Smuggling puts battery manufacturing industry at risk

The Kenyan battery manufacturing sector is facing a crisis due to lack of raw materials as a result of smuggling of lead into Uganda.

Industry players blame officials from the Ministry of Industrialisation for failing to act, even as the illegal business continues to thrive across the border.

In a statement, Associated Battery Manufacturers (ABM) Managing Director Guy Jack said if not well handled, the smuggling would stifle the sector.

He accused the ministry of not making attempts to implement the Scrap Metal Law enacted in 2015.

“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 Busia and Malaba, a business which has gone on for the last one year unabated,” said Jack. “Why would a Ministry take three years to implement a law that is critical to safeguarding jobs for Kenyans and growing the manufacturing sector?” posed Jack.

Also to be blamed according to Jack is the Kenya Revenue Authority personnel who have failed to arrest the culprits.

The country is currently facing a major shortage of raw material because scrap metal dealers are “exporting” used batteries to Ugandan smelters who, in turn, export refined lead out of the EAC.

“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 batterymanufacturing 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 the batterymanufacturers anywhere in the world.

The region has two lead-acid battery manufacturers ABM and Uganda Batteries Ltd who both produce about 30 per cent of the East African market requirement. The rest is imported from various external sources such as Korea, India, Malaysia and Spain.

The local manufacturers use locally acquired raw material from recycling spent- lead-acid -batteries (SLABs).

The EAC legislation bars export of SLABs, crude lead or refined lead as an attempt to curb illegal smelters since they are considered hazardous waste.

Constant requests

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 is estimated at three million batteries per year, while production capacity is only about one million batteries a year.

“What has caused the delay to implement the law despite constant requests to the Ministry of Industrialisation to take action? Not even the Scrap Metal Council which the law proposed to be appointed has been done,” posed Jack.

He blamed the State for allowing exports of scrap batteries largely carried out by briefcase smelters.

“It is important that a policy shift towards value-addition of all our exports be made if we are to realise the goals of Vision 2030 or indeed the four pillars for growth announced by President Uhuru Kenyatta,” he advised.

Jack said his firm has invested heavily in the last four years in the expectation that the government would strictly enforce the Scrap Metal Act.