Pwani oil starts selling it’s products in US dollars amid shortage
The Pwani Oil Outsourcing Company has decided to sell the product in US dollars while trying to get more shares in the currency that imports raw materials.
This comes just days after the manufacturer of leading brands of cooking oil Fresh Fri, Salit and Fry Mate announced the temporary closure of its factory due to what it says is a shortage of raw materials due to difficulty.
Pwani Oil said on Friday its banks were preparing only half of the dollar demand that it needs to pay Malaysian palm oil suppliers.
In a follow-up letter to customers, the manufacturer said he was making a payment option using US currency.
“We are facing a situation where we may lack the raw materials to provide you with the perfect products according to your needs. We humbly request you to give us a USD invoice and pay us in USD so that we can pay our suppliers and continue to bring our raw materials,” the letter read.
“We ask that your current and future debts be paid in US dollars. Of course, we will simplify this by giving you a USD invoice for the goods you purchased and we will continue to buy.”
Distributors were further instructed to use the Ksh 121 dollar per dollar, but the company noted that the rate would continue to fluctuate.
“However, we would like to assure our customers, employees, distributors, partners and other stakeholders that this is a temporary measure and that the business continues to work and our products are available in the sales areas,” added Coast Oil.
Announcing the closure of his factory on Friday, the Coast said the situation was further exacerbated by intense international competition and rising cost of raw materials under Indonesian restrictions on oil exports.
“We are competing for the same oil as the rest of the world and so the price is higher. Also, we cannot pay on time, so we have no priority in supply,” said Rajul Malde, Coastal Commercial Director.