Thursday, 12 July 2012

Rwanda : Rwanda Industries, a monopoly with quality services

Rwanda Industries
Rwanda Industries Limited, is one the manufacturing factories in Rwanda. It is a company which produces two products- plastic line (jerrycans) and retreads (of old and used tires) and in the latter product, the company is a monopoly producer in Rwanda.

The jerrycans are produced from petroleum bi- products raw materials imported from the indenters based in Kenya and Uganda – who act as agents for procuring the raw material from oil producing countries such as those in the Gulf.

For the tire retreading, the raw materials (old tires) are collected from within the local market. The company uses specialized technology and skilled labor to produce these products.

The factory is owned by Nittin Dabholkar, an Indian investor – who is also the company’s Director General. Like many factories, it is located in Gikondo industrial area (commonly known as Cartier Industriel), along the Rwandex-Sonatube road in Kicukiro district in Kigali city.

Started in November 2003 and production commenced in May 2004, but the company initially the company started as a plant for re-trading of tires (remolding) and later on added the jerrycan production section.

“We realized there was a big demand for the jerrycans in Rwanda and chose to include the plastics line in our production,” says Nittin.

Nittin says that though the company is a monopoly in the tire retread business, there is a lot of competition in the jerrycan business because of four reasons: the margin of production, operations (cost of electricity is high) and cost of production is generally is very high especially in the jerrycan section.
“Generally we are not really happy with the plastics line, but with the retreads though we are a monopoly, we provide world standards and treat our clients as king; keeping in mind that any day a new competitor can come in to the market, thus we try to keep the clients close and make sure our clients are satisfied with the quality of our products and services,” Nittin says.
In the retreading section, the company collects old used tires and put new rub on it. This takes about eight hours to make one tire, with an average of 16 tires a day- which cost between Rwf50, 000 to Rwf120, 000.
For the jerrycan production, the company uses a three shift per day and is able to produce about 900 jerrycans a day. The jerricans are produces from petroleum bi-products-called high density polyethylene granules- which are petroleum based. These are powered into the hop on a blow mould machine- and one jerrican is produced within 9 minutes.

Each jerrycan Rwf1700 inclusive of VAT- these are not sold to individual retailers, but are supplied to other company’s who are end users- such companies include: packing industries (paint and paraffin, fuel companies) on wholesale basis.

The best aspect about this company is that it employs workers without any basis of prior skills, and trains the staff- which takes a period as long as two weeks, depending on the fast learning skills of one.
The company has at least 19 permanent workers who are recruited and trained with skills to operate the machines and also employs seasonal casual laborers who are hired depending on the workloads.  The same production staff is used in both sections of the production chain.
“The qualifications is one must be are one is jobless and energetic and has basic notions of following up with working schedule.

The future of the company, according to Nittin, depends on the incentives provided by the government, especially in terms of taxation because “any manufacturing unit in the country is getting burdened by high taxation and high costs of inputs. The units cannot survive if it is has to import its raw materials and at the same time compete in the regional market because other countries have access to the raw materials and bigger advantages and don’t have to pay for transportation of raw material”
Nittin says that government must find incentives on costs of importation. For example in order to transport a container of raw materials he has to pay 6000US dollars, while the re-trader in Kenya only pays 200 US dollars, which means he incurs a minus of  6000 US dollars for every container imported and in a year he earns a little higher than that.

He also advises that the government should focus a lot on education input on technical skills because there is lack of skilled labor in Rwanda, which makes it hard to employ local residents since most graduates have only theoretical skills.

Rwanda Industries will also be one of the companies to shift from the current industrial area- and he says that the shifting should ensure that the necessary infrastructure. However, despite the challenges of producing at high cost and facing a competitive regional market, Nittin says that Rwanda still stands out as a better place to do business because of the good and effective policies by governments which have created a peaceful and secure business environment in Rwanda unlike other countries.
As a token of appreciation to the Rwandan government, which Rwanda Industries credits for having Industry friendly policies, the company aims to venture into many more developmental activities as well as add to the products they produce.

And as Rwanda as a country experiences a wave of industrialization, Rwanda Industries has a pioneer position in the industrial market as well as job creation. One of the few companies that provide skills to Rwandans through experience while they don’t consider skills or experience when choosing employees.
As they work on, Rwanda Industries dreams go beyond earning money, to developing the country that has equipped them with the chance to thrive. Meanwhile, Rwanda Industries products are becoming famous in Rwanda and East Africa though the company still yearns to extend their services as far as they can. Rwanda Industries intends to venture in additional plastic production in the near future.
Should be noted that the government of Rwanda initiated means to favour industrialization, as a way to develop entrepreneurship and help Rwanda grow past the 1994 genocide destruction.


Unknown said...

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