Battery makers face crisis over raw material shortage
Kenyan battery manufacturing sector is facing a crisis which could lead to closure of business due to a lack of raw materials as a result of smuggling of lead into neighbouring countries.
Players in the industry now want the Kenya Kwanza government to act fast to end the thriving illegal business.
Associated Battery Manufacturers (ABM) Managing Director Guy Jack said if not well handled, the smuggling would stifle the sector.
According to Jack, his firm’s scrap batteries collection had dwindled by over 500 tonnes. ABM has a direct and indirect employee base of over 2,000 people including scrap metal dealers.
“We are in a very precarious position, if not controlled we will have no option but to shut down, and as a result over 2,000 workers will be left jobless,” he lamented.
Guy said ABM has invested well over Sh1 billion in the last three years, all riding on the back of secure raw material availability, adding that its key raw material is scrap batteries sourced from all over the country.
The government he said should implement the Scrap Metal Law enacted in 2015 to the letter if the illegal exportation of scrap metal is to be contained.
“The legislation was meant to support the retention of the raw material for value addition and provided stringent conditions under which exports of lead would be permitted. Lead smuggling is rampant in the border towns of Loitoktok, Taveta, Busia and Malaba,” said Guy.
He added, “Why would it take years to implement a law that is critical to safeguarding jobs for Kenyans and growing the manufacturing sector?” posed Jack.
He however hailed the Kenya Revenue Authority (KRA) for the role its officers had played in containing the vice by arresting and intercepting trucks along the border points. A number of drivers have been arrested and charged in court but the penalties meted out are so lenient to serve as a warning.
The country is currently facing a major shortage of raw material because scrap metal dealers are “exporting” used batteries to Uganda and Tanzania smelters who, in turn, export refined lead out of the EAC to Asia.
“We are also aware of cases of exports of lead ingots camouflaged as “elevator counterweights”. This is a case where we export our manufacturing jobs...which will result in the closure of battery manufacturing in East Africa,” Guy observed.
He said Kenya has potential in battery manufacturing but that is hampered by the irregular and illegal handling of recyclable lead, the most economical source of raw material for battery manufacturers anywhere in the world.
The region has two lead-acid battery manufacturers, Associated Battery Manufacturers (East Africa) Limited and Uganda Batteries Ltd who both produce for East Africa Market and the surplus is exported to Comesa and ACFTA regions.
The local manufacturers use locally acquired raw material from recycling spent-lead-acid -batteries (SLABs). The EAC legislation bars the export of SLABs, crude lead or refined lead as an attempt to curb illegal smelters since they are considered hazardous waste.
However, none of the State agencies has enforced that policy. The major importers of the raw battery scrap material from EAC include Dubai, India, Korea, Malaysia, China, and Indonesia among others.
Its consumption of Scrap Lead Acid Batteries (SLAB) is 30,000 tonnes per year, while its production capacity is 50,000 tonnes of SLAB a year.