Pwani Oil, the maker of Freshfri, Salit, and Fry Mate cooking oils, has temporarily shut down its oil facility due to a scarcity of raw materials, which it blames on its inability to pay suppliers on time due to a lack of dollars.
In the face of fierce worldwide competition, the consumer goods company stated Friday that its bankers were only processing half of the dollar orders it needed to pay suppliers of crude palm oil imports from Malaysia.
“Getting sufficient amount of dollars required to support the factory in terms of getting sufficient raw materials is not happening. We are not even running the plant right now because of lack of raw materials [crude palm oil],” Pwani Oil Commercial Director Rajul Malde said.
“We are competing for the same oil with the rest of the world and, therefore, prices are high. Added to that, we can’t pay on time so we don’t get priority in supply.”
Last week, Governor of the Central Bank of Kenya Patrick Njoroge dismissed concerns raised by the Kenya Association of Manufacturers (KAM) that persistent dollar shortages were leading to the emergence of a parallel exchange rate in which lenders buy and sell considerably above the printed official rate.
