Kenyan multinational targets Zimbabwe’s paper industry

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By Staff Reporter

KENYAN multinational, Paperbags Limited (Paperbag), is making inroads into the Zimbabwean paper industry after it was enticed by the huge market, it has emerged.

The company, according to information on its website, manufactures a wide variety of packaging materials, mainly paper bags and sacks.

The multi-million-dollar industry is currently dominated by Hunyani Board and Paper, which enjoys the monopoly over supply of paper-based packaging materials.

Paperbags is reportedly seeking to initially enter the market as an exporter of packaging materials for flour and mealie-meal before eventually setting up a manufacturing plant in the country.

It is taking advantage of provisions of the Africa Continental Free Trade Area (AfCTA), a multilateral trade arrangement involving all African states.

The agreement initially requires members to remove tariffs from 90% of goods manufactured on the continent, allowing free access to commodities, goods, and services across Africa.

According to information at hand, the expression of interest by Paperbags has drawn interest from market players as it allows them to access the products at significantly lower prices.

Sources close to developments say the company’s executives are already in the country and are set to meet with wheat millers accounting for 99% supply of flour in Harare Tuesday.

“A meeting with the company’s executives is already set for tomorrow at a local hotel. Their expression of interest has greatly excited players in the sector because of the seemingly lower prices their products will cost given how they will benefit from the AfCTA arrangement,” a source said.

“Demand for those products is surging. The country currently consumes 12 tonnes of self-raising flour per month, and this translates to about 10 million paper packs of different sizes.  That is set to increase significantly when farmers start receiving their agriculture produce. For the past 42 years, Hunyani has been enjoying monopoly of the market and this is going to be a game changer,” the source said.

“Most of their clients have been complaining about the quality of service they have been receiving from Hunyani; their payment systems, delivery and other issues. The entry of these people is going to shack them a little bit, especially given that preliminary indications are that Paperbag’s products could come at a price 15% less than the one currently being witnessed.”