May 2 , 2020

A local food processing firm has constructed a flour and biscuit processing plant in Debre Sina town, 145Km north of the capital, with a total investment of 210 million Br.

Vita Hydro Agro-Processing Plc, a sister company of Belayab Food Production Plc owned by three foreigners and two local business people, invested in the plant, which rests on two hectares of land. The factory has the capacity to process between 42tn to 60tn of flour a day and between 1.5tn and two tonnes of biscuits an hour. The company leased the land from Tarmaber Wereda's land administration office and got a business license from the Ethiopian Investment Commission.

Vita Hydro will be joining the more than 45 companies registered by the Food Beverage & Pharmaceutical Industry Development Institute to produce biscuits from wheat and other cereals. The country has an estimated production capacity of over 2.5 million quintals of biscuits a year.

There is a biscuit and flour manufacturing gap in the country, and this company is primarily dedicated to bridging this and making the products accessible to the local market, according to Fikru Hailemariam, general manager of the plant.

The domestic production of biscuits in the last fiscal year reached an estimated 193,773tn, according to data from the Central Statistical Agency's report, titled "Large & Medium Scale Manufacturing & Electricity Industries."

In addition to domestic production, biscuits are also imported from various parts of the world. In the last fiscal year, the nation imported 1,762tn of biscuits, according to the Ministry of Revenues.

Under construction for the past three years, the factory was built by Yosef & Friends Plc under the supervision of JDAW Consulting & Engineering Plc. The plant is expected to offer job opportunities to between 150 and 200 people.

The biscuit plant applied for a loan from the Development Bank of Ethiopia (DBE) to import and install its machines a month ago and will be fully operational within four months after the loan is approved, according to Aschalew Belay, a co-founder and owner of several establishments including Golden Tulip Hotel, Belayab Foods, Belayab Motors, Belayab Cables and Hua Jia International Trade Company along with Vita Hydro.

Vita Hydro is the first manufacturer to venture into Tarmaber Wereda and will source wheat from local farmers who work around the factory to make the biscuits. The by-product from the wheat will be used for poultry and livestock production, according to Fikru.

“Currently, our primary target is local customers, but we will export as soon as we increase our production capacity,” said Fikru.

Most manufacturers will be on and off due to resource and power constraints, which force them to exit the market, according to Daniel Girma, director of cereals & pulse processing industry development at the Institute.

The nation is importing 655,000ql of wheat a month to meet the demand in the country.

Hailemariam Kebede (PhD), a marketing expert and a lecturer at Addis Abeba University’s School of Commerce, appreciates the establishment of the factory in the area.

"It’s nice having a plant that aims to provide its products to the local market rather than exporting them," according to Hailemariam, who advises the owners to find and fill the gap between the type and quality of imported biscuits and local products before starting production.

“Electric power and the raw material shortage is a challenge for all factories," he said. "It needs to be worked on by the government and other concerned bodies."

To achieve consistent production, these kinds of manufacturers should have a constant and robust supply chain, and they need to come up with different ways to attract the market, Hailemariam recommended.

PUBLISHED ON May 02,2020 [ VOL 21 , NO 1044]

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