More firms close shop as impact of coronavirus take toll on sales

Monday June 8 2020

sales

Manufacturing sector grew by 11 per cent in 2019, but this is expected to fall to 7.9 per cent this year. Photo | Cyril Ndegeya  

MOSES K. GAHIGI
By MOSES K. GAHIGI
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Some manufacturers have closed their operations while others are on final stages of complete shutdown as Covid-19 impact weighs down on "made in Rwanda" campaign.

Two years ago, Niyidukunda Euphrosine started her manufacturing company, Avocare Ltd, extracting cooking oil out of avocados. Products gained traction in the market, employing six people and enjoyed a steady growth in sales.

She says 80 per cent of her customers were expatriates working in the country, who took cooking oil back to their countries.

However, suspension of international flights grounde her business. The lockdown also stopped movement of her products from Southern province to Kigali.

Her company also supplied hotels, but since many were closed for a long time, while the few, which remained open, had no revenues, she lost that market too.

“I haven’t fully closed the company, but it’s as if we closed in a way, we have suspended our operations, we tried but surviving three months without working was very hard”

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“Our working capital dwindled, I need a capital injection to even invest in e-commerce because I have learned that it can add value to my business if we get a second chance” said Niyidukunda she said.

Just like many other manufacturers, Niyidukunda’s business ran out of packaging materials because many came from Kenya, Uganda and Tanzania.

Although the pandemic caused major setbacks, Rwandan manufacturers problems predate Covid-19.

2019 itself was a tough year for many small and medium manufacturers, as many who depended on cheaper packaging materials and industrial chemical imports suffered a strain as a result of the Uganda-Rwanda border closure.

Some that locally made products like hair food, shampoo, and body lotions from natural plants faced the brunt of the border closure.

They tried getting supplies from Tanzania and Kenya but this significantly increased production costs, because they were expensive, high transport costs and also attracted high taxes, which made the costs untenable.

Logistical complications

With time some manufacturers gave up on Ugandan packaging materials, and braved the costs of getting them from Kenya and Tanzania, through suppliers who imported in bulk, but this was also to be affected by the Covid19 pandemic related logistical complications.

Marie Ange Mukagahima’s company makes oil, cookies and flour from pumpkins, and sales to supermarkets, although they tried to continue production even during the lockdown since supermarkets were operational, they could not supply them because they lacked the appropriate packaging materials.

“We exhausted all our packaging materials, and supermarkets are very particular about which packages we are using, we couldn’t continue,” she said.

Other manufacturers like Carl Group, the makers of Vita bread, made from sweet potatoes, say the whole value chain is affected.

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