The packaging dilemma

Lack of locally produced packaging materials continues to affect local traders, especially exporters, as they struggle to import the expensive materials, before re-exporting finished products.The cost of imported packaging materials means an increase in the cost of production, and this affects the price of the finished goods, putting them at a competitive disadvantage on the international market.Traders say that in banning the use of plastic bags by the government eight years ago, there was no sustainable alternative devised, and while local traders cannot dare pack their products in plastic bags, some products produced from regional countries still find their way to the shelves of various grocery stores in Kigali.Vianney Kabera, the Director of Fresh Pack Exports that exports fresh produce to Europe, said unless the government intervenes to find a lasting solution, traders will continue losing out on the market.“If you import packaging materials, there is no way you can compete with others on the international market, and this is a serious problem that the government should look into,” he said.He said in a month he spends $10,000 importing packaging material like boxes from the region, and this, he added eats into his business.“The materials are expensive, but I have nothing to do because I have to remain in the business,” he said. For other countries, packaging materials are locally made, like in Kenya and Uganda, and this favours the local traders because products reach the market at a cheaper price.A document seen by The New Times from the Private Sector Federation indicates that Inyange Industries, which is the country’s largest food processing company, is facing packaging challenges.“Following the ban of plastics, the industry is using mostly Tetra Pack cartons and HDPE Gallons for packaging. The materials are four times more expensive than LLDPE polythene packaging which is used in other EAC countries,” the document reads in part.SULFO Rwanda, a local company that produces a variety of home use products, currently uses paper cartons as alternative for packaging its goods and it’s three times more costly than polythene.Benjamin Safari, an exporter, said the banning of the polythene bags was good for the environment but bad for the local industy.“Other products made in polythene, like clothes, are imported into the country, but our factories here cannot be allowed to wrap those clothes and export to other countries...this is a serious problem for us,” he said.He said some packaging materials need permission from the Rwanda Environment Management Authority. Alphonse Nyaruhirira, who exports cassava flour to Europe, observed that the issue of packaging will continue to hamper economic growth.“If the government does not intervene to seek an alternative, we shall continue to be challenged on the market, not because our products are bad, but because they are expensive,” he noted.Nyaruhirira imports packaging materials for his products from France and Uganda.Traders assert that though the government has tried to facilitate businesses, the issue of importing packaging materials was a serious concern.When contacted, Trade and Industry Minister, Francois Kanimba acknowledged the problem, saying it mostly affects small and medium enterprises. He, however, said investors have not shown interest in exploiting the market potential by locally producing the materials.“We know it’s an issue and the importation of packaging materials is costly to the SMEs; however investors should seize this opportunity; unfortunately we have not received anyone venturing into this,” he said.Kanimba added that the ministry had plans to set up a plant to manufacture packaging materials, “unfortunately, government has no money to build it.”The PSF document says total ban of polythene bags is not the best option. “Practices tried by other countries should also be tried in Rwanda; for-example, imposing tax levy on carrying plastic bags whereby users have to pay a certain fee,” reads the document.It adds that the exercise has proven effective in some countries like Ireland, where following the imposition of such taxes, use of plastic bags dropped to 95 per cent and users prefer to use reusable long-life bags.REMA has always warned against the use of polythene bags in the country.“We are now changing the strategy; we want to put in place internal inspectors to impound the bags and arrest dealers,” said Remy Norbert Duhuze, an official from REMA recently told The New Times.PenaltiesAccording to the law, business which manufacture polythene bags, commercial companies or any person found in possession of prohibited polythene bags without authorisation in their stores, manufacturing or using them, shall be punished by an imprisonment of six (6) months to twelve (12) months and a fine of one hundred thousand (Rwf100.000) to five hundred thousand (Rwf500.000) or one of the two penalties.Any unauthorised person who sells polythene bags shall be punished by a fine ranging from ten thousand (Rwf 10.000) to three hundred thousand (Rwf 300.000).

National

The packaging dilemma