Kenya Association of Manufacturers (KAM) | Company Profiles

Spotlight on manufacturing in Kenya

As Vision 2030 approaches, we shine a light on the current state of one of Kenya’s key industries

Screenwriter: Phoebe Harper | Project Manager: Lloyd Hanley

In maintaining a competitive and industrialized economy, Kenya’s manufacturing sector plays a vital role. As an industrial powerhouse, the country’s manufacturing sector contributes an average of around 10% to the national GDP each year and, as a key channel for local job creation, it is responsible for sustaining national production and exports. . Agribusiness, automotive components, garments and textiles, and electronics are just a few of the major segments that contribute to Kenya’s manufacturing prowess.

Over the past two decades, the progress of the sector has accelerated through the establishment of Special Economic Zones (SEZs), industrial parks and various clusters. All this comes with a relatively reliable infrastructure, a strong private sector and a robust workforce. The development of the East African Community (EAC) Customs Union has been instrumental in expanding trade opportunities in the sector to harness and boost intra-regional trade.

Under Kenya’s Vision 2030, the Big Four Agenda and Kenya’s Industrial Transformation Agenda, commitments have been made to increase the sector’s contribution to GDP to 15% this year, by revitalizing strategic manufacturing segments, including textiles and agro-industry.

With progress well underway, we are catching up with the industry association that champions sector cohesion by defending the best interests of all major players.

Interview: Kenya Manufacturers Association (KAM)

To keep Kenya competitive, we speak with Mucai Kunyiha, President of KAM, as the association continues to advocate for a thriving manufacturing sector

Africa Outlook (AO): Can you tell us about the origins of KAM – how it came about and its initial vision?
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Mucai Kunyiha, Chairman (MK): The Kenya Association of Manufacturers (KAM) is the representative body for manufacturing and value-added industries in Kenya. Founded in 1959, we have evolved into a vibrant, dynamic, credible and respected trade association that unites industrialists and provides a common voice for business.

• The Association is committed to making a difference in Kenya, ensuring the socio-economic well-being of Kenyans, and therefore, reducing inequalities within the community. We do this through our Environmental, Social and Governance (ESG) arm – uKAMilifu.

• uKAMilifu is a Swahili word meaning complete/wholeness. It’s an ideology that talks about creating holistic solutions together. uKAMilifu seeks to amplify and implement the human impact initiatives that local industry has been a part of over the past 62 years of KAM’s existence.

AO: Since its inception, how has KAM developed and progressed in relation to its key objectives and the messages it tries to convey?
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MK: Since our inception, we have taken important steps as an association.
• We have built a sustainable organization through membership growth. We have also expanded our regional presence across the country. This has been key in improving our advocacy work at the county level.
• We have classified our members into 14 sectors. The sectors are defined according to the classification of the United Nations Industrial Development Organization (UNIDO) and the type of raw materials that the respective companies import or the products that they manufacture. In this way, members of a particular sector form a cohesive group with common concerns. This allows various sectors to prepare common policy positions for joint advocacy and negotiation with relevant government institutions to address issues of greatest concern.
• Through our advocacy, we have seen businesses grow and grow. Some of the advocacy issues include:
– Taxation and tax policy
– Buy Kenya, build Kenya
– Fight against illicit trade
– Access to affordable and reliable energy
– Development of infrastructure such as roads and water
– Provision of public goods for manufacturing
– Reduce regulatory burden for Kenyan manufacturers
– Inclusiveness and sustainability.

Through our advocacy, we hope to increase the sector’s contribution to Kenya’s GDP and thereby accelerate the creation of jobs and wealth for all. We also want to intensify our exports to regional and international markets.

AO: What do you find most exciting about Kenya’s manufacturing sector?
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MK: Kenya’s manufacturing sector is constantly transforming, adapting to emerging trends. This has allowed us to stay ahead of our regional counterparts, especially in the EAC.
• We are innovative and have grown tremendously over the years, with an increased ability to meet demand for our goods and services. The industry has seen tremendous development over the years, growing by leaps and bounds.
• As an association, we continue to build the capacity of our members, equipping them with the knowledge and capabilities to embrace automation and embrace key sustainability principles to secure the future of Kenya’s manufacturing sector.

AO: On the other hand, what are his biggest challenges?
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MK: Although we have made significant progress in growing our manufacturing sector, we continue to face challenges that affect our competitiveness and productivity. Without these two elements, the local manufacturing sector will not be able to venture into local and export markets.

Competitiveness involves a country’s ability to produce goods and services that meet international standards while simultaneously maintaining and increasing the incomes of its people over the long term. On the other hand, increased productivity ensures efficient use of the resources available to the economy, such as labor, capital, and business expertise, to produce goods and services.

Some of the key issues that we believe are hampering the competitiveness of Kenya’s manufacturing sector include heavy-handed and ever-changing regulations, the cost and consistency of energy, transport and logistics costs, and a voracious and sometimes capricious. Unfortunately, the cost associated with this is added to the price of an end product, which hurts our competitiveness.

AO: What trends are currently transforming the industry in your region? How do you respond to them?
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MK: The post-COVID-19 world is going to be even more competitive. Just like Kenya, many countries have identified huge investment opportunities for their regional and international markets. Nurturing the nascent and emerging business opportunities uncovered by the COVID-19 pandemic will be essential in this new world. We have identified 76 opportunities to invest and add value through our Manufacturing Resilience and Sustainability Strategy: An In-Depth Industry Report.

Among them, the manufacturing and supply of medical equipment, investments in the adoption of new technologies, increased attention to the development of local value chains to reduce dependence on imports, the circular value chain, the agro-industry, integration of the regional value chain of leather and packaging materials. We are confident that with the support of our government, we will be able to follow these trends and grow our local and international markets.
AO: Do you have any ongoing projects that you would like to highlight?
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MK: Currently, we are focusing on expanding our export capacity. This is particularly crucial now, to enable us to take advantage of the opportunities presented by various trade agreements, such as the Economic Partnership Agreement (EPA) between Kenya and the UK, the African Continental Free Trade Area (AfCFTA ) and trade with the European Union (EU). .
We also encourage our members to embrace automation, to enable them to increase their production. Additionally, we are promoting e-commerce among Kenyan manufacturers to improve market access.

AO: How do you see KAM evolving as an association in the next five years?
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MK: Over the next five years, I hope to see KAM present in every corner of Kenya, representing manufacturers from every county. I also aspire to have a manufacturing sector that competes on an equal footing with highly industrialized countries.

Andrew B. Reiter