A steel manufacturer has threatened to shut down its wire plant and consequently lay off 250 employees.
The Kenyan manufacturer penned a letter to the Kenya Association of Manufacturers stating that the current business environment presented an unfair competitive advantage.
According to the letter dated July 10, 2024, the manufacturer lamented that two companies in the country had been exempted from payment of duty amounting to billions.
The manufacturer and others operating in the industry lamented that the two companies had been importing raw materials duty-free, for a year an agreement that was not extended to other industry players.
“If this scenario continues, we will be unable to compete in the market and will have no option but to lay off approximately 250 workers in our wire division and shut down our manufacturing facility,” stated the manufacturer in a letter to the Kenya Association of Manufacturers.
A spot-check revealed that the two organisations gained an exemption of duty from the East African Community through a gazette notice dated October 2023.
The manufacturers are now claiming that the billions row with the two organisations will force them out of business.
Additionally, the steel manufacturers have continued to raise concerns on how both competitors managed to get an exemption of duty which did not extend to other players in the industry.
However, the companies have maintained that their exemption from duty was based on merit.
The shutdown threat comes after a top Kenyan maize milling factory in Nairobi shut down its operations and put everything up for sale.
On Thursday, January 25, the firm overseeing the sale intimated that the property was being sold at Ksh400 million.
The company however did not divulge details on the circumstances that led to the shutdown.
