Moi University sidelined as new investor takes over Rivatex

Moi University has been sidelined as a new investor takes over the struggling textile manufacturer, Rivatex East Africa.

The government on Wednesday claimed that Moi University, previously credited for reviving the defunct Rivatex East Africa, did not invest any money in the company.

During the unveiling of Arise Integrated Industrial Platforms (Arise IIP) as the new investor, the Ministry of Investments, Trade, and Industry said Moi University was not involved in the 2017 revival plan, which cost taxpayers Sh7 billion for the acquisition of modern textile machinery.

At the peak of Moi University’s financial crisis late last year, staff unions alleged that Rivatex was one of the projects that left the university struggling after pumping millions of shillings into the textile firm.

Industry Principal Secretary (PS) Juma Mukhwana said Arise IIP will lease Rivatex for 21 years and share profits with the government in an undisclosed ratio.

“Moi University has not invested any money in Rivatex. Previously, Rivatex was on the verge of being auctioned, and Moi University bought it — that was the end of its involvement,” said Mukhwana.

The PS did not explain why the institution was excluded from the new arrangement despite rescuing the firm from auction.

“All the modern machines worth Sh7.5 billion were installed by the national government. Moi University bought Rivatex, but all the upgrading was done by the government,” Mukhwana added.

Last week, hundreds of workers — including those on permanent, contract, and casual terms — were laid off to pave the way for the new investor.

According to the PS, Rivatex collapsed due to management problems, not a shortage of cotton, as previously claimed.

“There was ready cotton last year, but Rivatex had no money to buy it. The management requested Sh400 million from the government to purchase cotton, sold textiles and apparel, then came back asking for more money,” he said.

Mukhwana noted that Rivatex was overstaffed and heavily dependent on government bailouts for operations and raw materials.

“They requested Sh400 million for cotton, got it, produced and sold clothes, and then asked for more. We decided this cat-and-mouse game had to end,” he said.

“Even if we gave Rivatex 50 years, the government would never get a return.”

The company reportedly owed Sh180 million in unpaid electricity bills and over Sh300 million to suppliers and service providers, according to the Auditor-General’s 2023 report.

Mukhwana added that Rivatex was operating at only 10 percent capacity when it was disbanded last week.

Arise IIP CEO George Olaka said the firm considered Moi University part of the government in the partnership.

“For us, we see Moi University and the government as one,” Olaka said.

He added that the government owns both the land and textile equipment at Rivatex, noting that the partnership with Arise IIP is “not transactional but transformational.”

“We are not in Kenya to make a quick return and leave. We are here for the long term,” he said.

However, Rivatex board chairman Dr. Cleophas Lagat attributed the company’s woes to historical challenges.

“We inherited Rivatex from Moi University, which was running it as a non-profit institution. The main issue was a bloated workforce with little output,” he said.

Olaka said lease payments will help the government offset loans used to acquire modern textile machinery and that the revitalized Rivatex will create 5,000 jobs when fully operational.

He noted that 118 workers from the defunct company will be rehired for institutional memory and that the firm has already provided 1,500 tons of certified cotton seeds to support local farmers.

“Our partnership is part of an African textile renaissance — a continental effort to revive and modernize Africa’s cotton-to-apparel value chain. We are building Africa’s future by adding value to what the continent produces and empowering its people,” Olaka said.