Connect with us

Edition 01

Furniture makers to reap dividends



In this year’s Kenya’s budget speech, Finance minister Uhuru Kenyatta’s announced that he was amending the Public Procurement and Disposal Act to make it mandatory for government ministries and other public entities to give first priority in tendering to local suppliers.

The move makes suppliers such as Victoria Furnitures Limited managing director Vinod Hemraj Shah a happy man for its cuts costs across all sectors including manufacturing, assembling, agriculture, extracting and mining.

“A few years ago we were into local manufacture of furniture in a very big way and had 600 employees. But stiff competition and preference by many customers for cheaper imported furniture made us cut back and now we only have 300 employees,” he says.

“With this government policy, we intend to aggressively expand our local manufacturing unit and hire more people.” Previously, the Act did not make it mandatory that public entities procure from local companies and this disadvantaged local suppliers.

“The procurement law gives discretion to the procuring entities to apply preferences and reservations in public and disposal in consideration of economic and social factors,” said Mr Kenyatta. “This has led to limited participation by local industries in the procurement process even where economic and social development factors would justify otherwise.”

Experts predict that the policy will promote participation of local industries in driving growth, creating more jobs, and diversifying exports.

Victoria Furnitures doesn’t sell directly to government ministries or institutions, but has customers who buy its products then re-sell to the institutions. Its other major customers are large companies, banks and learning institutions.

While most of its locally manufactured furniture is made from hardwood, imports are mostly MDF board (also called particle board or chipboard) products from the Far East markets of China, Malaysia, Indonesia, Singapore and Turkey.

Continue Reading
Click to comment

You must be logged in to post a comment Login

Leave a Reply