January 2012- Business

EPZ Incubator facilities 

set to host more enterprises

A pioneering project designed to accel­erate growth of operational SME exporters has been initiated in Athi River.The export business incubator is unique in that it aims at accelerating growth of operational SME exporters desiring to set up under the EPZ program and hence its name- Export Business Accel­erator (EBA).

The pilot phase of the EBA program is located at Athi River EPZ and is ex­pected to be further replicated in 10 Counties before rolling it out in  Kenya’s 47 counties.

Phase 1 of the Incubator facility already houses pioneer SMEs while Phase 2 is available for lease with plans underway for the construction of Phase 3.

Benefits for SME exporters under EBA include EPZ tax incentives and investor facilitation, a Purpose built in­fra­struc­ture located at the Athi River EPZ, provision of Business De­vel­opment Services (BDS) and  business networking oppor­tu­nities available under this pro­gram.  

As the EPZ program prepares to trans­form into Special Economic Zones (SEZ), the new program is expected to customize the incubation program to meet the needs of more Kenyan SMEs.

According to EPZE Chief Executive Dr. Richard Mutule Kilonzo, the SEZ pro­gram will see the development of SME Parks as part of the widened framework expected under SEZ

Kenya inaugurated her Export Pro­cessing Zones (EPZ) program in 1990 as part of the Export De­vel­opment Program being un­der­taken by the Gov­ernment to transform the economy from import substitution to a path of export led growth.

EPZs are designed to further in­te­grate Kenya into the global supply chain and attract export-oriented in­vestments in the zones, thus achieving its economic ob­jectives of job creation, di­ver­si­fi­cation and expansion of ex­ports, increase in productive in­vestments, technology transfer and creation of backward linkages be­tween the zones and the domestic economy.

The program has contributed sig­nifi­cantly to achieving these ob­jectives with over 40 zones in place, close to 40,000 workers em­ployed and contribution of 10.7 % of national exports. Over 70% of EPZ output is exported to the USA under AGOA.

Since the commencement of the pro­gram, mostly large enterprises have benefitted from the program with minimum participation of small and medium enterprises (SMEs) that have a majority local shareholding.

In order to establish why there has been low participation of Kenyan SME exporters in the EPZ program, the Export Processing Zones Au­thority conducted a feasibility study through technical assistance by The Common­wealth Secretariat in 2003/4.

Among the key constraints identified by SME exporters wishing to set up shop under the EPZ program in­cluded; lack of export market information, lack of suitable business premises and high rental costs among others.

The study recommended es­tab­lishment of a facilitation pro­gram for SME exporters desiring to operate under the EPZ program-the export business incubator pro­gram- resulting in the pilot project initiated in EPZ Athi River.