Guarded optimism as industrial sector looks to a better 2016

The local manufacturing sector remained vibrant and robust through 2015 despite challenges growing by 4 per cent. The sector was buoyed by support from government, where it signed contracts with different players, and committed to improving infrastructure and access to funding to help increase the industrial production and the country’s exports. The government also pledged to avail stable and affordable power supply and markets, among others. According to Trade and Industry Minister Francois Kanimba, the idea was to boost the country’s export industry and help narrow the ever widening trade deficit gap. Overall, the manufacturing sector performed better than the previous year, contributing over Rwf70 billion to the economy during the third quarter of 2015, up from Rwf65 billion over the same period in 2014. This was, however, just 0.5 per cent of GDP growth during the period, according to data from the National Institute of Statistics of Rwanda (NISR). Figures on the number of jobs created last year in the industrial sector are not available. Cosmetic manufacturers get relief from fakes In the later part of 2015, the government issued a new ministerial order, banning the manufacture and importation of fake and sub-standard cosmetics products which had flooded the local market. According to Article 16 of the new law, “no person shall manufacture, import, store, exhibit, sale or dispense cosmetics unless they meet requirements under this law.” The outlawed products include colorants, preservatives, carcinogenic and mutagenic substances, reproductive toxicants, skin moisturisers, perfumes, lipsticks, fingernail polishes, eye and facial makeup, shampoos, permanent waves, hair colours, toothpastes and deodorants. New players join the sector The sector received new major players increasing confidence levels about the sector’s potential to contribute to export promotion and economic development. For example, Strawtec Rwanda a subsidiary of STRAWTEC building solutions in Germany, commissioned its $10million construction facility in the special economic zone. This greatly boosted the country’s construction industry re-assuring on the delivery of more than 2000 affordable housing units through high-quality pre-fabricated wall panels from wheat and rice stalks. The firm is expected to create more than 2,000 jobs for agronomists and wheat farmers in the country. Hippo roofing boosts the housing sector Similarly, another mega factory specialising in production of stone-coated steel roofing tiles was commissioned in the Kigali Special Economic Zone in Nyandungu, Gasabo District. S&H Industries Rwanda became the first maker of stone-coated steel roofing tiles in the country under the brand name ‘Hippo’. According to the Getenet Motle, the S&H Industries Rwanda chief executive officer, the new factory looks to create over 100 jobs, as well as transfer technology to Rwandans to help boost the sector’s capacity and skills. It is expected to reduce the import bill for stone-coated roofing tiles by 50 per cent. Emmanuel Hategeka, the Permanent Secretary at Trade and Industry Ministry, said at the launch of the facility in October last year that “such alternatives have the capacity to reduce the country’s import bill by at least $450 million by 2018”. Cimerwa unveils state-of-the art plant Earlier, Cimerwa, Rwanda’s sole cement producer, unveiled a $170 million (about Rwf126.7 billion) plant that is expected to increase the firm’s production capacity to 600,000 tonnes a year, up from 100,000. The development is also expected to improve the country’s exports as surplus cement will be exported to neighboring Burundi and the Democratic Republic of Congo, according to Cimerwa. Rwanda starts assembling laptops In what was a big breakthrough for the country’s efforts aimed at increasing access to affordable and quality computers, Positivo BGH, a Latin American multinational that makes laptops, computers, tablets, and other electronic gadgets, launched products onto the local market. The move also boosted the government’s one laptop per child programme, which targets at ensuring that each school-going child gets access to a computer. The development resulted into formation of a new partnership by local entrepreneurs and investors in the ICT sector to help distribute the gadgets across the country. Fortified foods maker, govt sign a joint venture deal Africa Improved Foods signed a joint venture deal with the Government to produce fortified foods in the country. The venture is expected to create 230 jobs along the value chain, besides the thousands of on-farm jobs. It will also provide stable and sustainable market and a source of income for soya farmers in the country, the minister added at the launch of the partnership. The consortium created by Royal DSM (the global Life Sciences and Materials Sciences Company), the Dutch Development Bank, UK’s DFID under the impact acceleration facility managed by CDC Group Plc; and the International Finance Corporation, the investment arm of the World Bank. Regional efforts Local industrialists joined their counterparts in the region to form the East African Community manufacturers’ lobby group. Claudine Mukeshimana, the executive director of the Rwanda Association of Manufacturers, said the group will help promote interests of industrialists in EAC and advocate for improved working environment for the sector to thrive and become more competitive. Meanwhile, the industrialists also agreed to work with East African Business Council (EABC) to strengthen efforts aimed at removing bottlenecks hindering industrialisation in the country and across the region. Gilbert Ndagijimana, the managing director of SOIMEX Plastic, a film extraction and package recycling factory, is confident that such partnerships can help local companies build their brands and become more competitive. The industrialists also committed to implement the EAC industrialisation strategy and policy. Challenges Despite the gains made last year, the sector was haunted by low power supply that hurt production. The industrialists also continued to face stiff competition from regional and global players, making it difficult for them penetrate more markets. This year’s outlook is still mixed as some of the challenges faced last year, like inadequate power supply and turbulent global markets, still persist.

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Guarded optimism as industrial sector looks to a better 2016