B u y K e n y a B u i l d K e n y a :Furniture and Furnishings Industry

Ngong RoadJua Kali Market

The Government of Kenya in its Integrated National Export Development and Promotional Strategy under the manufacturing sector has singled out the furniture, textile, leather, pharmaceutical, light engineering, automotive and agro processing industries among other sub sectors as the key drivers of industrial transformation because of their envisaged role in employment creation and economic growth.

The strategy document presupposes that an export oriented approach will lead to rapid economic growth, boosting emergence of a modern manufacturing sector, providing employment, and reducing poverty based on similar experience by Taiwan and South Korea in the 1960’s and 1970’s, Malaysia, Thailand and Singapore in the 1970’s, China in the 1980’s, and eventually India in the 1990’s.

Introduction

Furniture and Furnishing subsector value chain

TreeForestry

TimberIndustry

Leather

Textile and Metal Accesories

Packaging and Branding

Market and DistributionPlastic

Projected Furniture and Furnishing Domestic Market Size

2019

$878m

2018

$799m2017

$726m

2016

$660m2015

$600m

Domestic Market Share Distribution

Improrted Furniture

13% 87%

Localy MadeFurniture

Furniture and Furnishing Sub Sector Challenges

01 Limited and unreliable supply of inputs limiting industry growth and increases reliance on imports;

02 Insu�cient investment in technology, design, skills, and supply chain resultsin limited availability of industry-speci�c skills and low levels of productivity

03 Limited market for Jua Kali (Informal producers) in formal retail outlets who prefer to import

04 Limited sub contracting and collaboration with by Formal retail outlets

05 Lack of o�cial representation through sub sector association

Furniture and Furnishing Case StudyFocus on Jua Kali artisans at Ngong Road-Nairobi

Independent CarpenterAbout the FounderPaul Munyao is a carpenter hailing from Makueni County. After completion of his primary education, he pursued a technical course in carpentry while in Makueni before moving to Nairobi to practice the trade.Paul’s interest in Carpentry was sparked by the need to earn income to assist his poor family and the abundant availability of trees.

Business Process

CUSTOMER ORDER

- Customer places order- Customer raises deposit

01 SOURCE OF RAW MATERIALS02- Munyao sources for Raw Materials from timber wholesalers at Ngong Road or Gikomba market depnding with volumes needed

MANUFACTURE03- Munyao hires a workspace at a fee and manufactures the furniture

DELIVERY & FINAL PAYMENT04- Munyao delivers �nsished product to customer as he collects �nal payment- Average daily revenue is Kes 2,500

Challenges Successes

1. Lack of capital 2. Access to market challenges due high competition along Ngong road3. Workshop space challenge4. Lack of association to represent them to county and national discourse

1. Operated his business for over 21 years hence sustained his family2. License leniency by County Government of Nairobi

Competitive Advantage

1. Competitive pricing

2. Customization of order

3. Skilled labor

Challenges Successes

1. Low pro�t margin 2. Defaulting or late payment by clients3. High and �uctuating input cost (Raw Materials)4. Workspace challenges (Lack of display area due to ongoing construction of Ngong Road)5. High electricity cost

1. Business has sustained his family2. Won and successfully delivered an

order to Springwood Montessori inNgong Road.

Unique Handcraft FurnitureAbout the FounderPeter Kyuli specializes in metallic furniture a skill he learnt from a metal work certificate course he took at Don Bosco. He gained experience afterwards via casual work but decided to start his own workshop along Ngong road in 2014.

White Nile Furniture ShopAbout the FounderJames has operated this furniture shop since 2007. As he was pursuing a diploma in Business Administration he stared doing casual jobs in order to make income for sustenance. James got a carpentry contract as an apprentice at Kakuma refugee camp and later in Somalia where he perfected his trade as well as other skills such as sales and marketing.Unfortunately James never �nished his diploma in business administration but still applies the knowledge he learnt both in and out of school to his business.

Business Process

CUSTOMER ORDER

- Customer customised furniture- Customer raises deposit

01

SOURCE OF RAW MATERIALS02- Hard Wood-Export suppliers- Softwood-Sourced locally from Kapsabet and Eldoret

MANUFACTURE & DELIVERY03- Manufacture- Delivery and Final payment

Challenges

1. Competition due to large number of furniture shops along Ngong road. 2. Lack of appreciation of wood quality by clients3. Show room space challenges4. High input cost5. Defaulting and late payment by customers6. Little to no business di�erentiation

RecommendationsThe furniture and furnishing sub sector has an enormous potential for job creation as well as contribute to economic growth. Based on the challenges faced by players in the sector the following are possible recommendations:

1. Establishment of sub sector association that would enable structured engagement with government and other stakeholders2. Establishment of collaboration framework between Jua Kali sector players and formal retail shops that rely entirely on imported furniture3. Procurement opportunity for Jua Kali players in the furniture and �tting in the big four agenda under a�ordable housing 4. Establishment of safe and a�ordable work and showroom space for the sub sector players located at Jogoo and Ngong road