Manufacturers hard hit as earnings drop

A visit to Kenpoly, which sales plastics, reveals some degree of normalcy.

A drive through Ruaraka, where East African Breweries is located, shows things are not rosy.

On a good day, their academy would have several students learning, researching, designing, making or testing their innovations before deployment to the market.

Rakesh Rao, the chief executive officer at Crown Paints, cuts the image of a man carrying the whole world on his shoulders.

You would expect to find him bubbly and dusting his suit to attend a manufacturing industry sales party, now that the Covid-19 pandemic has taken away the cheap imports nightmare that has hurt the sector for decades.

But as we are ushered into Mr Rao’s corner office at Crown Paints head office in Nairobi’s Industrial Area, we find a worried man. He bravely wears the demeanour of a person who is carrying more bad news than he is willing to deliver.

In just two months, he has seen sales tumble by more than a third. Ironically, this would have been the best time, the dream of any manufacturer, given that the pandemic has handed them an edge that they have not had for decades.

CONTAINMENT MEASURES

He has just ended a video-conference with his office in Mombasa, having been cut off by containment measures. He is preparing to have another meeting with his Kisumu office. The subject of these meetings is sales and how to survive the sharp drop in business.
He says he has already set in motion a plan on how to deal with wage bill after revenues dropped below the 60 per cent threshold. Most of his staff already know what will happen when this happens: pay cuts.

“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,” Mr Rao says.
“ Priorities of most of our customers changed to survival. Most are now focused on essentials like food and conserving cash. The social distance rules also forced many construction sites to close down,” he says.The fortunes of the paint manufacturer are intertwined with those of the real estate sector and once it sneezes, Crown Paints, just like the rest of the paint makers, catches a cold. With construction sites shut or operating on minimal numbers, order numbers for paint […]

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