AFP, 27 April 2006 - China's rapid expansion into Africa in search of fuel to feed its booming development needs is leaving a profound mark on the continent's economies, often in little noticed sectors.

And as Kenya hosts Chinese President Hu Jintao on his last stop in a three-nation African tour, the reverberations from Beijing's skyrocketing wealth and clout are being felt throughout society.

Along with a readily apparent insatiable appetite for oil, surging demand from China's growing middle class for cars is driving another, less visible, but perhaps equally important, craving: lead for automobile batteries.

Once content to sell their stocks of used batteries to local auto parts shops for recycling, in recent months Kenyan junk merchants have entered the international marketplace lured by the high prices offered by Chinese dealers.

As a result, the east African nation's informal scrap dealers are flush with newfound cash from the Orient while its automotive supply industry faces potential ruin.

"They buy the batteries at 15 to 18 shillings per kilo and the local guys only 11.5 shillings," says Steven Maina, a scrap dealer in Kibera, Nairobi's largest slum, and one of the beneficiaries of China's demand.

While the income boost may seem small, the equivalent of about nine US cents (seven euro cents) per kilo (2.2 pounds), Maina is taking in at least 40 dollars (30 euros) per week more than usual, a sharp boost in a country where
60 percent of the 33 million people live on less than a dollar a day.

"Business is doing well," he says with a smile in front of his small shop beside an open sewer as scrawny chickens flit about. Maina, who has now forsaken the Kenyan market for his wares, employs about six young men to troll Kibera's muddy alleys on bikes for old car batteries, often used by slum dwellers to power radios and televisions.

The fruits of their labor and that of many other similar entrepreneurs, flow to Robert Mwangi, a leading Kenyan used battery broker, and others like him who deal with faceless Chinese merchants half a world away.

"We've never met the guys, we talk through e-mail and they pay through bank transfers," he says, noting with approval the explosion in Chinese demand. "Batteries have become like hot cakes," Mwangi says, estimating that he alone exports about 100 tonnes a month to China. "Prices have hit the roof."

But while Maina and Mwangi revel in Chinese cash, the more conventional and established in Kenya's auto parts sector languish.

"We used to get old batteries from the local scrap dealers, like Steven and the others," says Michael Wanjala, recycling co-ordinator at Associated Battery Manufacturers (ABM), the leading car battery producer in east Africa.
"Today, there is a shortage," he says. "The lead is going to China."

Less than a year ago, ABM was recycling about 200 tonnes of used Kenyan car batteries a month at its foundary here in Athi River, about 30 kilometers (18 miles) southeast of Nairobi.

By March, that figure had plummeted to just 20 tonnes, according to ABM managing director John Kinyanjui, who fears that raising the price he offers scrap dealers for batteries will be met by higher Chinese bids.

"If it goes on, we may have to close down in a year's time," he said, lamenting the possible loss of jobs for the company's some 200 full-time employees.

ABM's foundry workers have already been hit by redundancies. "We have 45 casual workers per month, instead of 60," said smelter manager David Watoro. "They are the first affected."

In Kenya, Kinyanjui estimates that 400 to 450 jobs are directly at stake due to China's invasion of the battery business, with about 700 workers threatened in the East African Community (EAC) that comprises Kenya, Tanzania
and Uganda.

Another 3,000 jobs in EAC auto-related companies are also at risk, he says, maintaining that east Africa is just the latest untapped target of ruthless Chinese battery merchants.

"They killed the industry in Nigeria and Zambia, they want to do the same in Kenya," Kinyanjui warns.

To combat the threat, ABM and other Kenyan companies are seeking urgent EAC action to bar the export of used car batteries, arguing that their industry needs protection from outside forces.

Even as the Hu visit promises lucrative new trade and investment deals, the Kenyan government says it will respond to the concerns by raising the matter at a meeting of EAC trade experts next month in Tanzania.

It brushes off suggestions such a ban would violate World Trade Organization (WTO) rules.

"If somebody says it is against WTO regulations, we will respond that we consider this key for our industrialization," said Samuel Karanja, an economist and trade negotiator at Kenya's ministry of regional cooperation.

This article is reproduced with kind permission of Agence France-Presse (AFP)
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