Jobs at risk as ceramics firm plans to suspend production

Wednesday January 8 2020

 

Chalinze. At least 3,000 jobs are in jeopardy as a major producer of ceramic tiles plans to halt production early this year for at least four months to pave the way for accumulated stocks to be sold, The Citizen has learnt.

Keda (T) Ceramics Company Limited, which was previously known as Twyford, is planning to stop production due to what it says is decreasing market share and fully-socked warehouses.

Speaking in an interview with The Citizen, Keda Ceramics managing director Tony Wu said the factory has more than 4 million square metres of tiles in stock in its warehouses.

“…if we stop the production line for four months, we can sell off half of the stock...if we stop for about eight months then we can be sorted out,” he said adding that this is according to the market trend.

Mr Wu noted that if the factory operates at full capacity, it can produce up to 50,000 square metres a day. But they don’t do do this - and produce about 42,000 square metres a day because of the situation.

Explaining the reason for this Mr Bruce Ni - who is Mr Wu’s assistant - said a lot of cheap tiles are imported, mainly from China and India. There’re also less exports due to numerous trade barriers including non-tariff barriers like uplifting import valuation prices.

Advertisement

Tanzania needs an average of 20 million square metres of tiles per year and Keda Ceramics can produce up to 18 million square metres yearly, which is about 90 percent of local demand.

Who will be affected

Keda Ceramics created the tiles industry value chain from mining to distribution. Stakeholders of the tiles industry’s value chain involve mineral suppliers, transporters, the central government and local authorities, labour, services providers (Tanesco, Tancoal, water authorities, etc), whole-salers, retailers and many others.

According to Mr Ni, the whole production chain will be influenced as a result. Government revenues and employment opportunities will decrease tremendously, he suggested.

“Keda has created about 1,000 jobs directly and 2,000 indirect jobs,” he said, adding that about 95 percent of the raw materials used are locally obtained. Also, 100 percent of the energy used by the comany is purchased locally.

A Keda worker, Mr Saidi Msangi – a resident of Chalinze in the Coast Region – said closure of the factory will affect him directly because he depends on it as its salaried employee.

“I have been employed by Keda since November 2017, and depend mostly on my job because it enabels me to pay house rent and feed my family”.

Explaining how other stakeholders will be affected Mr Ni, said “per day the factory consumes 900 tonnes of raw materials, and 200 tonnes of coal, paying Local Levy, Service Levy, Royalty, etc. to TRA, Tanesco, Tancoal, ministry of Minerals and local governments,” he explained.

Also, the company’s contribution of foreign exchange income would be affected because, Keda Ceramics exports its products to Kenya, Uganda, Rwanda, Burundi, Congo, Malawi, Mozambique and Zambia. In the period of one year alone, the company earns more than $10 million in foreign exchange.

Industry ministry’s position

Recognising the situation, the deputy minister for Industry and Trade, Ms Stella Manyanya, called upon Tanzanians to prioritise the use of local products over imported ones because the local ones are of high quality - and are affordable.

“Tanzania now produces tiles. We have two factories which can fill the local market demands, and also for exportation, so I would like to advise those who are used to import these products to stop doing so as we have enough of our own,” she said during her visit of the factory.

She further noted that “we need to have fair competition; but we also need to ensure that we protect our local industries so that they can grow and carry on…. so I promise to do whatever it takes to ensure that local industries are effectively protected”.

Focus on industrialisation drive

Mr Wu said that, in the next five years, Keda would focus on starting to produce sanitation-related products because they also use the same raw materials.

“ .. Our focus on industrialisation will correspond with how quickly we are going to focus on building products like sanitary sets, toilet sets as the raw materials for these are the same as those for producing ceramics. Also, we are planning to manufacture more big tiles. We do have the plant and space to expand our factory”.

He then says that “we have written letters to the ministry (outlining their company’s plans). But, as we want to expand, we must sort out all the production chains”.

Mr Wu mentioned some challenges which Keda faces as including delays in obtaining work permits for more skilled workers from outside the country.

“Manufacturing is a very technical job, and it is not always easy to find people with the requiaite skills - even holders of academic qualifications such as diplomas, university degrees may not have the requisite experience or skills . We can’t find these skilled and experienced workers here because the tile industry is new in Tanzania”.

Contributions as CSR and others

According to the factory’s report of 2019, in efforts to improve public relations, Keda Ceramics organised a programme for Chinese doctors to give free medical treatment for over 200 local staff. “A good health plan does not translate into a blank cheque. Continued investment in domestic resources is part of a mutually-accountable partnership. Keda Ceramics invested Sh5 million to support our local staff in healthcare,” he said.

The company also donates to orphans. The Pannaserara Orphanage in Dar es Salaam is receiving an increasing number of orphans. But, the living conditions of orphans are difficult.

When the Keda Ceramics executives learned about this, they got their employees to send ceramic tiles, books and food to the orphanage worth Sh4.5 million on May 26, 2019, thus expressing Keda’s concern for the children in the orphanage.

Contribution to local security has also been done. To improve the living conditions of the staff, Keda started the construction of a five-block staff dormitories at the Coast Region’s police station in Kibaha. However, due to the limited funds, the construction could not be completed as earlier scheduled.

The ceramic tiles donated by the Keda Company worth about Sh5.5 million were for the construction of the police dormitories - a gesture which was warmly welcomed by local officials.

Seeking to ensure clean water supplies for the village around the factory, as well as clean safe water for Ruvu villagers, Keda Ceramics organised the digging of a water well. The move was well-received by local authorities, and the implementation is in the pipeline.

Furthermore, to solve the problem of shortage or lack of medical services for local communities, Keda Ceramics renovated the clinic at Pingo Village near Chalinze Town, which included a laboratory and two offices.

The work is slated to be completed and be ready for use in January this year.