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Economy

Cushion firms in remote areas, State told

A Chinese investor running a gypsum boards manufacturing plant in Kitui County says the government needs to cushion firms venturing into regions where electricity, water and roads are underdeveloped.

Yao Chen, the managing director of Mwingi Gypsum Boards Company, Wednesday said his firm was experiencing serious challenges due to poor infrastructure which investors in major towns like Nairobi and Mombasa do not have to contend with. 

Mr Chen, who set up base in the Mui basin said his firm had footed huge infrastructure-related bills.

“We started from square one and we just feel that the government should have supported our investment by at least providing adequate and steady supply of electricity and water,” Mr Chen told the Business Daily in an interview at the plant.

He said the gains accrued out of investing closer to the raw material had been eroded by lack of proper infrastructure as his firm ended up paying heavy operating costs.

Mr Chen said the Kenyan government should put investment friendly policies to guarantee the necessary support that would lower the cost of doing business to attract more investors.

Kenya Power promised us a steady supply of 1,000 kilowatts but power outages are the order of the day here and we’re  spending more on fuel than anticipated,” Mr Chen said adding efforts to drill three boreholes at the factory sites had yielded only coal matter unsuitable for any use.

The gypsum manufacturer who is running a similar plant in Tanzania said he had created 150 direct jobs in Mwingi and expected certain exemptions in corporate tax from Kenya Revenue Authority as is the case in other countries.

Vice President Kalonzo Musyoka who opened the Sh255 million gypsum factory said the State was looking into such concerns.

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