Fortune News | Feb 01,2020
The Addis Abeba City Trade Bureau has designated six companies for the distribution of over three million litres of cooking oil from the Phibela Edible Oil Factory, a recently inaugurated plant in the town of Bure, Amhara Regional State.
A subsidiary of the Belayneh Kinde Group (BKG), Phibela has a daily production capacity of 1,500lt. The authorities believe it is a new entrant in the market that will help address the troubled edible oil supply and distribution business in Addis Abeba.
The distributors -Telsem Trading, ABTT Trading, Temesgen Kefyalew, New Trading, MCOFA Coffee Exporter, and NWG Trading - were selected by the Ministry of Trade & Industry. They will begin distributing the product to the 11 districts based on the quota allocation and price cap prepared by the City Trade Bureau.
Once the distributors deliver their quotas to the respective offices in the districts, the oil will be handed over to consumers associations, which will supply it to retailers.
Andnet Consumer Association is one of these cooperatives, which receives 54,000lts of semi-solid palm oil from the state at a subsidised price.
"Last month, we were only selling oil to kebele employees at the price of 350 Br for a five-litre bottle," Tewodros Eshetu, head of finance at the association, told Fortune. "Many people can't afford the liquid oil.”
Tewodros hopes oil from Phibela, deemed in better quality, would make a huge difference. Phibela offers its oil in bottles of varying sizes, with a five-litre bottle going for 232 Br.
"The distribution is scheduled to take place in the coming weeks, but we are facing problems in getting the oil from the factory," said Berhanu Tiruneh, general manager of ABTT trading.
Berhanu alleges that when his trucks went to Phibela to pick up the product, they were turned away.
Other distributors, however, have not reported facing a problem. Representatives from Phibela were not immediately available for comment.
The major source of the problem was that there were not many local plants producing edible oil, according to Akeberkegn Wegagen, deputy head of the Trade Bureau.
Phibela is among the 21 operational edible oil industries in the country that are producing 19.3 million litres a month using imported soybeans, sunflower and palm. On average, a person consumes 0.7lt of edible oil a month in Ethiopia, and the total demand in the country amounts to approximately 70.9 million litres. However, the overall supply sits somewhere around 47.7 million litres, satisfying only two-thirds of the demand.
Oil bottled locally can help regulate the flow of the distribution and save foreign currency for the country, according to Matiwos Ensermu (PhD), professor of logistics and supply chain management at Addis Abeba University. The increase in the number of distributors may be beneficial for edible oil to be distributed when needed, but local production alone is not sufficient to solve the problem of supply and distribution in Ethiopia, according to Matiwos.
"Technology should play a larger role in the distribution process," argued the expert.
He cited that introducing a digital tracking system would allow for better control and regulation of stocks and demand and make it easier to predict the future.
PUBLISHED ON
Apr 17,2021 [ VOL
22 , NO
1094]
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To the editors or to whom it may concern within Addis fortune news letter . Please proof read what you write! Especially the numbers, they don’t add up or they don’t make sense .21 factory’s producing 19.3 million liters /month. *12= 231 million liters /year . And then you say 70.9 million litres overall yearly demand. Ok but then you say overall supply sits around 47.7 million litres satisfying only 2/3 of the demand. How is it that you claim yearly production of about 230 million litres and yearly demand of 70.9 million and still shortage. When clearly it is over supply. Your numbers do not add up. Also finally you claim Phibela has a daily production capacity of 1500 lt? Again your numbers don’t make sense. 1500 litres of daily production capacity is really really small scale for oil production. I hope you get what I am trying to say . Regular reader
Thank you so much for your valuable feedback. We at AddisFortune try our best to provide our readers with well-researched and accurate information. You are certainly right in saying that 1,500 liters in daily production capacity is too little for Phibela Edible Oil Factory. The correct figure, in this case, should be 1.5 million liters; this was certainly an oversight on our part. Thanks for catching that and letting us know. In terms of the overall domestic demand and supply for edible oil, the figures provided are on a monthly basis and not annual, i.e. demand sits at 70.9 million liters a month and total supply (including domestic production) hovers at around 48 million liters a month. Hopefully, that clears things up. Thanks again for your feedback.