Pwani Oil closes plant, blames lack of dollars
Pwani Oil commercial director Rajul Malde.
Pwani Oil, the manufacturer of Freshfri, Salit and Fry Mate cooking oils, has temporarily shut down its oil plant due to shortage of raw materials, which it blamed on difficulties accessing dollars to pay suppliers on time.
The consumer goods manufacturer said Friday its bankers were only processing half of the dollar orders it requires to pay the suppliers of crude palm oil imports from Malaysia amid stiff global competition.
“Getting sufficient amount of dollars required to support the factory in terms of getting sufficient raw materials is not happening. We are not even running the plant right now because of lack of raw materials [crude palm oil],” Pwani Oil Commercial Director Rajul Malde said.
“We are competing for the same oil with the rest of the world and, therefore, prices are high. Added to that, we can’t pay on time so we don’t get priority in supply.”
Central Bank of Kenya Governor Patrick Njoroge Tuesday last week dismissed concerns by the Kenya Association of Manufacturers (KAM) that persistent dollar shortages were triggering the emergence of a parallel exchange rate where lenders buy and sell well above the printed official rate.
Dr Njoroge maintained the foreign exchange market transacts about $2 billion of the US currency every month, which he indicated was enough to meet demand from importers and companies for payments like dividends.
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