Kenya’s production of sanitary towels, meant to keep girl child in school, is facing headwinds as ‘smuggled,’ cheaper hygiene products from Asia floods the market.
Manufacturers have blamed government for scrapping off the 15 percent import cover, opening up local firms to direct and unfair competition with rivals from China, India and Pakistan.
It has emerged the Asian giants have started shipping in cheap imports thanks to mega state infrastructure deals China has won in the country-It has disrupted the market to the detriment of local companies.
China is funding 90 percent of Kenya’s sh 327 billion standard gauge railways (SGR) and also funded construction of Thika Super highway at a cost of Sh 25 billion.
With very low government interest financing at between 2-4 percent for the projects, Chinese firms are alleged to be routing in cheaper tissues, cotton and sanitary towels bundled with steel and other construction materials.
They (Chinese firms) as a result enjoy low import costs on ‘light’ construction materials and huge export charge reliefs when they illegally ship in hygiene products.
Lack of technical know-how and poor economies of scale have also been blamed for current challenges that are seen to affect school attendance by girl child in the country.
African Cotton Industries(ACI) Director, Khalil Anjarwalla said efforts of local manufacturers to develop customized pads for the market could be largely impacted and affect negatively governments free sanitary towel distribution programme.
“There is total lack of support for manufacturers by the government, local firms in this sector continue to suffer,” said Anjarwalla.
According to Kenya’s Ministry of Education, thousands of Kenyan school girls in grades four through eight miss one and a half school months of class each year due to their menstrual cycles.
The maker of flora and tena branded serviettes, cotton and tissue brands says importation of raw materials from Asia accounts for 50 percent of its production costs.
“Our capital and financing costs slackened over high cost of importing raw materials and low returns…it has rendered us much more uncompetitive,” he told smartinvestor.
The company also sells feminine hygiene products with its flagship brand under the category being maternity sanitary towels, medicott.
It is arguably designed to cushion local market from ‘heavy flow’ -those from other markets have thin layer due to variance on menstrual cycles experienced between local and foreign girls.
Cheap imports have now started taking a toll on ACI’s multi-million sanitary towels ultra manufacturing plant in Nairobi.
The plant’s capacity to produce 200 pads per minute and 1 million packets a month-seen as effective in supporting government’s free distribution of sanitary towels to schools could be undermined with trends showing it is fast losing out on the state distribution tenders to rival Chinese firms.
ACI’s customized pads for African girl child, made the company win more than 50 percent of Sh 300 million government’s tender for two years in a row from 2011 before it started receiving stiff competition from Chinese firms.
However change of guard in government in 2013 saw the value of tender cut down to Sh200 million- it garnered 40 percent of the deal with Chinese importers allocated 60 percent.
“Last year we were bundled out even as tender value was reviewed to Sh 400 million… we are not sure we will win the next tender as government’s support for local manufacturers drops significantly,” argues Anjarwalla.