Government Leases Rivatex Textile Firm to Strategic Partner
The Kenyan government has taken a significant step in revitalizing the struggling Rivatex textile company in Eldoret by leasing it to a strategic partner for 21 years. This move aims to restore operations and ensure the company’s long-term sustainability.
Strategic Partnership with Arise IIP
During a ceremony held at the company premises, the Principal Secretary (PS) for Industry, Juma Mukhwana, announced the leasing plan to Arise Integrated Industrial Platforms (Arise IIP). He described the firm as an international entity with extensive experience in the textile sector across multiple countries.
George Olouka, CEO of Arise IIP, and Dr. Cleophas Lagat, the outgoing Chairman of Rivatex’s board of directors, were present to witness the handover. Mukhwana emphasized that while Rivatex would remain a state asset, all operational responsibilities would be managed by Arise IIP under government oversight.
Approval Through Proper Procedures
Mukhwana highlighted that the leasing process had been approved through all standard procedures, including public participation across various regions of the country. He explained that the partnership is not a takeover or disposal but a strategic lease agreement.
“What is happening is a strategic lease partnership with Arise Integrated Industrial Platforms (IIP) — a globally recognized industrial developer that specializes in building and managing industrial parks, manufacturing hubs, and textile ecosystems across Africa,” he said.
The 21-year lease allows Arise IIP to revitalize, operate, maintain, and manage Rivatex under a performance-based framework. The government will retain ownership of all assets, ensuring continued public control over the company.
Financial Challenges and Workforce Impact
Despite the government investing over Sh7 billion to revive Rivatex, the company faced persistent operational challenges, leading to its collapse. As of the start of this year, the company had approximately 600 workers, with more than half on contract terms that expired last month.
Mukwana revealed that 240 workers were on permanent contracts, and the state had spent Sh94 million to settle their dues before declaring them redundant. He stated that the company was handed over with no debts for workers, and Arise IIP would hire 118 former employees under new terms as a private entity. These workers would not be considered government employees.
Mukwana noted that Rivatex was experiencing heavy losses and accumulating significant debt, making the situation unsustainable. The government intervention was necessary to bring in a strategic partner capable of turning the company around.
Vision for Revitalization
Olouka expressed confidence in Arise IIP’s ability to inject modern technology and essential resources to fully revive Rivatex. He emphasized the potential for job creation and economic value for the country.
“We have the necessary experience and expertise to make the difference in terms of turning around the company,” Olouka said.
Mukwana pointed out that Rivatex had long struggled with operational, management, and financial challenges. He added that the lease arrangement would provide access to modern technology, private sector efficiency, international markets, and fresh capital investment without losing public ownership.
Arise IIP’s Role and Background
Arise IIP is a pan-African developer and operator of world-class integrated industrial zones. It operates in over 14 countries and focuses on promoting local value addition, economic diversification, and sustainable industrialization. To date, the company has created over 50,000 jobs across its platforms.
Its institutional shareholders include the Fund for Export Development in Africa (FEDA), the development impact platform of Afreximbank, Africa Finance Corporation (AFC), Equitane, and Vision Invest. Olouka stated that Arise IIP won the 21-year lease to operate, maintain, and manage Rivatex East Africa SEZ Limited following a competitive bidding process.
