Packaging woes continue to haunt export sector

Oneof the top priorities in this financial year’s budget was to support initiatives that would increase Rwanda’s export volume and value to reduce the country’s trade deficit. The government has, for instance, signed deals with private sector players, especially export-oriented firms, which are aimed at building their capacity as well as easing the cost of doing business. However, some challenges still abound that could make these initiatives less effective. Manufacturers have for instance, decried the lack of appropriate packaging materials for the various products, saying it is making local goods less competitive on local, regional and other markets. The industrialists say the the issue needs urgent solutions, like supporting companies that make packaging materials, to boost the local export industry. Kofi Essuman, a consultant on packaging at the International Trade Centre (ITC) in Geneva, Switzerland, says there is need to invest in research and innovative technologies to address the challenge. “This should, however, go hand-in-hand with conducive legal and regulatory measures to attract more businesspeople to invest in the making of packaging materials,” Essuman said while speaking during a breakfast meeting with manufacturers in Kigali last week. The meeting, organised by the Ministry of Trade and Industry and International Trade Centre, attracted top managers and small-and-medium enterprises (SMEs) from the manufacturing sector. Essuman argued that proper packaging enahnces product quality and, thus the competitiveness of the manufacturing sector. “It is important to provide technical assistance and advisory services to the SMEs so that they improve quality and packaging to benefit from the growing market demand,” said Essuman. He noted that one cannot talk about competing on global scale if their products are poorly packaged. Ramin Granfar, the International Trade Centre chief in Rwanda, was confident that addressing the needs of the private sector, including strengthening their capacities to production processes and packaging could turn around the export sector. “You also need to put in place supply chain management systems that will help producers access equipment and finance if the sector is to be sustainable and profitable,” Granfar said. More challenges Wilhelmine Bora, who represented SMEs, called on the government to establish a one-stop centre, where industrialists can easily access the requirements of different markets, including packaging. “Most often, we don’t know requirements and standards that would enable us penetrate various global markets. That puts our products at risk of being rejected,” she said. The industry is also financially constrained which makes it difficult to acquire the right technology for value-addition, Bora added. “poor packaging, coupled with limited production capacity, as well as lack of skills and high cost of product certification have all contributed to local products becoming less competitiveness.” Bora said poorly packaged goods can never attractive customers. Recently, the Rwanda Development Board (RDB) representative in Canada, Emmanuel Muhawenimana, revealed that local manufacturers were finding it had to penetrate the Canadian market because of poor packaging. New law on packaging material in offing François Kanimba, the Minister for Trade and Industry, said the government is working with International Trade Centre to establish a packaging facility in the country. “We are also working on a new law on plastic bags. Once it is passed, it will ease the challenge of packaging woes facing manufacturers,” he said. Kanimba said the law will allow a certain biodegradable plastic materials for packaging. The minister did not reveal the details of the new law. However, Gerald Mukubu, the Private Sector Federation acting chief executive officer, said the law is waiting for the prime Minister’s order before it is debated by the Cabinet. “The new law is based on the study we conducted on packaging materials, which revealed that high cost of packaging was affecting profitability of the manufacturing sector,” Mukubu said. “We have discussed and agreed with the government to allow at least oxo-biodegradable plastic materials and other alternatives to address the challenge, Mukubu added. Non-biodegradable plastic bags were outlawed in 2008, leaving a vacuum in the packaging sector. Despite the ban, a handful of firms, mainly the cottage industries, are making paper bags. The country’s trade performance still lags behind when compared to second Economic Development and Poverty Reduction Strategy (EDPRS II) targets. Rwanda targets to increase exports by 28 per cent per year by 2018 under EDPRS II. RSB weighs in According to Mark Cyibahiro Bagabe, the Rwanda Standards Board director general, SMEs need to focus on improving their processes and products to meet technical regulations to be certified by RSB. “This will help local producers penetrate more markets and boost the country’s export sector,” he said. Bagabe added that local firms need to ensure that products are packaged in accordance to standards. Products are only accepted in markets if they meet standards to promote fair trade practices. Therefore, industrialists should meet all the technical regulations to avoid their products being in some markets. “It is not true that information is lacking... we have a desk that handles export trade issues at RSB, but exporters are not utilising it,” Bagabe said.

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Packaging woes continue to haunt export sector