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Can Rwanda's textile industry compete in East Africa?

Friday July 01 2016
RT0630UTEXRWA

The garment section at Rwanda's Utexrwa. The plant’s silk unit has been redundant due to lack of raw material. PHOTO | CYRIL NDEGEYA

Relying on imported raw materials such as polyester and cotton stands in Rwanda’s path to revamping its ailing textile and garment making industry.

This reliance makes the textile produced locally uncompetitive on pricing, forcing garment makers to source material from other East African Community member states.

“Polyester and cotton make up 40 per cent of the raw materials used in textile manufacturing,” said Patel Ritesh, chief financial manager at L’Usine Textile du Rwanda (Utexrwa).

Uganda, Kenya, Tanzania and Burundi are major cotton producing countries, a major component in textile manufacturing, however Rwanda is a net importer making what is produced locally expensive.

READ: Competition stifling Rwanda’s only textile factory

Rwanda’s effort to revive the textile industry has been complicated further after the project to commercially produce silk cocoons locally collapsed.
As such, the country imports all the cotton to make yarn to feed its only composite textile factory.

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The silk unit needs 21,600kg of yarn per year from 172,800kg of cocoons but records show that the country failed to raise the volume even after Utexrwa invested over Rwf500 million.

This investment could have gone to waste as Utexrwa is not about to revive the silk unit. Besides, the unit according to industrial players used old technology which needs to be replaced.

The government plans to invest $3 million to $5 million in setting up the cocoon processing factory to produce silk in the Kigali Special Economic Zone.
With the assured market for the cocoons, it is hoped the farmers would venture back into sericulture.

“We are engaging strategic partners who would be willing to take part in this project, but if we don’t get one by the time of starting we shall proceed as government because this is a project we find very crucial at this particular time,” said Tony Nsanganira, State Minister for Agriculture.

The plan comes after the East African Community (EAC) proposed a ban on imported used clothes and shoes. The aim is to encourage local production and development within member countries.

READ: Fresh plan seeks to revive East Africa’s troubled textiles sector

Rwanda went ahead this financial year to impose a restrictive customs duty on used textiles.

Taxes on used clothes, which majority of Rwandans find affordable, will increase by 1,150 per cent — from Rwf155.6 ($0.2) per kilogramme to Rwf1,945 ($2.5) per kilogramme, effectively making them too expensive as the government intensifies measures to stem its growing trade deficit.

It also wants to protect its nascent manufacturing industry from competition. The government also increased taxes on used shoes by 900 per cent, from Rwf388.9 ($0.5) per kg to Rwf3,889 $5 per kg putting the items out of the reach of low-income earners.

Despite these efforts, Rwanda according to analysts will remain a net importer of textiles.

Information from Rwanda Development Board (RDB) indicates Rwanda tried to produce cotton domestically but abandoned the idea due to the poor quality of cotton the country used to produce.

“The (Rwandan) soil and climate are not appropriate for the production of quality cotton,” according to said.