Tents are a familiar sight in refugee camps. Every time there is conflict or a natural disaster, one of the things on top of the list for humanitarian organisations is tents used for temporary housing.[hidepost=9][/hidepost]
In East Africa, demand for tents from NGOs has been steady in recent years, following conflict in Somalia, South Sudan, Kenya, Democratic Republic of the Congo (DRC) and northern Uganda. Disasters such as drought and floods have also put millions of people in make-shift camps. In August 2011, the UN Refugee Agency, UNHCR, announced it urgently needed 45,000 tents to house Somali refugees.
Asim Shah, CEO of Nairobi-based tent making company, Tarpo Industries, told How we made it in Africa that the firm’s largest clients in Kenya are NGOs. They use tents for storage, vehicle canopies, temporary classrooms, health centres and accommodation for their staff and refugees.
“When there is conflict, the NGOs have a list of their priorities: water, medicine and then shelter,” explained Shah. “So, yes, the tents business thrives during conflict but we also thrive when development projects are being undertaken, like when NGOs set up temporary clinics to do free health check-ups.”
During the 2011 drought in Somalia, Tarpo had to work round the clock to meet the demand for tents. “There were a lot of refugees coming to Daadab (a refugee camp in northern Kenya). We made between 400 and 500 tents just for that refugee camp and specifically for drought victims. We were working 24 hours for six weeks and our entire supply system was involved to help save the situation,” said Shah.
In Kenya, Shah estimated the procurement of tents to be worth between US$10 million and $15 million annually. In the greater East Africa region, the figures are even higher due to the requirements for shelter in conflict prone areas like the DRC and South Sudan.
Mining exploration companies are also opening up a new market for Tarpo and other tent manufacturers in Africa. Companies exploring minerals are turning to tent makers for temporary housing. Tarpo has supplied to geologists in Liberia, Zambia, Burkina Faso and Nigeria.
With the number of companies prospecting for oil, gas and other minerals in Africa on the rise, Shah is optimistic that this market is set to grow. “They go for geological surveys and can spend up to two weeks on site. We set up accommodation for them. That is a big growing area for the next 10 years because after exploration, actual mining kicks off. We will be in that industry for a while.”
Established 30 years ago, Tarpo is one of the largest tent manufacturers in East Africa and has manufacturing plants in Nairobi, Arusha (Tanzania) and Kampala (Uganda). In Tanzania, 90% of its business is targeted at safaris while in Uganda the majority of sales comes from the military.
Tarpo manufactures a wide range of tents with the cheapest selling at 25,000 Kenyan shillings ($286), while storage tents, which are the most expensive, go for up to four million shillings ($45,887).
Opportunities in the industry are attracting more players. The Tarpo boss noted that competition in the manufacturing of tents for safari and events has grown significantly in the last decade.
“Party tents are probably where the biggest competition is coming from. It has something to do with price elasticity; some people don’t want to pay top dollars for tents. They do not mind quality as long it is affordable. Our tents are expensive because they are of good quality,” added Shah. “Our selling point is quality.”
He noted that there are fewer barriers to entry, compared to other manufacturing businesses. “Anyone can make something like a tent with a sewing machine,” explained Shah. “Some of the materials are readily available in the market.”
But Shah warned that the industry is unique and it takes time before one understands the product and processes involved in tent making. “It is not a product you sell to just anyone,” he added.
Tarpo is looking outside Africa to expand its market. The firm has sold its tents as far as Australia, the Caribbean and Canada.
“I see e-commerce as a big opportunity to increase our export business,” continued Shah. “We have invested a lot in IT to help push the product in markets outside Kenya. We believe we can compete in the global market because we have a [strong] brand name, we have been around for a long time and we are a credible manufacturer.”
According to Shah, Africa is full of opportunities but that does not mean the rest of the world is “dead”. To compete, Africa has to differentiate herself. “We should not assume that there are no opportunities in the rest of the world. We should try to differentiate ourselves. The question should be, how does Africa position itself to utilise the opportunities it has?”