Several Kigali based businessmen have teamed up to set a logistics enterprise seeking to improve the importation and exportation of goods.
The group, which has set up a firm, Nine United Traders, is made up of 24 investors most who have had been involved in logistics in smaller capacities previously.
The firm has so far invested about Rwf6 billion to acquire 100 cargo trucks after securing a loan from Bank of Kigali to add on to their capital.
The cargo trucks will, among other things, be involved in cement trade (acquisition and importation), cargo transportation and general importation. The firm also has a clearing and forwarding agency.
The firm’s trucks will mostly be plying the Kigali-Dar es Salaam route.
50 trucks of cement were imported by nine traders in the first round. Photos by Dan Nsengiyumva
Andre Bitwayiki the Chairman of the firm told Business Times that they got into the sector to seize an opportunity created by large demand for goods in Kigali and inadequate logistics.
This, he said has often affected projects underway in Kigali in ways such as delays in project implementation or driving up the cost of projects.
He said that prior to their debut, the sector in Rwanda has been dominated by foreign players as well as few small fragmented operations which has done little to improve the efficiency of operations.
“We have invested in logistics as there is quite a demand in importation at the moment. Our investment was informed by challenges in logistics that affect project implementation,” he said.
The venture is projected to have a monthly turnover of about Rwf 300M when operating at capacity.
André Bitwayiki, chairman of Nine United Traders.
The firm is banking on the members’ experience in the logistics sector over the years in their small capacities.
Bitwayiki said that operations in the sector have been eased by the establishment of the one stop border posts as well as pre-clearance procedures which cut on the transit time.
He, however, called for an intervention in the cost of insurance which he said was too high especially for logistics operators in the local market.
The investors also cited a challenge in the state of a road they often used in Tanzania, a stretch of about 80 Kilometres which they say often leads to accidents.
Stephen Ruzibiza, the Chief Executive of the Private Sector Federation, welcomed the synergy saying that it could serve addressing long-standing challenges in logistics. He said that, over the years, the operations of small players often lacked bargaining capacity in terms of capital and management.
With Rwanda having multiple development projects, he said that there is a demand of importation of capital goods. The challenges of logistics he said have often driven up the cost of goods.
For instance, a bag of cement is often priced at around Rwf9300 to Rwf10, 000, however, with adequate supply, the cement priced decrease up to Rwf 8400.
The investors challenged local exporters to take advantage of the logistics services noting that often, trucks to Dar es Salaam to collect goods often go empty due to lack of exports.