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Understanding Rwanda's Agribusiness and Manufacturing

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Understanding Rwanda's Agribusiness and Manufacturing Understanding Rwanda’s Agribusiness Manufacturing and SectorsUnderstanding Rwanda’s This book comes after the 50th anniversary of Rwanda’s Independence and provides the first ever comprehensive overview of firms in the country’s agribusiness and manufacturing sectors. Understanding Rwanda’s Agribusiness and Manufacturing Sectors puts these sectors into context historically, explaining how decisions and initiatives going back to the 1930s have contributed to determining the shape Understanding and composition of agribusiness and manufacturing in Rwanda today. These sectors, more than any others, have followed the ups Rwanda’s and downs of Rwanda’s history. The book also provides an in-depth Agribusiness and analysis of agribusiness and manufacturing in Rwanda today, with a focus on understanding the origins, evolution and capabilities of Manufacturing firms, and how these capabilities came to be. This overview, or Sectors “Enterprise Mapping”, gives the reader a detailed understanding of the ownership structures, products, systems, resources and exports of leading firms in Rwanda’s agribusiness and manufacturing sectors today. Finally, this book individually profiles forty-three of Rwanda’s largest manufacturing and agribusiness firms. This book is targeted at policymakers, academics, businesspeople, and prospective investors interested in gaining a better understanding of Rwanda’s industrial sector. Sachin Gathani and Dimitri Stoelinga Gathani and Stoelinga With a Foreword by François Kanimba, Minister of Trade and Industry, and an Introduction by Professor Måns Söderbom UNDERSTANDING RWANDA’S AGRIBUSINESS AND MANUFACTURING SECTORS UNDERSTANDING RWANDA’S AGRIBUSINESS AND MANUFACTURING SECTORS Sachin Gathani and Dimitri Stoelinga Copyright © 2013 The International Growth Centre Published by the International Growth Centre Published in association with the London Publishing Partnership www.londonpublishingpartnership.co.uk All Rights Reserved ISBN 978-1-907994-17-3 A catalogue record for this book is available from the British Library This book has been composed in Minion Pro Copy-edited and typeset by T&T Productions Ltd, London Cover design: Peninah Njuguna CONTENTS Foreword viii Preface x Acknowledgements xi About the Authors xii Introduction xiv Acronyms and Abbreviations xvii 1 Origins and Evolution 1 1.1 Industrial Development in Rwanda: An Overview 1 1.2 The Origins of Industry in Rwanda 5 1.3 The Foundations of Modern Rwandan Industry 19 2 Main Findings 37 2.1 Our Framework 37 2.2 Size of Firms in Rwanda’s Manufacturing and Agribusiness Sectors 39 2.3 Main Findings: Ownership Structure 41 2.4 Main Findings: Products 53 2.5 Main Findings: Systems 61 2.6 Main Findings: Resources 70 2.7 Main Findings: Exports 73 2.8 Summary of Main Findings 77 3 Coffee 81 3.1 Sector Profile 81 3.2 Coffee Business Center (CBC) 85 3.3 Kivu Arabica Coffee Company (KCC) 87 3.4 Rwacof 90 3.5 Rwanda Trading Company (RTC) 92 3.6 Rwashoscco 94 vi CONTENTS 4 Tea 97 4.1 Background and Overview 97 4.2 Rwanda Mountain Tea (RMT) 100 4.3 Sorwathé (Société Rwandaise de Thé) 104 5 Staple Crops 107 5.1 Background and Overview 107 5.2 Bakhresa Grain Milling 111 5.3 Pembe Flour Mills 114 5.4 ICM Rwanda Agribusiness 116 5.5 Minimex 119 5.6 Kabuye Sugar Works 122 6 Horticulture and Specialty Plants 125 6.1 Background and Overview 125 6.2 Premier Tobacco Company (PTC) 128 6.3 Shekina Enterprises 131 6.4 Horizon Sopyrwa (Société de Pyrethre au Rwanda) 133 6.5 Sorwatom 138 7 Dairy and Beverages 143 7.1 Background and Overview 143 7.2 Bralirwa 146 7.3 Brasserie de Mille Collines 150 7.4 Inyange Industries 152 7.5 Laiterie de Nyanza (Agro-Processing Industries) 155 7.6 Enterprise Urwibutso (Sina Gérard) 157 8 Construction Materials 161 8.1 Background and Overview 161 8.2 Ameki Color 164 8.3 Cimerwa 167 8.4 Kigali Cement Company 169 8.5 Ruliba Clays 172 8.6 Safintra 175 8.7 Simaco/Afrifoam 177 8.8 SteelRwa 179 8.9 Tolirwa (Tôlerie Industrielle du Rwanda) 182 8.10 Ufametal 184 8.11 Uprotur 186 9 Other Light Manufacturing 138 9.1 Background and Overview 191 9.2 Anik Industries 194 9.3 Aqua-San 196 9.4 Kigali Steel & Aluminium Works 199 9.5 Manumetal 201 CONTENTS vii 9.6 Mutara Enterprises 204 9.7 Roto Ltd. 208 9.8 Rwanda Foam 210 9.9 Société Rwandaise de Chaussures (SRC) 212 9.10 Suku Paper Works/Safari Center 214 9.11 Sulfo Industries 217 9.12 Trust Industries 220 9.13 Utexrwa 223 Appendix 227 Bibliography 233 FOREWORD Rwanda, after more than a decade of sustained high growth, is embarking on a new phase of its development. The transition from a least developed country to middle-income status targeted by Vision 2020 will require high- er growth rates based upon a more diversified and productive economic base fuelled by private investment. In the future, growth will increasingly emanate not only from increases in productivity in agriculture but also from new investment in industry, services and export diversification. This book focuses on one of the foundation stones of the coming growth – industry – and it provides us with detailed information on the dynamics and the structure of Rwanda’s manufacturing and agro-processing sectors today. It will also provide policymakers as well as investors interested in our industrial development with a clear view of the history of Rwanda’s industrial sector, including its recent performance and a description of the leading enterprises. It highlights policies that have helped promote the sector’s development over the past decade. Most importantly, it conveys a sense of the sector’s considerable potential for further growth in the con- text of the wider regional economic integration. This book is part of a larger project undertaken by the Brookings Institu- tion with support from the African Development Bank and UNU-WIDER. This project, called Learning to Compete, is a comparative study of sev- eral African countries that focuses on export development, skills, foreign investment and economic clusters, all with the aim of understanding recent trends in productivity growth and ways to improve competitive- ness. When the International Growth Centre proposed including Rwanda among countries covered by this project, we were pleased to endorse that effort because we wanted to learn from their experience and share with other countries the findings and recommendations of the study. Laterite Ltd., a Kigali-based research firm that was contracted by the In- ternational Growth Centre to conduct this work, has – through its rigorous yet practical approach – brought an innovative and analytical voice to the ongoing review of trade and industrial policies in Rwanda. Through inter- views with the top management of our most prominent companies, this book maps out the present state of Rwanda’s leading industrial performers, FOREWORD ix singling out both challenges and the underlying opportunities. This anal- ysis will go a long way towards informing Rwanda’s strategic thinking to enhance trade and industrial policies and reforms. It highlights impor- tant issues such as the emerging role of the construction materials and agro-processing sectors, opportunities to expand significantly into neigh- bouring markets and the importance of facilitating investment from large national and regional investment groups and industrial conglomerates. At the same time, however, it provides a reality check on real constraints in the sector, including historically low export orientation, complications in sourcing raw materials, cost of transport and unstable demand, issues that we need to take into account when we design our industrial and trade policies. Those interested in Rwanda’s development – policymakers, academics, businesspeople and prospective investors – will, I am confident, find this book essential to understanding Rwanda’s industrial sector. It is a mile- stone in marking the next phase of Rwanda’s journey toward becoming a middle-income country. François Kanimba Minister of Trade and Industry PREfacE Rwanda achieved independence on 1 July 1962. This book marks the 50th anniversary of the country’s independence and tells the story of its manufacturing and agribusiness sectors by systematically looking at the evolution of firms in these sectors since the 1930s. These more than other sectors have followed the ups and downs of Rwanda’s history. Tracing their evolution allows us to understand in rich detail the current state and fu- ture potential of these sectors, which will be critical in Rwanda’s journey to achieving middle-income status. The backbone of this book is an enterprise map of Rwanda’s manufac- turing and agribusiness firms, tracing their origins and evolution, as well as current firm capabilities and how they were formed. This mapping exercise was conducted in 2012 and involved profil- ing leading firms in Rwanda’s manufacturing and agribusiness sectors through one-on-one structured interviews with their senior management. The book contains 43 firm profiles that detail each company’s origins, products, systems and resources. Given the small size of Rwanda’s econ- omy, with only a handful of firms that qualify as large enterprises, this exercise provides a comprehensive assessment of the country’s industrial capabilities base. This book will provide the first ever comprehensive overview of firms in the manufacturing and agribusiness sectors. In doing this, we hope to provide academics and policy-makers with insights on the structure and existing capabilities of industrial firms, enabling them to design targeted interventions that are based on an understanding of the key constraints to industrial development in Rwanda. We also hope that this book will pro- vide inspiration to entrepreneurs and investors looking to start new firms, or expand existing ones, in the manufacturing and agribusiness sectors in Rwanda. June 2013 ACKNOWLEDGEMENTS The Laterite team would like to thank the 43 firms and their representa- tives for agreeing to be part of this study and for sitting through the in- terviews with our research team, often for hours on end.
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