Entrepreneurs enticed into manufacturing and distribution of personal protective equipment in the fight against coronavirus are counting losses more than a year and a half later with piles of unsold stock going waste.
Aki Garments, one of over 100 firms licensed by the Rwanda Food and Drugs Authority (FDA) to produce face masks quit the business in October last year after seven months into production.
The company had produced 200,000 facemasks, and still has a big stock of them unsold despite efforts to sell on discount, donate or exporting to external markets such as eastern Democratic Republic of Congo.
“In the short-term, we made losses because not even 20 per cent of our investment was returned. We approached the opportunity with promises and excitement but the reality was different. The machines that we bought, however, are still useful in producing other garments,” said Marc Gwamaka, chief executive of Aki garments.
Mr Gwamaka said they quit and shifted to making sportswear instead. The company today can only make facemasks on order mostly from big institutions.
Dikam Fashion Wear, which was also licensed by the FDA to manufacture personal protective kits, has also quit making facemasks and resorted to their initial business of making clothes.
Although they did not invest heavily in producing facemasks, they still have unsold stocks that are almost a year old. The two firms’ plight is no different for countless other companies that rushed to invest in machinery and make upgrades to meet FDA standards with heavy investments on the promise of business opportunity as the market grappled with challenges sourcing the materials abroad. However, as the first and longest Covid-19 lockdown was lifted in June 2020, the face mask production market was flooded with low priced PPEs from informal producers that licensed manufacturers found it difficult to make return on their investment.
Swaibu Munyawera who heads Mask Investment Ltd, a joint venture created by the manufacturers to run a central stock and make sales say they are still stuck with over 1.2 million unsold facemasks out of the initial combined production of 2.7 million.
“There is no more production. The market got distorted, and with that stock we could not invest more. It now up to individual companies to find ways to sell their stock,” he said.