Coffee Machines Brew Money for Local Technicians



Dereje Birhanu, who does maintenance work on coffee machines, rented and installed the two-piston coffee machine pictured above for a small café owner near the Gottera overpass. He is seen above installing the machine at the cafe.

Dereje Berhanu was maintaining a coffee machine on Thursday afternoon, January 17, 2013. He had rented this machine to Zebib Aleneh, for 700 Br a month, for a small café she is opening near the Gotera overpass, along the Ethio-China road.

He has been maintaining these machines, as his livelihood, for the past five years, beginning just two months after he learned the skills from a friend who owned a manual coffee machine. Last year he also got a diploma in electronics, from theTegbareidTVETCollege, after which he started performing maintenance work on refrigerators and air conditioners too.

When Dereje began offering his services to cafés, he used to move from place to place, working on at least two machines a day.

“I had no workshop or capital when I started the business,” said Dereje, who currently owns a small company, Kidus General Electrical Service, near Saris Abo.

Over time, he has become a familiar face to many coffee machine owners and he even has clients from as far away as Dukem, 37Km south of Addis Abeba. Each customer calls on his services at least once every eight months, for a total service, or at any other time, if their machines break down.

Dereje now buys machines from cafes that go bankrupt and rents them to new cafes, like Zebib’s, that would rather not spend their meager resources on buying a machine of their own.

He charges 250 Br for the simplest maintenance services and 1100 Br for a total service of a coffee machine. He rents locally modified two-piston coffee machines for 400 Br and the imported ones for 700 Br a month. He receives upfront payment for three months rent, in advance.

“Renting the machines is profitable,” said Dereje.

He also receives machines from owners and resells them for a 10pc commission.

“The locally assembled machines produce lighter coffee than the imported ones,” says Dereje.

Currently, Dereje owns six machines and the cafes give them back to him within a year and a half, maximum, if they survive in the business, according to Dereje.

He rents the machines after testing them first and only takes them back after completely servicing them, at the expense of the clients.

The machines are mostly imported fromItaly, and some fromSpain, which increases their rental price. In addition, the number of pistons on the machine, and the quality of the tanker and capacity are factors that are considered when setting a price.

There are assemblers, in Addis Abeba, making “new” coffee machines, after taking parts from old machines and using locally molded metal sheets for the body and water tanker. They carry the same brand name as the imported ones, but are much cheaper. Machines with one and two pistons are locally assembled, but not those with three or four, according to Dereje.

Some assemblers, around Stadium, also produce coffee machines with one or two pistons, with up to a 92pc similarity to the imported versions. The only part of the machine the assemblers cannot make is the outlet, which they take from older machines, or buy separately.

Coffee machines with three or four pistons are not locally assembled.

Primarily divided into manual and automatic, the machines have different models, with tanker capacities of up to 12 litres, and with one to four pistons – a barista can fill as many cups as there are pistons. The automatic ones are electrical.

“Most small scale cafes rent the manual coffee machines with two pistons,” says Dereje.

The price of a new imported two piston coffee machine is 75,000 Br; the same machine, second hand, costs 38,000 Br, at Merkato. On the other hand, a locally assembled and used machine was selling for 15,000 Br, around Stadium, on Thursday. The price for a new four-piston machine is 110,000 Br, up from 70,000 Br just five years ago.

“Using the automatic machine, I do not want to lose my business when the electricity goes out,” said Zebib, who is unsure of the longevity of her business and discarded her original plans to buy the machine using a loan.

She adds that people are largely turning away from machine made coffee, in favour of traditionally brewed coffee.

“I also do not want to buy the machine because it will use up my working capital, which is already tied up by the rent for the café,” she added.

She has already paid rent for the coming six months; 72,000 Br, for the four by four room, with small kitchen, where she has set up her café.

“Most café owners I know gave up their business because of house rent. In the end they sell their machines or give them to me to rent them to others,” Dereje said.

Café owners that Fortune talked to complain that rent is continually increasing.

“Cafés just sprout out every night throughout the city and the coffee machines are in high demand,” said a renter of coffee machinees, who declined to be identified. He rents 32 machines.

Dereje, too, is planning to expand his business by beginning the assembly of machines at his workshop, in the near future.



By ASHENAFE ENDALE
SPECIAL TO FORTUNE.

Published on Jan 20, 2013 [ Vol 13 ,No 664]


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