FEATURED: How Kinazi Cassava Plant recovered from Rwf600m loss

In November 2019, Kinazi Cassava Plant underwent an overhaul following years of challenges that had plunged the plant into a Rwf600m loss that threatened its continued operation. Besides challenges in management, the plant had been grappling with machinery issues for years that resulted in a decline in production and a colossal financial loss early in 2019. To recover, Kinazi Cassava Plant underwent major changes starting with the appointment of new board of directors in November 2019 and a new Chief Executive Officer, Christian Mbabazi. The new leadership started by designing a new strategy, with a completely new way of dealing with suppliers and clients for better and productive relationships. In an interview with The New Times, Mbabazi said that he can describe the current status of Kinazi Cassava Plant as “stable and going forward”. “Seven months after the changes were instituted, I can now assure clients and suppliers that the plant is stable and going forward. The last few months have been productive,” he said. He also revealed that in the first quarter, immediately after the changes in January to March, net profit of the plant increased 150 percent and the growth revenue has reached 61 percent. The growth in the last 6 months allowed the Ruhango-based plant to pay its suppliers to a tune of Rwf400 million. The plant had managed to pay up non-performing loans in commercial banks and changed to performing loans. Good changes on the market After the changes, Mbabazi says customers should expect cassava flour with higher consistent quality. “Our flour has always been of good quality but the plant failed on consistence. We are now working on consistency part,” he said. Early in 2019, 1 kilogramme of Kinazi flour cost Rwf300 but after the changes, it was increased to Rwf750. The price was increased for the plant to survive and recover, he said, noting that after the recovery, the price might be reduced. He added that the plant plans to increase production and satisfy local markets and satisfy abroad markets. Currently, 40 percent of the production is exported. The goal is to have a 50/50 split between the local market and export in bigger quantities. As one of the biggest recovery changes, the plant is expecting a general audit that will determine more changes and areas to inject more investment. The audit is expected to be conducted late this year. The plant will revise the production chain and ease access to its products. Following the overhaul in management late last year, the plant sunk over Rwf100 million in procurement of machinery and the investment was made by the two shareholders: Development Bank of Rwanda and Agaciro Development Fund which own 44 per cent and 56 per cent respectively. Mbabazi said that both shareholders have promised to make more investment after the general audit slated for late this year, which will determine the total amount of investment required to deliver the expected output

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FEATURED: How Kinazi Cassava Plant recovered from Rwf600m loss