Indian firms eye Kenya’s plastics market

By Macharia Kamau

The plastic industry is set for major competition with the entry of ten Indian companies into the local market.

The firms will partner with their Kenyan counterparts and start operations this year.

"Each of these companies will be investing more than $1 million (Sh78 million) in Kenya this year alone," said Mr Sachin Shah co-chair of Plastindia Foundation, the umbrella body for the Indian plastic industry.

Shah spoke last week when he led a delegation of Indian businessmen on a fact- finding visit to Kenya.

He said more than 30 plastic manufacturers from Kenya would make a similar visit to India early next month. While in India, Kenyan manufacturers will also attend the seventh International Plastics exhibition and Conference in New Delhi to learn from and network with global industry players.

The interest in Kenya by the Indian plastic makers is in spite of the slump in the economy that grew by a dismal 2.1 per cent following post poll crisis and the global financial turmoil.

A heap of plastic bottle waste ready for recycling. Recycling in India is a robust business where firms mint millions of dollars from waste plastics that would have otherwise been hazardous to the environment.

"The crisis in the global economy has affected many economies and the Kenyan incidence was an unfortunate one and we have evaluated and seen that the country has great potential and stands out in the region," he said.

The companies are looking at using the country’s strategic positioning to penetrate the larger regional market that has a population of about 400 million people.

According to the Ministry of Industrialisation, there are close to 100 plastic manufacturing companies in Kenya with capacities ranging from 1,000 to 8,000 tonnes per year.

Most inputs for the plastic industries are imported from Asia with India being one of the main exporters of plastics into the country, both finished plastic goods and raw materials.

Investment

"Indian companies investing in Kenya or partnering with local plastic manufacturers would see both countries benefiting mutually and with time correct the balance of trade," he said. Kenya stands to gain from increase in the number of jobs and technological transfer.Trade between Kenya and Indian, in plastics and other goods both manufactured and raw materials, is skewed in India’s favour.

Export Promotion Council data shows that in 2007 Kenya imported goods worth Sh56.8 billion compared to the exporting goods worth Sh5.8 billion. The balance of trade between the two countries has increased eight fold in a decade, to stand at whooping Sh51 billion compared to Sh5 billion in 1998. According to the Kenya National Bureau of Statistics, in 2007 the country exported Sh4.4 billon worth of plastic articles, but mostly to the regional market.

Shah however said that the trade between the two countries is worth much more when one factors in trade in services and can easily stand at over $1 billion (Sh78 billion)

Challenges

The global plastics industry has faced challenges with lobbyists campaigning for the banning of plastics. They argue that plastics pose a hazard to the environment, given that a majority of them are non-biodegradable.

The government has in the recent past proposed measures to minimise use of plastics and the City Council of Nairobi went on to ban plastic bags in the city but retracted its position after a public outcry.

According to Shah, the world needs to find ways to live with plastics, as they are an essential product and used in by all sectors of an economy. Industrialisation ministry says the sub sector contributes a lot to the national economy by providing cheap, affordable products which are gradually replacing expensive metal, rubber and ceramics. Shah said that plastics is one of the fastest growing industries in the world.

"Plastics have a vital role to play in any economy and the next two decades will witness an unprecedented growth in all sectors of plastics industry and this demands a clear and long term strategies that deal with both the pros and cons of plastics," he said.

He added that recycling is one of the fundamental ways of dealing with used plastics, which he conceded are a nuisance and an environmental hazard.

Recycling in India is a robust business and recycling oriented companies minting millions of dollars from waste plastics that would have otherwise been hazardous to the environment.