NF Plastic, a subsidiary of Sunshine Group, has undergone an expansion with 17 million Br in investment equipment lease financed by the Development Bank of Ethiopia.
The construction of the factory, which is located in Gelan, in Oromia Regional State just south of Addis Abeba, is being carried out by Nf’s sister company Sunshine Construction. The parent company, Sunshine Investment Group, was established over three decades ago and is engaged in construction, hotel development, real estate and other businesses.
“We established the company to fill the supply gap of sheets of plastic product for the laundry business,” said Nebiyu Samuel, CEO of the company.
NF was established two years ago and used to produce coat hangers for Sunshine Laundry, one of the sister companies in the group. The company once produced 300,000 coat hangers annually.
Sitting on 3,500sqm of land, the construction is expected to be finalised at the end of this year.
“We are importing five sets of machinery from China,” Nebiyu told Fortune. “The machines will boost the productivity and diversify the products of the factory.”
The five machines include a plastic crusher, injection, film blowing and conduit machines. The machines have a capacity of producing an average of 200kg of plastic an hour.
The machines cost the company 17 million Br. The Development Bank financed 82pc of the purchase price as equipment lease.
It took two years to get the equipment financing loan from the policy bank and to procure the machines, according to Nebiyu. He cited government bureaucracy for the long delay in procurement.
The company will use recycled plastics as an input for the products. The machines have the capacity of crushing 250kg of plastic an hour.
“We are targeting paint factories as our potential customers,” Nebiyu says. “There is a huge gap in the supply of paint cans.”
According to the NF’s feasibility study submitted to the Development Bank, the paint factories spend nearly 24 million dollars annualy on importing paint cans.
NF targeted 38 paint factories to produce paint containers in four and 16-litre bottles.
After the completion of the expansion, the factory will create an employment opportunity for 85 professionals.
The company plans to commence production at the beginning of next year.
“We will supply 75pc of our production to the local market,” Nebiyu told Fortune. “We will export the rest.”
Experts commend the use of the recycled plastics as raw material.
“As plastics are unfriendly for the environment, recycling and the reusing of plastic waste products have multiple advantages,” says Himanot Dessalegne, an expert with over two decades of experience in environmental protection.
The Ethiopian plastics industry is growing at a fast pace, according to the country cluster of Euro map studies. Raw materials are imported mainly from the Middle East, Europe and Asia.
In the past decade imports of plastic raw materials increased by 19.4pc annually from 43,000tn. The consumption per capita also surged by 13.7pc from 0.6kg in 2007 to 2.4Kg in 2017 and is estimated to grow to 3.2Kg in 2020.
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