8 February 2016

Ethiopia: Abergelle's Meat Find New Destination

Comoros Islands as new destination for Ethiopian meat will be a game changer to the sector

Abergelle International Livestock Plc, an abattoir in the Tigray Region owned by the Endowment Fund for the Rehabilitation of Tigray (EFFORT), is to export 280tn of meat to the Comoros Islands.

"Ten shipments of 28tn each will now be sent to the Comoros Islands over a period of three months, at which time the agreement will be up for revision," said Gebremedhin Abraha, manager of Abergelle.

Situated in Meqelle, the company sources its livestock from around Tigray, Somali and Afar regions. In an interview one month ago, Amanuel Gidey, marketing head at Abergelle had told Fortune that traditional rearing practices were ruining the quality of meat and that the abattoir had not been able to operate for two years because of that.

Abergelle resumed business last July, changing their product from cattle (beef) to goat and sheep meat (mutton), of which they have since been able to export eight tonnes a week. They have come full circle though, it seems, as their deal with the Comorians will have them producing beef yet again.

Ministry of Industry data from last year indicate that Ethiopia was exporting 52tn of meat, about one cargo flight, daily from 10 export abattoirs, eight of which have domestic owners.

The destinations were, however, limited to two Middle Eastern countries - the United Arab Emirates (UAE) and the Kingdom of Saudi Arabia, which take 97pc of the country's total meat exports. The remaining three per cent goes to 12 other countries, with Comoros joining the list as a 13th destination. The amount of meat that Comoros will receive in the next three months is the equivalent of what was exported to the 12 destinations in six months last year.

Abergelle's manager said that competition from a new market for Ethiopia's meat could decrease the demands from old buyers for more privileges, lower prices, and supply by credit.

Abergelle will be exporting frozen meat to Comoros, unlike all other destinations, which receive fresh meat. For Abegelle this meant overnight carriage of its shipment from Meqelle to Addis Abeba, from where it was transported via Bole International Airport.

Frozen meat will now be taken to the Port of Djibouti from where it will be carried on vessels to Comoros.

"The [frozen] meat can stay up to two years without going bad, and we can now send our products by sea," Gebremedhin said, adding that transporting the meat by sea would reduce the transportation cost to 6,000 dollars. This is significant savings compared to the 28,000 dollars the company would have to pay for air transport.

The manager disclosed that the abattoir had bought 400 heads of livestock to meet the first shipment of 28tn. He said that the process entailed keeping the animals over a period of 21 to 30 days for medical and nutritional care before slaughter. The abattoir would complete the slaughtering in four days, after which the cuts of beef would be preserved in a freezer which he said the company had acquired for 25 million Br.

Comoros is paying less for the beef than Middle Eastern countries are paying for mutton, Gebremedhin said, but he did not give any figures. The Ethiopian Meat Producers & Exporters Association (EMPEA), composed of all exporting abattoirs operating in Ethiopia, set a floor price of 5,000 dollars a tonne last December, claiming frustrat due to buyers who negotiated prices that tested the limits of profitability. However, an exception was made for Gebremedhin's company to sell for as low as 4,800 dollars a tonne in order to attract a larger market, the reason being that it had been unable to produce for 10 months.

The dependence of the exporters on limited markets leaves them vulnerable. When the UAE suspended Ethiopian meat imports for just 10 days a year ago, some exporters, such as Halal Food Industries Plc, were forced to sell their meat cheaply on the local market.

Abergelle is currently sourcing its livestock from seven weredas in Tigray, Afar, and Amhara regions, which the government has indicated as more vulnerable to the effects of the drought, Gebremedhin told Fortune by phone from Meqelle. Abergelle is offering farmers last year's prices, he said, which are fairer compared to current prices.

The company says it has so far exported to Dubai sheep and goat meat from 30,000 heads of livestock acquired from those regions at last year's prices. The animals were rehabilitated before the slaughter.

Abergelle has also provided cattle feed to farmers, according to the general manager, using a 60 million Br grant from the Endowment Fund for the Rehabilitation of Tigray (EFFORT), to prevent cattle deaths and falling prices of livestock.

The abattoir has been the beneficiary of technical and financial help from USAID contractor, Cultivating New Frontier in Agriculture (CNFA).

"We helped Abergelle find not just contractors it can sell to," said Marc Steen, chief of party for the CNFA, "but also farmers and farmers' cooperatives they can source from."

Abergelle is using 100,000 dollar grant from USAID and 200,000 dollars from EFFORT to upgrade its facilities and prepare for ISO participation. Progress to date includes upgrading the various ranches under the abattoir, staff training and improved standards of hygiene and sanitation. The abattoir also participated in five international exhibitions as a result.

Subsequent to the 10-month halt in production, the company is now working seven days a week at 50pc to 60pc of total capacity, Steen said, explaining why the USAID chose to support it.

USAID's involvement is part of its Feed the Future initiative, with which the organisation aims to improve both agricultural productivity as well as the lives of smallholder farmers. The initiative is currently working in four states, Amhara, Oromia, Tigray, and the SNNPR with six abattoirs.

In the last fiscal year, the shipment of 19,478tn of meat has secured foreign exchange to the value of 93 million dollars for Ethiopia. In the first four months of this fiscal year, 33 million dollars worth of exports had been sent. Sixty one per cent went to the UAE and 36pc to Saudi Arabia.


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