Imports threaten survival of Panasonic Tanzania

A local battery manufacturer is struggling for survival in the domestic market, under the weight of poor investment and change in technology, industry sources said in Dar es Salaam.

Panasonic Energy Tanzania Limited is reportedly undercapitalised, thus failure to cope with technological dynamism that had in turn lowered the demand for dry cells to power transistor radio sets and devices.

The local battery maker, which has employed 167 Tanzanians, said their future looks bleak due to the influx of cheap imported batteries from some Asian countries that has apparently undermined their operations due to market distortions. "Don't stop imports (of dry cells) .., but please let there be fair competition.

That's our request," the Managing Director of the company, Yoshiyuki Sako, told the Minister of State in the Prime Minister's Office (Empowerment and Investment), Eng Christopher Chiza in his tour to the factory in Dar es Salaam last week. But the sources, said cheap imports was not the main problem.

It should have devised strategies to compete. The battery manufacturer had failed to adjust to changes that had affected the demand for batteries due to increased use of electricity-powered (alternative current) devices as more Tanzanians are connected to the national power grid, they said.

According to the sources, low output and high overheads make the local manufacturer fail to benefit from economies of scale.

The Fair Competition Commission admits they had encountered cases of counterfeit batteries in the market in some of their operations in the past but they were not of significant amount.

FCC's Senior Communications and Public Relations Officer, Mr Frank Mdimi said the commission had seized counterfeit batteries in the market in the past but it was not of substantial amount.

Efforts to contact officials of the local battery maker yesterday proved futile. But they had earlier told the minister last week that the company was suffering from the onslaught of cheap products from China imported or smuggled into the country through Bagamoyo in Coast Region, Kunduchi in Dar es Salaam and Tanga.

Production at the factory had declined from about one million batteries per day to 250,000 only, they said. A total of 167 Tanzanians have been directly employed at the factory, according to the Human Resources Manager, Mr Palla Michael.

Panasonic Energy Tanzania, commands 40 per cent of the domestic market for dry cells which is around 250 million cells per year.

Eng Chiza said the government would investigate and take appropriate action to make sure there was a level playing field in the market but advised the local manufacturer to do further survey to establish whether there were other factors holding them down.

"We are going to look at what is going on but you need also to find out why your business goes down. Is it because of cheap imports only or there are other factors?," he inquired.

The minister said it seemed cost of production were high because the manufacturer imports about 98 per cent of the raw materials.

Officials of the plant had earlier told the minister that about 98 per cent of their raw materials were imported.

The products include carbon rods, polyethylene, chemicals, separator papers, insulators, integrated caps, red rings and shrink film. They said they were asking for consideration of duty waiver on their raw material imports.
Source: Daily News, reported from Dar es Salaam, Tanzania
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