Chinese businesses in Kenya turn challenges into opportunities

On August 28, 2019, a local employee works on the production line in Sunda Kenya Industrial Diaper Factory in Mavoko, Kenya. When the Chinese company Sunda International started business in Kenya 13 years ago, it faced myriad challenges. The lack of skilled labor to fill various positions in the company was one of the major challenges.

Sunda International's finance director for East Africa, Bob Xian, said the company opened its office in 2010 and started selling baby diapers and sanitary pads. In 2016 it moved into local manufacturing. By the year 2019, it had established a factory producing hygiene products like baby diapers, pads and sanitary towels in Kenya's Athi River town.

When we started manufacturing, we decided to use local labor and so far we have over 600 local employees. In most cases, this meant training the local workforce on the skills necessary in their areas of employment, Xian said. We ensure we have the best-trained workforce to deliver quality products and services, because we ended up providing skills and technology transfer to the local people. He spoke at a seminar organized by the Stanbic Bank in Kenya, where the Industrial and Commercial Bank of China participated as a strategic partner in looking at the challenges and opportunities for Chinese businesses in Kenya.

In opening remarks for the seminar, Zhang Yijun, minister counselor at the Chinese Embassy in Kenya, said China believes that numerous opportunities exist for cooperation that will outlast any challenges that come in the way.

He said that the Chinese people have embarked on a new socialist modernization and their belief in shared prosperity makes cooperation with Africa important. Xian said that the spirit of turning challenges into opportunities has made his company flourish in East Africa.

By working with other Chinese companies and the embassy, we get pointers on how to operate in the local environment, what to avoid and how to abide by local regulations. Since 90 percent of our employees are local, cultural and language differences were a challenge in the beginning, but we have been able to identify areas where we can interact and have cultural exchanges with locals, Xian said.

Jeremy Stevens, Stanbic Bank's economist in Beijing, said that Chinese companies can thrive in Africa because they seek to solve local challenges like informal labor and low manufacturing capacity.

He said that with over 60 percent of Africans viewing China as a force in domestic development, there is more room for expansion in trade especially in areas like agriculture and real estate development.

Xian said that Chinese businesses still face some challenges, such as high energy costs in some countries and the current inflation hitting the region is a new challenge, because the local exchange rate to the US dollar makes the importation of materials costly.

Despite recent challenges, sub-Saharan Africa's growth is resilient, said Jibran Qureishi, head of Africa research at Stanbic Bank. He said that the tourism sector, floriculture, and horticulture, which are looking up in the post-pandemic period, will help the region with forex earnings.