Factory Growth in Africa Includes RFID Facility in Nairobi

By Claire Swedberg

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  • NexGen Packaging has opened its African headquarters to provide packaging and labels, including RFID tags to garment and footwear manufacturers.
  • The Nairobi facility will serve companies throughout the continent and employ 100 to 125 people.

NexGen Packaging has opened a facility in Nairobi, Kenya, to bring its label and packaging operations closer to a growing customer base in Africa.

The facility will serve to fill a void in local label production and provide products for the increasing number of manufacturing sites in Africa, said company CEO Jim Welch. Among its offerings are RFID labels that manufacturers of apparel, footwear and consumer products are applying to goods made in Kenya, Egypt and other countries in the region.

NexGen held its April grand opening—of the new 50,000 square-foot facility located in the Export Processing Zone in Athi River, Nairobi—attended by Kenya president William Ruto as well as U.S. Ambassador to Kenya, Meg Whitman.

Manufacturing of goods, including textiles, is on the upswing in Africa, and especially in Nairobi, where Welch said many of NexGen’s African customers are using UHF RFID in their packaging or labelling. “We think because of the African demographics, that it’s going to be one of the premier garment and footwear manufacturing locations globally.”

Providing a Local Source to Meet African Demand

The primary suppliers of label and packaging products for Africa are in Asia or the Middle East. Welch points out that recent supply chain challenges, including the problems related to Red Sea passage, add to shipping times.

“If somebody’s manufacturing a garment in Nairobi for example, or Cairo, and they’ve got to wait for that packaging to come from China. it could add 30 days to the to the production time,” Welch pointed out. “So local RFID printing and encoding capabilities are very important in Africa.”

By operating a full-service facility out of Nairobi, NexGen intends to fulfill label and packaging orders within days for those on the continent. That may be increasingly of value as more garment manufacturing moves to Africa, and more garments require RFID tags.

“That’s why we are moving so quickly and investing strongly in Nairobi to set up our African hub,” Welch said.

RFID Printing, Packaging and Distribution Services

The new facility offers full-service trim and packaging, with the ability to provide RFID printing and encoding of price tickets, care labels and hang tags. Additionally, the company offers distribution capability to help supply woven labels and patches that can be sewn into products such as garments.

While the site is now taking orders, and products are in early production, by the second half of the year it will be operating at full capacity. Already, NexGen has about 10 major customers that indicate they need local support for labels.

NexGen has a presence in Ethiopia and intends to continue servicing its Ethiopia clients from there, while the Nairobi site will act as the company’s African headquarters for production.

“Nairobi offers a very diverse and talented workforce…we’ve been very impressed with the employees we have added to our team,” Welch said, while he added that the Kenyan government has helped provide a good business climate.

To serve its global customers, the European-based Nexgen operates facilities in Hong Kong, China, Vietnam, Indonesia, India, Bangladesh, and Latin America. Its goal is to be closer to garment manufacturers.  For Africa specifically, Welch said that supporting Kenya, Egypt, West Africa, and other areas can be better done from Nairobi than out of Hong Kong or China.

Projections for Growth in Textile Production

Within the next year, NexGen anticipates that it will be employing 100 staffers to support customers across Africa. Its phase two plan is to increase capacity and capabilities in Nairobi as well as to provide incremental production throughout other areas in Africa, including Egypt and West Africa.

While increasing its production capacity, the distribution side of the business will also further offer access to third party RFID woven labels and other specialty products that can be acquired and stored at the Nairobi site to ensure labels are available for manufacturers when they are needed. NexGen can also embed RFID in woven edge tape.

“RFID is no longer a niche product limited to larger retailers,” said Welch. In the coming months and years he predicted, “we see it as a requirement across all retailers and brands regardless of size.”

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