In a franchise arrangement, an Ethiopian businessperson and a Belgian firm are setting up a chemical manufacturing plant in Debre Berhan, Amhara Regional State, to supply the food and beverage industry.
Formed after the merger of Ayalew Addis and Sopura NV Belgium, the new venture will operate as BeligoEth Plc, and will invest 100 million Br in the construction and outfitting of the plant. The project will occupy 30,000sqm in Chacha Kebele, one of the 16 kebeles of Angolelana Tara wereda, located 110Km north of Addis Abeba. The company secured the land through the investment office of the regional state after a 1.6 million Br compensation payment to six farmers.
The plant, to be constructed in two phases, will produce chemicals used by food processing companies, water bottlers, breweries, dairy farms and flower farms. The first phase will cost 40 million Br and will employ a total of 30 employees.
The factory requires a small labour force as it will be semi-automated, according to Ayalew.
BeligoEth, which is expected to be operational after a year and a half, will have a production capacity of 1,300tn of chemicals a year. Phase two will raise the factory’s production capacity to 1,600tn to between 1,800tn a year.
In the first phase, the factory will process chemicals for food and beverages, and phase two will enable the factory to process chemicals for the dairy industry and disinfectants for hospitals and clinics.
Geretta Consulting Architects & Engineers, a local company that designed the buildings of Marathon Motor Assembly Plant, Haile Resorts in Hawasa, Arbaminch and Ziway and United Insurance’s head office prepared the architectural design of the new plant.
“The design was sent to our European partners for review,” Ayalew told Fortune. “We will be floating a tender next month to hire a construction company.”
Ethiopia will be the third African destination for Sopura, a company established in 1946 that provides chemicals for cleaning and sanitation in the food and beverage industry and for water treatment plants. Apart from Ethiopia, the company has invested in Algeria and South Africa and has 19 subsidiaries across the world.
Ayalew, who founded Eureka Industrial Supplies two decades ago, has been importing cleaning and sanitisation chemicals for the beverage and food factories. Before opening his trading company Eureka, Ayalew, a chemist by profession, has worked at different breweries.
Upon being fully operational in three years, the company plans to substitute its own products for imports and export its products to other East African countries, according to Ayalew.
On a yearly basis, Ethiopia spends three Billion Birr to import chemicals used for different industries and purposes. These chemicals are imported by 465 companies engaged in importing, wholesaling and retailing chemical supplies.
There are also an additional 14 companies, which produce chemical products locally. Seven breweries and over 70 water bottling companies consume much of the chemicals.
The company chose Debre Berhan for the investment after considering the weather of Chacha wereda, one of the 24 rural weredasin North Shoa, according to Ayalew. Chacha has around 100 investors who have taken land and started developing the area.
“The chemicals and the products need to be stored at a cold temperature,” Ayalew said.
The area is getting more investment these days, according to Tadele Minda, the director of the wereda’sland use and management office.
“Besides, the area is preferable for agro-processing, Tadele told Fortune.
Experts commend the establishment of a company that will produce chemical products locally. Yet fears remain that the company will face stiff competition from hundreds of chemical importers.
“The chemical industry is at its infant stage,” said Beteley Tekola (PhD), who has been working as a consultant and academic in chemical engineering for a decade. “Therefore, investors should get support from the government.”
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