Rwandan manufacturers who relied on imported packaging materials and industrial chemicals from Uganda are now suffering a serious strain on their operations, following an eight-month closure of the border between the two countries.
Take Nshimiyumuremyi Cephas for example. In 2013 he won a Rwf3 million ($3,200) prize in a UNDP-sponsored youth Connekt competition and he formed a company Uburanga, to manufacture beauty products in Musanze district.
He also took a loan in 2014 to boost his business and five years later, his company had gained some stability, selling hair food, shampoo, and body lotions made from natural plants. He supplied clients around the country and a few outside Rwanda.
Today, with no assurance of packaging materials, prospects are gloomy.
“Since the border with Uganda was closed eight months ago, my business has been bleeding. I used to buy most of the packaging materials in Kampala because they were cheaper and it is close enough to keep transport costs reasonable. I have packaging materials worth Rwf8 million($8,630) stuck in Uganda as we speak,” said Mr Nshimiyumuremyi.
“At first we resorted to getting supplies from Tanzania or Kenya but this significantly increased production costs, because they are expensive, attract high taxes and have to be transported from far, making the costs untenable.
“It took a day to get supplies from Uganda, now it takes us a week to get them from Tanzania, in addition to transport costs being high, especially for a small company like ours that buys few materials,” he said.
Mr Nshimiyumuremyi feared that buyers will move to other brands if his products are off the shelves for a long time.
“Wholesalers and my distributors are making inquiries on supplies and I cannot commit to anything if I don’t have packaging materials.
The other tragedy is that, even with the absence of competing products from Uganda like Movit and others because of the closed border, I cannot take a piece of their market share because I am constrained too,” he added.
Mr Nshimiyumuremyi is just one of many small scale manufacturers who are struggling since the border was closed.
Nteziryayo Theogene’s herbal personal care products company located in Kamonyi district, also depends on packaging materials and chemicals from Uganda.
“I used to buy plastic packaging bottles from Uganda to pack mouth wash, toothpaste and other personal care products, but my business is now dying a slow death,’’ he said.
He said since importing the materials from Tanzania and Kenya is untenable for him, he will have to eventually shut down his business.
“I hope our countries normalise their relations, we started these businesses banking on the promise that we are in an East African economic bloc. Now look at where we are, we are trapped,” he lamented.
Large-scale manufacturers and other medium-sized companies can afford to import their packaging materials from China in bulk, which makes it even cheaper in transport costs, but the small businesses are trapped between a rock and a hard place.
Textile dealers who used to buy their products from Uganda have joined forces and got assistance from the government to import from China, however small manufactures were not considered.