- Kenyan clothing firm Royal eyes a loan investment from IFC to set up a new factory
- The US$15 million fund will be used in the Royal factory located in the Athi River Export Processing Zone in Nairobi
- IFC will provide technical and safety expertise to improve the environmental and safety performance
Kenya—The International Finance Corporation (IFC) has proposed a US$15 million loan investment in Royal, a clothing firm, to support the implementation of its new project.
The proposed IFC investment seeks to support Royal Apparel EPZ Limited (RAL), Royal Garment Industries EPZ Limited (RGI) and Royal Clothing EPZ Limited (RCL) -(together, the Royal Garments Group of Companies, Royal or the Group), a Kenyan garments manufacturing company based in Athi River, to expand the Cut-Make-Trim (CMT) operations in Kenya by constructing a new factory (the Project).
The project cost is estimated at US$20 million. IFC’s proposed investment in Royal is a US$15 million corporate loan to support the Group in implementing the Project, with a balance of US$5 million through Equity.
The funds will be used in the Royal factory located in the Athi River Export Processing Zone in Nairobi.
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The project helps finance the Kenyan garments manufacturer to expand its operations.
The textiles and apparel sector is a strategic priority in Kenya’s economic development agenda.
The project is expected to have various positive economy-wide effects, including the direct creation of 3,700 formal manufacturing jobs, mostly for women in underserved population groups, and a larger number of indirect jobs and the generation of valuable foreign exchange earnings for Kenya from increased exports through the expansion of CMT operations.
The Project is also expected to employ people primarily coming from underserved, low-income populations with limited education and skills and no formal employment history.
Beyond providing jobs, the IFC investment will help enhance employees’ technical and soft skills through various training programs and policies.
Additionally, the Group is also committed to creating a more inclusive workforce, particularly for women.
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It will also boost the Group’s productivity, thereby improving the Group’s overall competitiveness.
This improvement in a domestic apparel-producing company will be achieved through a multi-pronged approach, including optimisation of sewing line staffing, automation of specific tasks and integration of real-time data analytics.
Furthermore, training local staff on these tools will create a pool of skilled professionals, benefiting the entire industry in Kenya.
The project is anticipated to have meaningful demonstration effects, as improvements in productivity and export expansion are likely to encourage other domestic companies in Kenya’s textile and apparel sector to adopt similar approaches.
During Project implementation and supervision, IFC will provide technical, environmental and social (E&S), health, and safety expertise to improve the overall environmental and safety performance and introduce international best practices to the client.
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