Unga Group Limited, a company that specializes in the production and distribution of a wide variety of human nutrition, animal nutrition, and animal health products, has suffered from a lack of dollars and a significant depreciation of Kenyan shillings.
Based on its 11-month unaudited financial performance and June 2023 forecast, the company stated in a notification that it expects a loss. During the same period last year, the business turned a profit.
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“Scarcity of locally sourced raw materials led to increased importation at higher global prices. This led to increased production costs which could not be fully passed to consumers,” said the company’s secretary, Winnie Jumba.
“The difficult economic environment has been exacerbated by sharp depreciation of Kenya Shilling and shortage of US Dollars. These led to margin erosion, high forex losses and increased interest expenses,” she further said.
Earlier this week, the Central Bank of Kenya announced that the Kenyan Shilling will be trading at 140.2 against the US dollar.
A volatile shilling will increase the amount importers spend bringing in items as raw materials for factories, driving up the cost of inputs for businesses, which will then pass the higher costs on to consumers.
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