By Emmanuel Nduka Obisue
A new investor, Arise IIP Limited, has officially taken over Rivatex East Africa Limited under a 21-year lease agreement, leading to the loss of about 3,000 jobs as part of a sweeping restructuring plan aimed at reviving the ailing textile firm.
Kenya’s Ministry of Trade, Industry, and Investments formally handed over the Eldoret-based manufacturer to Arise IIP on Thursday, in a move meant to end years of financial losses, debt accumulation, and reliance on government funding.
Under the new arrangement, Arise IIP will retain only 118 of the 625 permanent employees, while all other workers—both permanent and contract, have been released through a redundancy process.
“Even though the government and development partners have been investing billions, the financially distressed corporation has been operating at less than 10% capacity. Its electricity costs currently total KSh180 million, and its staff have not received their salaries for months,” said Industrialization Principal Secretary Juma Mukhwana.
Mukhwana explained that the investor would inject new funding to address Rivatex’s operational and financial challenges, including excessive staffing, high energy bills, and inefficient administrative systems. He added that Arise IIP has already paid KSh94 million in pending salaries.
Arise IIP CEO George Olaka confirmed that the company would pay a set lease fee to the government through the National Treasury and bear all operating expenses. “All existing Rivatex employees have been formally released through a redundancy process in accordance with labour laws to allow for a fresh and transparent staffing structure,” Olaka stated.
Rivatex, once a leading textile producer in East Africa, has continued to post heavy losses despite significant government investment. High energy costs, poor management, and inadequate raw materials have pushed its total losses to over KSh3 billion, including KSh347.6 million recorded in the 2022/2023 fiscal year.
Before being placed under receivership in 2000, Rivatex produced about 15.7 million metres of fabric annually, but operations have since declined drastically.
The Kenyan government hopes Arise IIP’s entry, with its experience running textile plants in Togo, Benin, and other African countries, will restore the company’s competitiveness and boost Kenya’s textile and cotton value chain.
