Ethiopia: Midroc's Industrial-Scale Bakery Reaches Final Stage

Sheger Bread & Flour Factory, an industrial-scale bakery built by MIDROC's Horizon Plantations Plc, is set to start baking bread this week.

Built for 900 million Br within a 10-month period, the state-of-the-art bakery has the capacity to make 1.6 million loaves of bread a day and 80,000 an hour.

Horizon Plantations, a specialised arm of the MIDROC conglomerate, laid the cornerstone of the bakery on June 6, 2019, in the presence of Takele Uma, deputy mayor of the city. The construction began on August 11, 2019, and the workers have been working 12 to 14 hours a day.

The bakery, which uses automated machinery, will source flour from a plant that was built next to the bakery. Resting on 4.1ha, the bakery and the flour processing plant is located in Akaki Qality District. Horizon Plantations imported the machinery for the bread and flour from Italy, while the transformers were shipped in from China.

The bakery has four silos each with a storage capacity of 30,000ql of wheat, 12 ovens, 13 mixers, and two cooling towers capable of cooling 140,000 loaves of bread a minute. It has 357 permanent employees, 50 janitors, 47 chauffeurs and 23 food vans each capable of carrying 24,000 loaves of bread at once.

The flour factory can produce 2,224ql of flour a day, from which the bakery uses 1,200ql, and the excess 1,024ql of flour will go to the market, according to Abennet Gebremeskel, CEO of the project management office and general manager at MIDROC Construction Ethiopia.

The flour factory will source its wheat supply from Horizon Plantation's farm and other cooperative unions, as well as through import, according to Sisay Debebe, project manager of the Sheger Bread & Flour Factory.

The project was initiated by the Deputy Mayor, according to Feven Teshome, press secretary of the Addis Abeba City Administration Mayor's Office.

"Sheikh Mohammed Ali Al-Amoudi gladly accepted the proposal to realise the project," Feven said. "The factory will alleviate the inflation in food prices and the shortage of bread in the capital."

The factory was initially expected to be finished in four to six months, but it took 10 months thanks to delays in machinery installation, according to Abennet.

The machinery installation experts could not come to Ethiopia because of the COVID-19 pandemic, and the installation was undertaken by a number of professionals who were already in the country being directed by the foreign experts through Zoom video calls, according to Abennet.

"We were able to get foreign currency from Sheik Ali Al-Alamoudi, and it was very vital to the speedy completion of the project," Abennet told Fortune.

The Addis Abeba City Administration and the bakery agreed to sell the products at reasonable prices, according to Feven, who adds that a 100g loaf of bread will be sold to consumers for 0.75 Br.

However, Sisay disputed this, saying that the company did not reach an agreement with the administration to supply consumers for the stated value.

"We've yet to decide the price, but we'll supply consumers at a fair and affordable price," he said. "However, our bread will be priced far more affordably."

The company has procured 150,000ql of wheat from Ukraine that will be used for three months of production. The first of six batches of the supply has reached the factory.

The plant consumes five megawatts of power during peak hours, according to Abraham Alemu, electrical engineer of the Factory.

"It has three stand-alone generators that produce 3.2MW in total," he said.

Horizon is also constructing a tea processing plant inside the premises of the bakery plant with an investment of 200 million Br. The plant is expected to be completed in six months.

Upon beginning operations, 20,000 people will be employed, according to Feven.

The Factory has so far prepared 23 food vans to distribute the bread to 10 districts throughout the capital. Unemployed youth are organised by the City's Job Creation & Enterprise Development Bureau across 116 weredas.

"We've already organised youth and 420 repaired and refurnished Anbessa buses as movable food vans to distribute the bread in 116 weredasacross the capital," said Feven.

The project is significant to consumers since it will drag the price of bread down and improve the quality of the bread in the market, according to Atlaw Alemu (PhD), assistant professor of economics at Addis Abeba University.

Atlaw believes that the bread factory will have good implications for small-scale bakeries.

"It'll affect small-scale bakeries favourably, because market competition will make them strive for efficiency," he said. "The factory will be profitable through the economy of scale. There is sufficient demand for the product."

The project will reduce the supply side problem that is chronic to the country's economy, and it will create stable food prices, according to Hailemariam Kebede (PhD), an assistant professor of marketing management at the School of Commerce, Addis Abeba University.

"It'll play a crucial role in bringing healthy market competition to the sector," he said.

However, Hailemariam is sceptical of the Factory's persistence in the market due to input supply shortages. He recommends the management of the bakery work on its value chain.

The City Administration is working to control food price inflation, and the Sheger Bakery is among the projects that the Mayor's Office initiated, according to Feven.

MIDROC Ethiopia is also building a four-billion-Br edible oil factory in the Summit area of the capital.

In the last fiscal year, the country harvested 48.3 million quintals of wheat from nearly 1.8 million hectares of land. It also imported 1.7 million tonnes of wheat for 11.1 billion Br. Out of domestic wheat, meanwhile, 58pc was utilised for household consumption, 19.6pc for seed requirements, and 20.1pc was sold for domestic market uses.

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