Enterprise Backs Industry Battling Input Shortage

Three food processors that have been challenged by shortages of raw materials due to the Novel Coronavirus (COVID-19) pandemic have received supplies worth 221 million Br from a state-run agency.

Sororo General Trading, Bruk Abebe Tafese Flour Factory and Teshome Shiferaw Food Complex are the three plants that received agro-processing raw materials from the Ethiopian Industrial Inputs Development Enterprise. The companies received wheat, soya beans and cottonseed oil.

Sororo General Trading, which owns Kiya Food Complex, received 102 million Br worth of wheat. Bruk Abebe Tafese Flour Factory has taken 30,000 quintals of wheat and soya beans, each worth 92 million Br. The Enterprise also provided Teshome Shiferaw Food Complex with cottonseed oil worth 26 million Br.

The supplies were sourced from the local market, according to Dejenu Teklemariyam, deputy chief executive officer at the Enterprise in charge of sales.

The Enterprise, which was established to supply industrial inputs to companies, operates with two models. In the first scheme, business-to-business, buyers negotiate with the suppliers and ask the Enterprise to fund the procurement with a six-month loan arrangement. In the second scheme, industries can purchase raw materials directly from the Enterprise's store.

The three companies used the business-to-business model, submitting their documents underlining the type, quality, amount, and other information about the inputs they want to procure. They also produced documents such as unconditional bank guarantees and audited financial statements. Then the Enterprise covered the costs for the three factories and procured the agro-processing inputs themselves.

“We're availing agro-processing inputs for food manufacturing enterprises to ensure the supply of food products and market stability during the pandemic," Dejenu told Fortune.

The Enterprise is also devising a strategy to supply agro-processing inputs because of the pandemic’s disruption of the food supply chain, to avoid input shortages and to stabilise the market by making enough food supplies available, according to Dejenu.

“We're in the process of procuring more agro-processing and other essential inputs for the manufacturing enterprises," he said.

Established a decade ago, Sororo General Trading, which owns the Kiya Food Complex and Sororo Tour & Travel, was supplied with 66,000 quintals of wheat.