The makers of Chloride Exide batteries, Associated Battery Manufacturers East Africa (ABM Group), has decried the soaring electricity price which it says is hurting the competitiveness of its products.
The Athi River-based manufacturer said its power bills have soared 20 per cent over the past six months, putting it in a tight spot against competitors operating in Comesa countries that enjoy cheaper power.
According to the battery maker, the trend negates the government’s promise in December to discount power tariffs for large businesses and manufacturers who operate from 10pm to 6am when most households shut down and electricity demand is low.
“We are yet to reap the benefits of the promised subsidy on electricity. Last month power bills went up despite the government’s commitment to manufacturers under the Big Four agenda,” said ABM managing director Guy Jack.
The company said it spends about Sh20 million monthly on electricity to produce 1.2 million batteries a year or about 100,000 a month.
Electricity, seen as a raw material, is a big part of the firm’s operations as it is used to charge manufactured batteries. ‘‘When power accounts for so much of your costs and it is expensive, then it becomes a huge challenge,” said Mr Guy when the company received the ISO 9001:2015 certification on quality management and
environment sustainability last week. The certification is awarded following an audit of a company’s various suspects of production and their alignment to best international standards.
In January, ABM Group criticised a pollution report that linked it to extensive lead contamination at battery recycling plants in Athi River and surrounding communities.
The firm makes automotive and solar power batteries for the East African region and derives its raw materials from the local market.
It was established in 1963 by British firm Chloride Group and has a production capacity of about one million batteries per year.
South African manufacturer of vehicle components Metair acquired a 25 per cent stake in ABM at a cost of Sh730 million.
ABM and Uganda Batteries Limited (UBL) are the region’s largest lead acid battery manufacturers, producing an estimated 30 per cent of the East African market requirement.