Dorothy Nakaweesi and Martin Ssebuyira
21 January 2008
Kampala — UGANDA'S cosmetics industry has been hit the hardest by the on going political chaos in Kenya where they have been getting most of the raw materials.
It is unclear whether the industries, majority of which are Small and Medium Enterprises (SMES) operating on loans from banks, will survive the storm as many have started laying off employees and others have completely stopped production.
"We are afraid that if this scenario continues then we will be forced to close production in February," Mr David Chela, the Marketing and Finance manager at Samona Products, in an interview.
"The operation costs have become too costly; we do not have the raw materials and the fuel to run the industry is exorbitantly expensive, that is if it is available."
The pump price of diesel mostly used by industries costs Shs2,500, which is Shs400 more expensive than before the crisis. Petrol used by distribution vehicles is priced at Shs2,700 and at some stations is as high as Shs3,000 up from Shs2,300.
Mr Emmy Musarani, the Movit Company secretary said more than 300 employees have been laid off because the company no longer operates normally.
"We imported raw materials but have been blocked at Mombasa. We are just waiting to see them being released and resume our works," he said.
He said before the crisis erupted late last month, the company used to import 10 containers of petroleum raw materials per week but now this has drastically gone down to almost none.
He said the company will not close down but the business will be too little because there will be little or no production at all.
"We only get plastics and a few other materials from Kenya but most of our raw materials are just imported from other countries through Kenya," he said.
Currently, the company has little stock that they shall continue distributing to their clients and wait for government action.
"We await our government to help us out of the situation," he said.
However, Mr Hilary Obonyo, the executive director of Uganda Manufacturers Association, told Daily Monitor by phone last week that the manufacturers' body is carrying out a study about the impact of the crisis on Uganda's manufacturing sector.
The chaos, which had tribal overtones, started after the disputed elections in the Kenya, which the opposition led by Mr Raila Odinga claims was rigged by the incumbent, Mr Mwai Kibaki.
Uganda, Rwanda, Burundi, Southern Sudan and DR Congo economies have also been adversely affected by the chaos, which is likely to affect their turnover this year.
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