Asia and the Middle-East may be thousands of kilometres away but the heat stemming from rapid industrial expansion of some of their economies such as China and Saudi Arabia is fast causing discomfort among sisal spinning firms in Kenya. Most sisal spinners now operate below capacity following an acute shortage of fibre as producers ship out their consignments to the global market — lured by higher prices. Statistics show that export prices of sisal fibre have been on a steady climb since 2000, driven by demand from industrial consumers. The export price of a tonne of sisal fibre has more than tripled to Sh108,817 as at July 2013 from Sh35,196 in 2000. Locally, producers are paid an average Sh50 per kilo of fibre delivered or Sh50,000 per tonne — which is less than half of the price that the international market offers. This has triggered a mad rush for exports with the Kenya Sisal Board (KSB) indicating that more than 80 per cent of the crop produced is now exported, with local spinners having to cope with the remaining 20 per cent. “It is a fact that local industries in the country do not get enough stocks to meet their demand as most of the sisal produced is exported,” says KSB managing director Naomi Kamau. In 2012, Kenya produced 27,866 tonnes of sisal fibre out of which 24,052 tonnes were exported — an equivalent of 86.3 per cent. The country earned Sh2.55 billion from the exports in 2012 while domestic sales fetched Sh365 million. Local spinners were left to scramble for the 4,198 tonnes, which was less than half of the national demand. Kenya has an annual sisal fibre consumption demand of slightly more than 10,000 tonnes. Ms Kamau says that spinners mainly rely on small-scale farmers who hardly grow enough sisal to meet the local market’s requirement. “You will realise that most small scale holders grow sisal along rivers and roads, or in their homesteads; this can hardly satisfy the quantities that local processing factories require,” she says. As a result, some spinning factories are forced to import sisal from neighbouring Tanzania to meet their demand. “It is an interesting scenario that some of the factories import fibre to meet their customers’ orders,” Ms Kamau says. An official at Premier Bags and Cordages, a local company that manufactures sisal items, confirmed that local supply hardly meets their demand. “We require 100 metric tonnes of sisal every month but we receive about 70 metric tonnes as most of the sisal produced in the country is exported,” says Mr Susand Sahoo, the company’s financial controller. The main export destinations for Kenyan sisal are China, Portugal, Spain, Morocco, Egypt, Italy, Saudi Arabia, South Africa, Japan and Belgium. China and Saudi Arabia blaze the trail as the main importers of Kenyan sisal — driven by the need for raw material to drive growing industrial production. Other than the traditional cordage and bag markets, demand for sisal has spread to new areas in the recent past. The fibre is now used to produce high quality carpets and buffing cloth for various industrial polishing applications. Sisal pulp is used in the manufacture of speciality papers, cores for wire ropes, dartboards and various handicraft. In addition, sisal is used in plaster reinforcement. Kenya has remained firmly in the radar of most industrial nations because of its potential in sisal production. The country is ranked third in the production of the commodity globally, after Brazil and Tanzania. Analysts say Kenyan farmers are missing out on an opportunity to tap into global demand for sisal fibre. The world market requires 400,000 metric tonnes of the commodity annually, but only 300,000 metric tonnes are produced. The plant, despite its huge economic potential, is slowly being reduced to an orphan crop. Experts say that lack of research centres in the country continues to impact negatively on sisal production despite increased global demand for the commodity. Ms Kamau notes that lack of research has been a major setback to the revival of the industry which was ranked second after coffee in terms of foreign exchange earning in 1972. The only research institute in country, Thika High Level Sisal Research Station, was closed in 1972 when demand for sisal and the world price dipped. “The sisal industry requires research to come up with new high yielding varieties and processing technologies,” says Ms Kamau. There are, however, plans to revive the research unit in conjunction with the Kenya Agricultural Research Institute (Kari). The sisal crop’s woes started in the 1940s when synthetic fibres were invented taking a substantial share of the industry, depressing the price of the crop at the world market, said the MD. “Synthetic fibres were perfect substitutes for sisal since they were cheap, closer to the market and more abundant enabling them to make quick inroads into the hard fibre market,” she says. By the 1970s competition from synthetics had dealt the crop a deadly blow. Small-scale production dropped drastically as the number of large estates fell from 64 in 1963 to 11 in 2004. Sisal in Kenya has mainly been a plantation crop with 10 estates currently growing it. Major plantations include Vipingo Plantations, Teita Estate, Kilifi Plantations Ltd, Voi Sisal Estate and Agro Processors International (K Ltd. According to Ms Kamau, about 37,500 hectares in the Rift Valley, Eastern and Coast regions have been put under the crop. The estates produce 75 to 80 per cent of the crop. “The high cost of production arising from use of old processing technologies on plantations thwarted efforts of developing the industry among small scale holders,” says Ms Kamau. Most small scale farmers, she says, have been hindered from processing sisal due to the high cost of equipment. For example decorticators, machines used in the processing of sisal, cost between Sh80,000 and Sh100,000. They are available at Kisumu Polytechnic. The sisal industry employs over 15,000 Kenyans, 9,000 work on estates and the smallholder sector while about 6,000 work in fibre processing and related activities. The sisal informal sector comprises of handicraft, tapestry and sisal baskets makers. The sector offers gainful employment to a large number of women groups and youths both in rural and urban areas. The revenue generated from sisal goes a long way in assisting farmers to meet their financial obligations, ensuring food security and poverty reduction.
Posted on: Fri, 13 Sep 2013 07:26:49 +0000