Chinese Investor In Trouble For Operating Retail Shops In Arua
Chinese Investor, Ming looks on during the meeting convened by Arua spare motors association leaders on Tuesday. Photo Credit_ Andrew Cohen Amvesi
ARUA. The boss of Kevla, a Chinese company dealing in motor spare parts, was on Tuesday, August 27, 2024, summoned by the leadership of Arua spare motors association for violating the rules governing investors in the country.
This is after it was noticed that one of the Kevla bosses only identified as Ming was operating two retail motorcycle and tricycle spare part shops in Arua city yet the same company is supplying over 80 traders affiliated to Arua spare motors association.
The traders argued that the decision taken by the supplier to open shops on Adumi and Hospital roads in Arua city is aimed at pushing them out of business.
“As you are aware, Kevla company has recently established two direct sales shops in Arua city which are directly competing with our members who have been supplied by Kevla company,” said George Andama, the Arua spare motors association chairperson.
Andama added that: “Our members are crying because you have your own factory where you get your spares from. It is therefore unfair for you to come and start competing with them directly as a retailer. First of all, you will be selling your products cheaply and by doing so, you are in a way pushing these local traders out of business. So, we believe it is essential to discuss the implication of this development and find a mutually beneficial solution.”
Benjamin Econi, the Association’s General Secretary, said they can’t ignore the impact of Kevla’s direct sales on their members’ businesses.
“Our members have invested heavily in purchasing products from Kevla company and this new development threatens their livelihood. We request that Kevla company considers its decision to operate direct retail shops in Arua city. Instead, we propose that the Kevla company remains in Kampala, continuing to supply products to our members through the existing supply chain,” Econi appealed.
He noted that this approach will avoid direct sales competition and ensure a healthy business environment for all parties involved.
Similarly, Usher Agupimamvayo, the director of Abba Moto Spares in Arua city, said they were surprised to see that a company like Kevla which has a factory is coming from Kampala to compete with them directly.
“By this investor’s involvement in retail business in some small places like Arua, we know our future is already doomed. We will not be able to pay for our children in school, we will not be able to cure diseases in the form of treatment and we will be rendered completely useless. So, which means we have failed to know the purpose of investors in our country,” Agupimamvayo said.
He observed that if Kevla company continues with the retail operation in the city, the local traders in Arua will not be able to pay income tax, license and their workers because they would have been pushed out of business.
During the meeting Robbins Asite, the Director of AMGS Motor companies suggested that the retail shops being opened by Kevla company in Arua city should remain closed until the matter is resolved in the coming subsequent sittings.
In his remarks, Ming said their main motive of opening shops in Arua city is to promote the sale of tri-cycles but not spare parts.
“In Arua we have shops but the shops are not for spares. The spares are for servicing our tri-cycles,” Ming stated.
Richard Wani, the Kevla Sales Manager for Northern Uganda, equally said the coming of Kevla wasn’t intended to spoil business for the local traders in Arua but to expand the tri-cycle business across the country.
He, however, promised to take the concerns raised by the aggrieved traders in Arua to Kevla company bosses in Kampala for further guidance on the next move.
Jimmy Madira, the Chairperson Legal Committee of Arua City Chamber of Commerce and Industry, urged the two parties to establish a proper framework in order to build a strong partnership.
Madira advised that the investment law mandates all investors who come to Uganda to follow the local laws of the country and abide by the regulations so as to execute their duties under the given license.
When contacted, Cornelius Jobile, the Arua City Deputy Clerk, expressed ignorance over the matter, saying the aggrieved traders have not yet notified the city authority about the retail operations of the Chinese investor in the city.
“We are not aware of this issue. I’m just hearing this from you for the first time, maybe they informed the chamber of commerce. Until they formally notify us, we can’t comment on this matter,” Jobile said on phone.
Currently, the members of Arua spare motors association have withheld payment for the recent supply of Kevla spares until their concern is addressed.
Surely Investors should only be given wholesale license not retail, no need for opening branches, for this case Kevla, found companies like Dura motors, Simba automotive whose Head offices together with warehouses are only situated in the city center to give room for other traders to benefit from the business line. In fact governing laws and regulations should be strictly enforce this will high impact penalty for offenders. Investors come and leave no space for the local people to make money i.e manufacturer, distributor, wholesaler and retailer now where will locals tap in to the supply chain. Already tax holidays, exemptions etc are accorded to investors.