Manufacturing sector an area where investment opportunities exist. Initially developed under the import substitution policy, there has been a shift to export-oriented manufacturing as the thrust of Kenya’s industrial policy. The sector plays an important role in adding value to agricultural output, providing forward and backward linkages, hence accelerating overall growth.
Value of Manufacturing Sector Output (at Current Prices)

Value of output (Kshs Million) 

**Provisional
Source: Economic Survey 2001
The manufacturing sector now comprises of more than 700 established enterprises and directly employed over 218,000 people in 2000. A wide range of opportunities for direct and joint-venture investments exist in the manufacturing sector, including agro-processing, manufacture of textiles garments, assembly of automotive components and electronics, plastics, paper, chemicals, pharmaceuticals, metal and engineering products for both the domestic and export markets.

Paper Products

Kenya has an integrated pulp and paper mill plant producing paper and paper board from renewable forest products. However, the country imports coated white lined chipboard and other boards for packaging, printed paper and other types of paper. Investment opportunities exist in the production of paper from other raw materials such as bagasse, sisal waste, straw and waste paper.
Textiles and Apparels
Textiles, garments and apparel manufacturing has a very high potential in Kenya. The basic raw material inputs such as dyes and chemicals are imported, as are all textile equipment and most spare parts.
Sufficient, experienced, productive and inexpensive labour is locally available. In addition, a well-developed infrastructure, dependable air and sea transport links and support services required by the textile manufacturers are already in place to enhance the development of the industry.
Investment opportunities exist in Manufacturing Under Bond scheme and in the Export Processing Zones for the production of items such as yarn, and garments.

Metal and Engineering

Kenya has a basic metal sector making a variety of downstream products from local and imported steel scrap, steel billets and hot rolled coils. Kenya imports steel billets, coils, wire rod and wires, steel plates, sheets, steel scrap and pig iron. The country possesses a broad-based metal products sector with various independent engineering, foundry and metal-work workshops.
Opportunities exists in the development of a nucleus foundry making precision castings that are then processed into precision components.

Vehicle Parts and Assembly

The major vehicle component industry is rapidly developing to supply the needs of a few motor vehicle assemblers to meet certain local content requirements. The plants assemble passenger cars and commercial vehicles. Kenya has over 20,000 new registrations annually. Products such as tyres, tubes, batteries, springs, radiators, brake pads, cables, rubber components and filters are now produced locally. A number of firms fabricate bodies for commercial vehicles. A small-scale bicycle assembly venture and a large ship repair operation exist as well. Opportunities exist for the manufacture of components for use by local assemblers and for export to regional markets.

Electrical Equipment

Investment potential exists for the production of motors, circuit breakers, transformers, switch gears, irrigation pumps, capacitors, resistors, insulation tape, electrical fittings and integrated circuit boards for both the domestic and export markets.

Electronics

Although Kenya’s electronic industry is still at its infancy, a number of firms in the assembly, testing, repair and maintenance of electronic goods are in operation and are rapidly increasing their scope of activities to meet the growing demands of the industry.
Key opportunities for direct investments, joint-ventures and subcontracting are possible in assembly of a wide range of electronic goods in Kenya, especially within the Manufacturing Under Bond and Export Processing Zones Programmes. These include the production of :-
• Consumer electronics such as colour television sets, Video Cassette Recorders (VCRs), printers, floppy disk drives, and Compact Disk Roms (CD-Rs);
• Telecommunication equipment such as printed circuit boards, and transmission equipment; and,
• Support industry items such as cables, cords, die casting, metal plating, etc.
With a labour force which is well equipped to meet the skill requirements of the industry and the relatively large domestic and export market potential of electronics in the region, Kenya offers an enormous potential for the manufacturing and assembly of electronic items.

Plastics, Chemicals and Pharmaceuticals

The plastics industry is well-developed and produces goods made of polyvinyl chloride (PVC), polyethylene, polystyrene, and polypropylene. All raw materials are imported in the form of granules.
A large number of pharmaceutical formulations are produced locally in the form of tablets, syrups, capsules, and injectables, but the bulk of pharmaceuticals are imported. There is room for additional investment in the pharmaceuticals industry.
Many attractive investment opportunities in chemicals, pharmaceuticals and fertilisers remain unexploited. These include the production of PVC granules from ethyl alcohol; formaldehyde from methanol; melanine and urea; mixing and granulating of fertilisers; cuprous oxychloride for coffee bean disease; caustic soda and chlorine based products; carbon black; activated carbon; precipitated calcium carbonate; textile dyestuff; ink for ball-point pens; and gelatine capsules.