Recent ban on plastic bags in Kenya and high cost of raw materials have occasioned shortage of packaging materials on the Rwandan market.
The shortage of paper bags has forced consumers to pay more for goods with local manufacturers of packaging materials saying suppliers are now concentrating on the Kenyan market to meet demand.
Mafuco, a paper package manufacturer in Kenya, which was the main exporter of paper bags to Rwanda has now shifted focus to the domestic market, leading to shortage gaps in Rwanda.
Janvier Ndayirata, chief executive of Real Packaging Industry — a local company based in Eastern Province — said there has been an increase in demand from Kenyan buyers since the the government outlawed polythene bags.
“Sometimes I received more than 20 calls daily from Kenyan buyers,” Mr Ndayirata said.
He added that some companies are not taking orders from local clients as Kenyan buyers come with higher offers and are buying in large quantity at higher prices.
According to Mr Ndayirata, before the Kenyan ban, paper bags were sold at Rwf42,000 per bundle of 30 kilogrammes, but now it is retailing at about Rwf46,000.
Another factor cited by manufacturers as a contributor to the shortage was Mafuco — a Kenyan packaging company, which is the main exporter to local market that reduced its volume sales to supply Kenyan market as the demand for environment friendly bags skyrocketed.
“If Mafuco was sending 20 trucks to Rwanda and now it is only exporting five, it means there is a gap,” said a representative from a local manufacturing company that makes paper bags in addition to other products, on condition of anonymity because he is not authorised to speak to journalists on behalf of the company.
Costly raw materials
Data from the Rwanda Development Board (RDB), show that small bag clients purchased $3.2 million worth of bags in 2012, with 90 per cent of the supply coming from Kenya.
Despite the successful plastic ban that started 12 years ago in Rwanda, it appears packaging industry, specifically paper bags-making industry is not attracting enough investments to supply the local market.
Mr Ndayirata who imports raw materials from Germany and Russia said the cost of raw materials used to make paper bags has also been increased as their European suppliers now want to supply those who buy in lager quantity.
“They increased $250 per tonne, yet they want those who buy in larger volumes at least valued at around $300,000,” he said in an interview. The current factory capacity is three tonnes per day, but it targets 20 tonnes per day. However, the businessman said financial capacity for many investors in the sector is still low, creating room for imports.
Small size paper bags used to pack small quantity of food commodities are in high demand but some manufacturers say the cost of production is higher.
Coletta Ruhamya, director at Rwanda Environment Management Authority was quoted earlier as saying “The private sector needs to venture into this as an opportunity for investment. Other countries are seeking to emulate our decision.”
Data from RDB released in 2012, show the size of Rwandan market is estimated at 950,000 bags per month.