Dozens of local manufacturers are risking incurring massive losses after failing to secure buyers of about 2.5 million barrier face masks.
Taarifa has seen masks piled up in a warehouse at the Special Economic Zone (SEZ) provided by the Rwanda Development Board (RDB).
It all began by the government appealing to local manufacturers to produce about six million masks a few days before the partial lifting of the lockdown in April.
Government asked manufacturers to mobilize resources and begin production so that people do not fail to get masks on the market.
Standards were set for the manufacturers and a list of authorized manufacturers was made public.
The government also imposed a price ceiling per unit; Rwf400 factory price. The retail price would be Rwf500.
Four million masks were produced and sent to the market.
At first, most manufacturers lacked capacity, expertise, and enough raw materials.
And in the first few days, the government was worried the manufacturers would not satisfy the demand.
Later, the manufacturers improved and production went on smoothly. Government officials inspected some of the producers and concluded everything was going well.
But, that was no guarantee on the side of the government.
A Chine Company partnering with a local businesswoman was awared a deal to set up a plant and begin producing masks in large quantities, including clinical versions.
Taarifa has learnt that Rwandair was dispatched to airlift machines and raw materials from China to support the company to set up shop.
On top of that, the government is said to have committed buying about 2 million masks to ensure the firm gets a soft landing.
The plan, according to sources, was also for the company to produce enough for export.
In the midst of all this, the local manufacturers encountered complicated market dynamics.
First, unlicensed producers began flooding the market with substandard masks in big numbers.
Distributors began seeing a decline in demand and sent back some of the masks from the manufacturers.
Meanwhile, the government continued pushing manufacturers to produce as much as possible.
Each licensed firm was required to submit a daily report on how many items they produced. Failure to do so would lead to cancelation of a license.
As of Sunday evening, unfortunately, more than 2.5 million masks were piled up in a warehouse.
“We are very concerned,” said, one of the manufactures.
“My firm has 100,000 masks in this warehouse you see. I am worried this is going to be a disastrous loss.”
Like many others, these manufactures borrowed money to invest.
They purchased more machines and procured raw materials to be able to honor their commitment to the government.
They are hoping the government will do the needful to support them.
RDB was the appointed focal point in this arrangement.
Zephanie Niyonkuru, RDB’s COO, told Taarifa that, “They shall start distribution tomorrow (Monday).”
He said the manufacturers have since formed a joint venture and that they use that warehouse as an aggregation center, from where they process distribution to different locations across the country.
“One of the other things the government did is to scrap VAT on masks made in Rwanda to ensure the final price (for end buyer) becomes affordable,” Niyonkuru said.
He added that the idea of having a centralized location for aggregation is geared at speeding up the distribution process.
“Moreover, NGOs or anyone else coming to buy will have a centralized location to buy masks from. It also helps in terms of tracing and curtailing those who produce masks that don’t meet the standards,” he said.