This archive report was first published on 19 May 2020.
Kenya's Manufacturing Sector Hit Hard by COVID-19 ¶
As the COVID-19 pandemic continues to spread globally, Kenya's manufacturing sector is feeling the pinch. With lockdowns and containment measures in place, many companies are struggling to stay afloat.
At Crown Paints, CEO Rakesh Rao is facing a daunting task. In just two months, sales have tumbled by more than a third, a stark contrast to the usual boom in the sector. Rao attributes this decline to the lockdowns in Uganda and Rwanda, which have led to a significant drop in orders from customers.
"We were okay until March. But after the lockdowns in Uganda and Rwanda and the customers stopped orders due to the uncertainty that came with the cessation of movement, our sales dropped by about 40 per cent," Rao says.
With construction sites shut or operating on minimal numbers, order numbers for paint and other accessories for home décor have nosedived. The firm's warehouse is filling up with paint faster than orders are coming in, and Rao has had to put on hold any capital-intensive investment plans for the year.
Other companies in the sector are also feeling the heat. At Kenpoly, sales representatives are busy taking orders from bulk buyers, but the attendant notes that this is nowhere near their peak days. The parking outside is usually full of trucks, and the shops would be busier, at least threefold.
Even the usually thriving East African Breweries is losing sales at an unprecedented scale. With most bars and social places shut, the brewer is struggling to stay afloat. Last week, the company issued a profit warning, expecting its profits to shrink by at least one quarter in its current financial year.
The global lockdown has also made it difficult for companies to import various gadgets from China, which are used in prototyping. At Gearbox Kenya, a technology firm that markets itself as a hardware prototyping space, students are at home trying to learn online, which is a nightmare for practical subjects that require physical presence in the laboratory.
As the pandemic continues to spread, it remains to be seen how Kenya's manufacturing sector will recover. For now, companies are struggling to stay afloat, and the future looks uncertain.
