Firms close as plastic bag ban begins to bite

By Henry Neondo

Following a move by the Kenya Finance Minister Amos Kimunya to slap a 120% tax on plastic bags, viewed by environmental activists as environmental hazards, Hi-Plast Limited, makers of polythene bags has closed its plants in Nairobi and Mombasa, citing prohibitive production costs.

About 600 workers have been rendered jobless as the company, through the Kenya Association of Manufacturers, prepares to lobby the Government to drop the thickness requirement and scrap the 120 per cent levy on the products which would push the cost of manufacturing further up.

“The impact of this had not even reached the consumer before the Minister for Finance increased the minimum gauge to 30 microns. These are measures that we feel are punitive and will make the bags more expensive, making them unavailable to to the majority of Kenyans,” said Mr Mahesh Dodhia, the CEO of Hi-Plast limited.

Dodhia said yesterday the new requirements were hurting the industry and threatened to relocate his business to another country.He said his company has not been able to sell several tonnes of the thinner micron wrapping papers and shopping bags which were produced before the budget .

“This is a huge loss. We have them all stocked up in our factory and we do not have any means of disposing of our stock” said Dodhia as he showed us the company’s idle machinery.

The stores are stocked with raw materials. Dodhia said if properly disposed of, the thinner plastic films were not harmful to the environment.

Plastic films and shopping bags are used by a majority of consumers in Kenya. Plastic is used in the packaging of milk, bread, soaps and sugar.

The prices of some of these commodities have gone up three months before the implementation of the 120 per cent tax on the products.

After consultations with industry players, the Kenya Bureau of Standards last month directed that all manufacturers of plastic wrapping paper to increase the minimum gauge of plastic bags to 20 microns from 10 microns.

The new minimum gauge requirement has meant that the industry now uses more material and time to produce the same amount of plastic bags thereby increasing the cost of production.

And in October, the Government will impose a 120 per cent tax slapped on the polythene bags in the June budget.According to the United Nations Environmental Programme says plastic bags take 20 to 100 years to degrade.

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