Rwanda is looking for investors to rescue eight large but struggling, debt-ridden factories it sold off that could be forced to shut down and send home over 1,000 employees.
The Ministry of Trade and Industry said it was in negotiations with investors to acquire stakes in Rubirizi dairy, Utexrwa, Sopar, Rabi, Sotiru, New Rucep, Sonafruits and Ikirezi.
“We are optimistic that the investors will come because of the business reforms that Rwanda has achieved,” said John Nkubana programme manager responsible industrial development in the Ministry of Trade.
With some factories in manufacturing, agro-processing and agriculture closing, massive debts have forced many of them to produce below capacity with little or no export at all.
Mr Nkubana said that although the companies are affected by heavy debts, they can be turned around.
“We are already negotiating with Unga, one of the biggest players in animal feeds processing,” Nkubana said.
Although the struggling industries have suffered massive debts, poor management and other challenges, local investors have already shown interest in taking over while foreign entrepreneurs are still being courted.
“Huge debts would not scare us away if we wanted to invest in these businesses since we plan to approach the struggling factories and convert their debts into equity or provide patient capital for their stabilisation before a takeover,” Business Partners International Rwanda Ltd chief investment officer Eric Rutabana said.
Rubirizi Dairy, one of the country’s largest milk processors, and Utexrwa, the only large scale textile mill in Rwanda, are among the firms up for grabs.
The estimated demand for Kigali’s market for pasteurised milk products is 680,000 litres per day with sales estimates of 83,000 litres daily and the investment required is Rwf250 million in new commercial loans as well as Rwf150 million in new equity.
Utexrwa requires new equity investment of Rwf592 million and Rwf600 million in debts with preferential terms.
Since 2010, the government has validated 13 large industries in partnership with Karisimbi Business Partners.
Eight of these firms are being helped by government to get partners to stay in business.
Karisimbi identified four businesses out of eight which need urgent support that have a possibility to make a turnaround if they got the right stakeholders.