Industrialists tipped on EAC market readiness

Enhancing product quality and branding, as well as specialisation are a must if local products are to be competitive on the regional and global markets, Robert Bayigamba, the Rwanda Manufacturers Association president, has said.
A worker at a steel bar making factory. Local producers have been challenged to improve product quality to be competitive in the EAC market.  The New Times / Timothy  Kisambira
A worker at a steel bar making factory. Local producers have been challenged to improve product quality to be competitive in the EAC market. The New Times / Timothy Kisambira

Enhancing product quality and branding, as well as specialisation are a must if local products are to be competitive on the regional and global markets, Robert Bayigamba, the Rwanda Manufacturers Association president, has said.

He said local investors needed to rethink their strategies to make the most of the immense business opportunities presented by the East African Community (EAC) market. The EAC is made up of over 180 million people, presenting a huge market.

“Our challenge now is to work hard and supply it sustainably with competitive products,” Bayigamba told Business Times.

 “We need to come up with new innovations to help us reduce the cost of production, as well as improve the quality of our products and branding and packaging.”

He said, where necessary, investors must hire the right skilled personnel from the region to do the job.  “We have to create unique brands given the size of our country,” Bayigamba said.      

He, however, noted that the high costs of electricity, transport and limited access to finances were still affecting manufacturer’s performance.

“We cannot compete favourably if the cost of production is still high. This is competing from the bottom of the pyramid... It  is not good for the country’s growth.”

According to the Rwanda Prosperity Ecosystem Survey on Business and Investment Climate 2013, power charges in Rwanda are the highest in the region. This has “seriously hindered the country’s small manufacturing firms”, the report indicated.

Rwanda’s installed power generation capacity increased from 45MW in 2006 to 110.4MW today, but manufacturers said this is still inadequate. “That’s why there are still unplanned power cuts,” they argued.

Data from the 2012 industrial survey indicate limited access and cost of finance, coupled with high costs of electricity, as some of the main constraints hindering investments.

According to Chantal Umuraza, the Chamber of Industries director general, these challenges are crippling production and firms’ capacity utilisation, thus increasing production expenses.

She said the situation was making it hard for local industries to produce competitive products.

She noted that it was vital to find sustainable sources of alternative energy to improve access to power and, hence, reduce cost of electricity and production.

Umuraza also called for specialisation on what individual states can do best as the best way members will benefit from the EAC integration.

“We can specialise in agro-processing and the other partner states concentrate on other areas, where they have a competitive advantage,” Umuraza explained.

According to Patel Ritesh, the Utexrwa Textiles chief financial officer, reducing the cost of production and improving quality will help Rwanda compete favourably on regional market and attract more investments. This, he added, would foster the country’s economic growth.

Robert Muhizi, the manager of the manufacturing department at the Rwanda Development Board, said there are incentives in place to help manufacturers make quality products at the lower cost possible.

“We believe this will make them compete favourably in the region,” he said.

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