Textile company C&H Garments is set to begin large-scale production for the local market as the firm aims to supply the huge demand created by a sharp decline in second-hand clothes since the government imposed heavy import duties on them.
This comes after the textile factory, which launched its operations in 2015, started producing garments for export markets in Europe and US.
However, demand for locally made garments remains relatively low as the market is still dominated by second-hand clothes and cheap imports from countries like China, Turkey and Italy.
A mini-survey by Rwanda Today shows that at market price a C&H shirt that costs Rwf15,000 ($17), can be bought for between Rwf10,000 ($12) and Rwf12,000 ($14) from shops selling products imported from China.
The same shirt imported from Turkey or Italy costs Rwf15,000 ($17). The market price for a C&H collar T-shirt costs between Rwf7,000 ($8) and Rwf10,000 ($12) depending on the quality, while a collar t-shirt imported from China costs Rwf6,000 ($7).
With a newly expanded factory, C&H currently produces up to 2,000 t-shirts daily, each going for a wholesale price of Rwf3,000 ($3), the price for shirts ranges between Rwf5,000 ($6) and Rwf10,000 ($12). They also make clothes for children.
“We have started production for the local market using a separate, dedicated factory. However, people still prefer second-hand clothes and are yet to appreciate our products,” said Ericsson Ndagijimana, the human resources and marketing manager at C&H.
He said the company understands current market demands, especially on volumes, quality and price, but they are struggling with high transport costs for raw materials, which determines the final price.
“We have set prices that we think are affordable to most people, but high transport costs because all our materials are imported increase the final price of a garment,” said Mr Ndagijimana.
While C&H’s capacity is 70,000 pieces of clothing per month, it is currently operating below capacity.
“Currently, we produce 2,000 pieces everyday and this can be expanded to 5,000. But, we need consumers to have confidence in our products,” Mr Ndagijimana added.
However, while the rationale for dis-incentivising second-hand clothes in 2016 was to promote local garment industries, there was no medium-term alternative for the poor who largely depend on second-hand clothes. This has left many without affordable options.
Other alternatives like locally-made clothes made from Kitenge fabric, which used to be the preferred fabric, have also become expensive due to increased demand.
Boosted by the “Made in Rwanda” policy, the market is witnessing a growth in the number of local garment makers most of whom are making dresses, shirts, jackets, jewellery, bags, shoes and carpets out of Kitenge fabric.
However, the items are becoming unaffordable for many as dealers say the fabric is imported.
A Kitenge outfit costs between Rwf15,000 ($17) and Rwf18,000 ($21) at wholesale, yet a few years ago it cost between Rwf5,000 ($5) and Rwf7,000 ($8).
The government waived taxes on imported raw materials and accessories for the apparel and footwear industries, but this has not yet translated into meaningful price reductions.
This is because the rebates only apply to big industrial producers, yet most local cloth makers are still small and they buy their materials from local traders who are not eligible for the tax waiver.
“Our items remain too expensive for many people. Although the government tells us about “Made in Rwanda” we have not seen a factory making Kitenge fabrics in the country. We get our fabric from Democratic Republic of Congo and other countries, which makes the final product expensive,” said Mukansanga Julienne, the proprietor of Hope and Peace handicraft.
Authorities recently arrested people who were smuggling clothes and leather products from the Democratic Republic of Congo and Uganda into the country.