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Nairobi Gate Industrial Park Launches Textile Park within SEZ

Staff writer
April 15, 2024, 12:18 p.m.
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Nairobi Gate Industrial Park, the first Special Economic Zone (SEZ) with a fully consolidated customs-control area in East Africa, has launched a one-of-a-kind manufacturing and warehouse park for the textile and apparel industry in Kenya.

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Nairobi Gate Industrial Park, the first Special Economic Zone (SEZ) with a fully consolidated customs-control area in East Africa, has launched a one-of-a-kind manufacturing and warehouse park for the textile and apparel industry in Kenya.

The 100,000 sq.m Textile Park will benefit tenants and create job opportunities in Kenya’s second-largest manufacturing industry after food processing. 

It will support the Kenyan economy significantly, attracting foreign direct investment (FDI), especially in bulk infrastructure projects.

The 100-acre Nairobi Gate Industrial Park is being developed by Impact North, a company formed by unlisted SA property investment group Improvon, and private equity investor Actis.

Dean Shillaw, Managing Director at Impact North, said: “The cotton, textile, and apparel industry in Kenya is rapidly growing – and this has resulted in an increased demand for modern manufacturing and warehouse facilities to enhance efficiencies and productivity.”

“Kenya is expected to become Africa’s textile and apparel hub. Nairobi Gate’s excellent location and SEZ status provide several financial and non-financial benefits for licensed tenants.”

“With available land and capital, Nairobi Gate could be the first, and leading development in East Africa to offer a dedicated and sustainable textile park.”

As an approved Special Economic Zone (SEZ), Nairobi Gate offers fiscal benefits including corporate tax rate reductions from 10%-30%, zero-rated VAT, reduced withholding taxes, preferential import duties, excise duty, import declaration fees, a 100% investment deduction allowance and lower business permit fees.

Shillaw believes that Kenya stands a good chance of capitalising on geo-political uncertainty in Ethiopia, traditionally a mainstay of international textile and apparel manufacturers because of the introduction of industrial parks in that country during the late-1990s.

The global Covid-19 pandemic, US-imposed sanctions in January 2022 that ended Ethiopia’s preferential market access under the Africa Growth and Opportunity Act (AGOA) – its largest client - and ongoing conflict in northern Ethiopia, has forced international manufacturers occupying more

than 2 million square metres of industrial space in Ethiopia to rethink their location.

According to the group’s 2022/2023 Annual Report, Kenya is the largest manufacturing facility outside of Sri Lanka employing over 4 000 people. The factory, one of the most extensive apparel manufacturing facilities, accounted for nearly 20% of Kenya’s total apparel exports, and generated 39% in revenue - second to Sri Lanka at 46%, with Ethiopia contributing 7%.

As a result of its stability and high economic growth, Kenya has emerged as a preferred location for many international tenants, especially since 2021, despite the country’s lack of A-grade warehouse parks and facilities.

Shillaw said when looking for new space, tenants primarily consider location, the availability of labour, the available skillset, quality, and size of warehouses as well as utility costs. 

Nairobi Gate’s new Textile Park is in the SEZ closest to the inland container depot and the Jomo Kenyatta International Airport. It furthermore offers easy highway access to regions north and south of

Nairobi via the Thika Highway and is close to labour markets.

The consolidated customs-control area provides for sophisticated weighbridges and offers all regulatory services such as Kenya Revenue Authority (KRA), Kenya Ports Authority (KPA), Special Economic Zones Authority (SEZA), customs, and other agencies under one roof, significantly smoothing the administrative burden and increasing efficiencies.

“The development of the textile park at Nairobi Gate will address a significant need in the market while taking advantage of a growing textile industry, considering the increasing demand for clothing globally, and the lack of A-grade warehouse space in Nairobi,” he said.

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