Uganda tariffs have hit Pwani Oil Company’s range of products hard, slowing down the firm’s bid to establish presence in the region.
Uganda imposed a 10 percent excise duty on manufactured goods from Kenya making them relatively expensive in its market and uncompetitive against local products.
Pwani Oil has a range of products including soaps and oils introduced last year in December that are specifically meant for Uganda, but the trade barriers have seen sales almost halve.
Company commercial director Rajul Malde said before the tariff the firm used to sell four truckloads of soaps worth $140,000 but this has so far slumped to $70,000 since the excise duty came into effect in April.
“The 10 percent duty has become an impediment to our products that destined for Ugandan market and this is something that needs to be addressed because it is affecting our business in that country,” said Mr Malde.
“The duty has made our products to the country 10 percent more expensive than the locally produced ones hence creating unfavourable climate for competition.
Pwani Oil manufactures Sanyu bathing soap meant for the Ugandan market.
Mr Rajul also said that penetration into Tanzanian market, where it also has specific types of soaps, has not been easy due to trade barriers.
The firm’s Kikambala plant can run for a whole month just producing goods for the Tanzania market, especially bar soaps.
He said the export market would have been the best to supplement revenue on goods that are sold locally given that the purchasing power of Kenyans has been going down in the recent days.
Kenya has been at loggerheads with its neighbours over the trade barriers Tanzania and Uganda have been imposing.