private, Partnership (PPP) framework.
Some key Kenyan manufacturing subsectors that have increased demand in the recent past include galvanized iron sheets, cement,cigarettes, beer and Wheat ﬂour. All of these have increased production between 2003 and 2005, particularly cement which is a good indicator of economic activity. On the consumer goods side, goods manufactured locally include stationery and grooming products.
Industrial and manufacturing zones in Kenya
To harness resources in different parts of the country, the Government promotes region—speciﬁc industrial and manufacturing clusters. Necessary infrastructure and services are provided to stimulate development of these clusters.
Investment opportunities exist in development of Industrial Parks including Small and Medium Enterprises (SME) Parks and Export Processing Zones (EPZs), which offer a range of ﬁscal incentives that help in reducing start—up and operational costs, thereby making exporters internationally price-competitive.The investor will be able to recoverinvestments either through rentingor selling the units.
Potential locations for Industrial Parks include Nairobi due to its proximity to most important markets, Eldoret due to its location in a high-potential agricultural area and access to airport facilities, Kisumu due to easier access to regional markets and availability of raw materials such as limestone(Koru), chemicals (e.g.ethanol from sugar factories).
A Special Economic Cluster (SEC) will be set up in Mombasa to allow for easy importation of necessary raw materials and exportation of finished goods. The project will include an agro – industrial zone, incorporating activities like blending and packing of fertilisers, tea and coffee and a consolidated meat and ﬁsh processing facility. The second SEC will be in Kisumu to allow for access to regional markets and availability of limestone to support cement,chemicals and metal industries and agro-processing through increased horticultural production along the lake shore.
SMALL AND MEDIUM ENTERPRISES (SME) PARKS in Kenya
Plans to develop SME industrial parks in key urban centres in Kenya will entail development of High Tech Parks, Which will be set up in Nairobi because of its proximity to most important markets, Eldoret because of its location in a high—potential agricultural area and access to airport, Mombasa, Kisumu and Nakuru are other strategic centres.
Micro and Small Enterprise (MSE) 2030 Initiative Project
The Government is in the process of developing centres of excellence for micro and small enterprises (MSEs) to promote transfer of technology,build capacity and market MSE products, The centres will be developed in each province, With specialisation in given sub-sectors. Due consideration Will be made to the resource endowment in each region.
Land has been set aside for MSEs Operators across the country. Most of these sites are partially serviced and have great investment potential for private investors. To revolutionise and modernise the MSE sector, concerted efforts are required towards upgrading the following sub-sectors; agro-processing such as fruit processing, essential oil extraction, vegetable processing and cereal processing, animal products and ﬁsh processing, milk and meat processing, hides and skins and ﬁsh products. Other areas are chemical,electrical and electronics, building and construction, metal and metal works and motor vehicles accessories. These present major investment opportunities.