This archive report was first published on 17 May 2020.
On September 2019, Milly Glass Works Ltd in Mombasa embarked on a three-month upgrade of its furnace, marking the end of nine years of uninterrupted operations. The plant, which used to manufacture 100 tonnes of glass per day, had closed shop to upgrade and look into the future in line with President Uhuru Kenyatta’s Big Four Agenda.
According to Mohammed Rashid, the Chief Executive Officer, the upgrade was necessary to increase production and target the Africa Free Trade Area, which becomes operational from June this year. The company aims to capitalize on the new market and increase trade.
However, the glass manufacturer faces significant challenges, including high energy costs. The cost of electricity in Kenya remains the highest in the region at Sh13 per kilowatt, compared to Uganda and Tanzania, which are at half that price. This makes it difficult for local manufacturers to compete with imported glass.
Mr. Rashid also pointed out that countries like Egypt have subsidies for their manufacturers, making it cheaper to produce. He added that the cost of transportation is another factor that affects pricing, with a 40-foot container full of glass from Mombasa to Kampala in Uganda costing Sh200,000.
Despite these challenges, the Government has imposed a 25 per cent duty on glass imports, a move which Mr. Rashid and other glass manufacturers lauded. However, the effects of the levy are yet to be felt due to the coronavirus pandemic.
Before the closure, Milly Glass had 480 employees, and at least 40 more were recruited after the upgrade. Mr. Rashid expressed optimism about the future of the company, citing the upgrade as a step in the right direction.
