State seeks contract manufacturing to curb supply hurdles

Industrialisation, Trade and Enterprise Development CAS David Osiany (centre) with Damaris Aracil from Kimberly Clark and Sai Pharmaceuticals CEO Rajiv Joshi at the opening of Huggies plant. [Wilberforce Okwiri, Standard]

The government is advocating for contract manufacturing to skirt around the challenges of the global supply chain, which worsened during the pandemic.

Industrialisation, Trade and Enterprise Development Chief Administrative Secretary (CAS) David Osiany said manufacturers ought to learn from the lessons taught by Covid-19.

Osiany, who was speaking at an event by American multinational Kimberly-Clark, the manufacturers of personal care and hygiene products in Nairobi, yesterday, said contract manufacturing will ensure flagship companies get their profits as well as provide jobs for the locals.

The CAS was referencing one of Kimberly-Clark products – Huggies diaper – being manufactured in Kenya. Sai Pharmaceuticals is the contracted manufacturer for the diapers whose main distributor in the country is Kimfay.

Trade hub

Sai Pharmaceuticals chief executive Rajiv Joshi said the firm has invested Sh3.4 billion ($30 million) in the project. “This hub in Kenya will help us to be more flexible and responsive with the rest of East Africa,” said Damaris Aracil, supply chain director for the Middle East and Africa.

CAS Osiany said the partnership is a sign that Kenya has met the global threshold of what good industries ought to be in terms of safety and quality. “I hope this then means that we can get products that are slightly cheaper as well, noting that we have diverse citizenry,” said the CAS.

He urged firms to trust someone else to handle production rather than transport the products all the way.

Such, he noted, will avoid shortages of products in case of an emergency like the Covid-19 pandemic.

“Covid-19 taught that global supply chain can be grounded to a halt. And I am excited for the birth of contract manufacturing,” said the CAS.