The government has convened a meeting on September 1, 2025 to resolve a standoff between exporters and local packaging manufacturers over paper imports.
The dispute arose after duty relief was granted on some grades of packaging paper following complaints by exporters, a move local carton makers say is now undercutting domestic production.
Investment, Trade and Industry Cabinet Secretary (CS) Lee Kinyanjui announced this during a tour of Kibos Sugar and Allied Industries’ paper plant in Kisumu County saying it targets to strike a balance between exporters’ needs and the survival of local industries.
He said the meeting, will bring together exporters of tea, coffee, flowers, fresh produce and flour paper manufacturers to assess capacity and quality of all types of paper necessary for export business while ensuring local paper manufacturers are not driven out by imports.
The session, comes as the Finance Act 2025 imposes a 25 per cent excise duty or a per-kilogram charge on packaging inputs such as kraftliner and kraft paper, alongside a levy on imported cartons and boxes.
The Kenya Revenue Authority has already issued implementation notices for the same .Exporters argue that some grades, particularly virgin kraftliner, wet-strength and food-contact papers, are not reliably available locally.
They warn that higher packaging costs will push up export prices and weaken Kenya’s competitiveness in global markets.
Duty remission on specific paper types, they argue was the only way out to lower the costs of packaging.
Local millers and carton converters, however, say the duty relief has opened the door to cheap imports that threaten domestic orders just as they expand capacity.
They point to the revival of Rai Paper in Webuye and the growth of Kibos’ paper and packaging units in Kisumu as proof that local mills can meet demand.
The sector is further complicated by grade gaps. While domestic mills produce test liner, fluting and recycled paper, exporters insist certain specialist grades still have to be imported.
Kinyanjui who was accompanied by Principal Secretaries Dr. Juma Mukwana (Industry) and Regina Akoth (Trade) on a fact finding mission said the ministry’s role was to create a level playing ground for both sectors to thrive.
The CS also addressed sugar industry challenges, warning that cane shortages threatened mill operations and were likely to affect paper demand and broader regional industrial planning in the months ahead.
By Chris Mahandara
