19 May 2018

Ethiopia: Edible Oil Producers Cook Up an Association

The new association, launched last Thursday has 100 members

Edible oil manufacturers established an association that was officially unveiled on May 17, 2018, at Ras Amba Hotel on Queen Elisabeth II Street. Close to 66 manufacturers were present at the event, while nearly 100 companies have signed on to the association.

A team of six were tasked with overseeing the organisation of the association, which is dubbed the Ethiopian Edible Oil Producers Manufacturing Industry Association. The team consisted of a representative from the Food, Beverage & Pharmaceutical Industry Development Institute, and the others were from the private manufacturers.

The organisation of the Association took almost two months, while the idea was conceived two years ago. Monitored by the Ministry of Industry (MoI), any edible oil manufacturing company, either Ethiopian or foreign, and with a legal license to produce edible oil in the country can be a member of the association, according to the draft regulation of the Association.

The draft for the Association's establishment will be sent to the Ministry for approval next week.

The association has its temporary headquarters in Addis Mojo Edible Oil Complex S.C, located in Nifas Silk, Lafto District of the capital. Addis Mojo's manager, Kalid Beshir, has also been named the first president of the infant Association.

Wudu Hassen Nuriye, owner and manager of Kibe Lemine, another edible oil producer, will serve as vice president. A chairman of the board that has seven members, including the president and vice-president, can serve a maximum of two two-year terms but has not yet been elected.

Import substitution of cooking oils and bringing the products of the manufacturers to the global market have been identified as the pertinent issues that the Association will focus on, according to its establishment document.

Shortage of raw-materials and lacklustre application of the edible oil fortification standard were also forwarded as challenges that have to be addressed at the discussion held during the unveiling of the Association.

"Addis Mojo will push for members of the Association to recognise the standard set for the production of edible in Ethiopia," Kalid told Fortune. "As a union, we will forward our concerns over the shortage of raw materials to the government jointly."

There have been associations for edible oil manufacturers before, but have been unsuccessful, such as the Addis Abeba Edible Oil Producers Association.

"Previous experiences do not give much confidence that the new nationwide Association will continue unshaken for years, but we have faith that it will help bring challenges in the industry to the forefront," Mekuria Gurji, owner of Mekurai Edible Oil Plc., who is also a member, said.

Mekuria and other edible oil producers based in Adama have their own local association, comprising of 50 members.

Ethiopia imports palm oil from countries such as Indonesia, Malaysia and Singapore to satisfy its edible oil consumption.

The government banned private companies from importing edible oil in 2011. As the shortage in the market prevailed though, the Ministry of Trade (MoT) allowed selected public and private companies such as Alle Bejimla, Hamaressa Edible Oil S.C. and Belayneh Kinde Import & Export to ship and distribute to the local market.

By 2016, 96pc of the nation's demand for edible oil was being fulfilled by imports, according to Habtamu Taye, Oil Seeds Processing director at the Institute. He stresses that the Association has come at the right time.

"Passivity is what made the previous associations unsuccessful," Habtamu said. "The new association will have the government's support when it comes to research and logistics."

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