Glass manufacturer sees bright future after upgrade, Covid-19

Inside Milly Glass Works Limited in Mombasa. [Jeckonia Otieno/Standard]

On September 2019, after nine years of uninterrupted operations, the furnace at Milly Glass Works Ltd in Mombasa went off; it was time to upgrade.

The plant, which used to manufacture 100 tonnes of glass per day closed shop for three months.

Mohammed Rashid, the Chief Executive Officer said the upgrade was necessary so as to look into the future in line with President Uhuru Kenyatta’s Big Four Agenda.

“Although the local glass market has not been optimal, we are looking forward to the scenario changing. We hope local companies will start buying bottles locally,” he said in an interview.

The company is also targeting the Africa Free Trade Area which becomes operational from June this year.

After manufacturing 30 tonnes of glass after it reopened on December 15, Mr Rashid is upbeat for increased trade.

“Because the furnace runs non-stop, we have to continue manufacturing glass even if there will be no market for it,” he said.

Milly Glass is one of Kenya’s two glass manufacturers that boast of the latest technology in glass making.

Rashid, however, said that despite the investment his firm has made, the market has not been friendly to local manufacturers.

He noted that local companies prefer importing bottles as opposed to buying those that are locally produced; and there is a good reason for it.

“They argue that our prices are a bit high hence the preference for imported bottles, mainly from Egypt, which uses Kenya as a dumping ground," Rashid said.

"Looking at this issue critically, our prices are almost the same except for a few factors such as the cost of energy that hits us hard."

The cost of electricity in Kenya remains the highest in the region at Sh13 per kilowatt as opposed to Uganda and Tanzania which are at half that price.

Rashid also adds that countries like Egypt have subsidies for their manufacturers which makes it cheaper to produce.

“With such incentives, Kenya becomes an easy target for foreign companies to dump their products. This is why our local market is not vibrant,” Rashid said.

Before the closure, Milly Glass had 480 employees. At least 40 more were recruited after the upgrade.

Rashid explained that the other factor which affects pricing is the cost of transportation. He said it costs Sh200,000 to transport a 40-foot container full of glass from Mombasa to Kampala in Uganda.

“If we can have better roads, transport costs can drop and make local glass cheap,” he states.

Recently, the Government imposed a 25 per cent duty on glass imports, a move which Rashid and other glass manufacturers lauded.

However, because of little returns due to the coronavirus pandemic, the effects of the levy are yet to be felt. “The local economy needs to come back to life," he said. Rashid is also concerned some companies who should be buying glass from the local market are still importing it from Egypt with about four million bottles still coming into the country.