Radar | May 16,2020
A local company, Ed Stelar Foods Plc, is warming up to start exporting semi-processed meat products, particularly burger patties and meatballs, to Somaliland, Djibouti and the United Arab Emirates.
The company produces a range of processed beef and chicken products and targets to export 70pc of its total production while supplying the remainder to the domestic market. It plans to secure around seven million dollars from exports in a year and double the amount within five years.
Ed Stelar was founded in 2014 with 400 million Br capital as a joint venture between an Ethiopian entrepreneur, Eshetu Belay, and Dutch investor Hans Wasmoeth, who has previous experience in the "ready to eat" food processing industry.
The company currently employs 200 people and produces 59,000 food items a day at its plant, which sits on 5,000sqm of land in Sendafa, 35Km north of the capital. It is currently producing at just a fifth of its capacity.
"We started the business after observing how busy restaurants and burger joints are," said Eshetu, CEO of Ed Stelar Foods Plc and Ed Stelar Broadcasting Plc, which is also known as Ahadu TV & Radio.
"There is demand for semi-processed meat from the diaspora and expats, who usually bring such products back with them when they go abroad," he said. The company supplies mostly restaurant chains, supermarkets and hotels. A pack of six Ed Stelar beef patties goes for 380 Br in the local market.
The company has signed agreements to provide processed meat to international franchises, according to Eshetu. It plans to begin exporting in the coming few months.
"We're working on getting international certifications," he told Fortune. One of these is the Global Food Safety Initiative (GFSI), which sets standards for management and safety systems in food processing industries. The company is currently sourcing its livestock from seven farmers' cooperatives in Sendafa and Luna Export Slaughterhouse Plc, which owns the thriving Fresh Corner franchise.
There are currently 15 companies engaged in the export of processed meat products in Ethiopia, according to the Meat & Dairy Development Industry Development Institute. These companies generated 82 million dollars in export revenue last year.
One of them is Prime Meat, which was acquired from the former Ethiopian Privatisation Agency for 11.2 million Br in 2007. It was then known as Debre Zeit Swine Farm and was sold off due to challenges in the market as the vast majority of the Ethiopian demographic does not consume pork products.
Kassahun Aberu (PhD), CEO of Prime Meat, shares Eshetu's thoughts on the high demand for processed meat products among the diaspora, citing that some used to pay as much as 8,000 Br for one kilogramme of pork. The company currently employs over 200 people and processes two tonnes of meat a day. Mainly supplying restaurants and hotels such as the Sheraton Addis and Radisson Blu, Prime also caters to Salini Construction, the head contractor for the Grand Ethiopian Renaissance Dam (GERD).
Prime has also ventured into export, selling beef jerky and other beef products to markets abroad for as much as 19.5 dollars a kilogramme.
"The main challenges in this industry are the supply of livestock and price escalation of fodder," said Kassahun. With the aim of easing some of these issues, Ed Stelar has been working with cooperatives on a backwards integration project on its part, with the aim of improving the quality and quantity of livestock they supply. But this initiative has been curtailed by the COVID-19 pandemic.
Samuel Assefa (PhD), an expert in the livestock industry for over two decades and currently working as a freelance consultant, is of the opinion that a lack of government attention to livestock, as evidenced by not allocating land for ranching, is preventing the country from maximising its potential.
"The issues faced by such value-adding plants can be attributed to the underdeveloped ranching sector in Ethiopia," said Samuel, citing that proper investment can double the country's income from meat export ventures. He recommends that a separate ministry be instituted to govern and regulate the livestock industry, citing that the current structure under the Ministry of Agriculture is inefficient.
PUBLISHED ON Jul 24,2021 [ VOL 22 , NO 1108]
Radar | May 16,2020
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