3 November 2012

East Africa: Chloride Exide Battery Maker Sends Home 34 Employees

CHLORIDE Oxide maker Auto Battery Manufacturer on Thursday sent home 34 employees due to a surge in illegal export of scrap batteries.

The company's CEO Guy Jack warned that the company risks closing shop if the illegal exportation of the raw material continues.

"Our production capacity has gone down by almost 60 per cent in the recent days leaving us with no option but to look into ways of cutting costs," Jack said.

Jack said the continued illegal export of scrap batteries and materials as well as the duty free importation of automotive batteries have significantly affected the industry.

This and and solar tariffs has significantly impacted on the company's sales and manufacturing operations.

Jack said retrenchment of workers will continue until the market stabilises.

He warned that the government will lose up to Sh300 million in revenue paid as taxes if the company closes shop.

"We are calling on the government to intervene by introducing strict measures stopping any exportation of scrap batteries and other forms of scrap metals," Jack said.

The company pleaded with the government to restrict trade in battery scrap, scrap lead and lead in accordance with the East Africa Community rules which are currently not being enforced by the government.

Jack questioned the rationale behind the government's decision to allow the trade to continue in total disregard of the existing law.

The EAC council of ministers has stopped export of used automobile batteries, lead scrap, and crude and refined lead, and all other forms of scrap metals.

The move was meant to seal loopholes that have seen traders export scrap metal to countries like China, draining the five EAC economies of much needed raw materials in metal-related industries.

"We ask the government to apply the rule to the letter and stop further exportation of these raw materials to save the industry and the welfare of workers," Jack said.

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