Tuesday, May 21, 2024
BusinessSugar shortage pushes renowned food manufacturer cut production

Sugar shortage pushes renowned food manufacturer cut production

 – Had it been fully operating, it could have earned 1.9 billion birr yearly

Brothers Flour and Biscuit Factory is cutting its production capacity by 30 percent due to a shortage of raw materials, including sugar. The company’s production capacity has been on the decline since a year ago, when sugar was bought entirely from traders that sold the product for 9,000 birr per quintal before shifting to buying from the government for 4,000 birr per quintal.

The company uses 200 to 250 quintals of sugar per day to make biscuits. The chemicals and ingredients needed to make the biscuits are all imported, which demands a foreign currency outlay of up to USD nine million yearly, according to the company.

“Brothers Biscut needs USD nine million for the current budget year to satisfy the company’s demand, but they asked for it to be distributed at least in quarters, not all at once,” Ahmed Aliye, manager of the company, said.

The ingredients include cocoa powder, palm oil, milk powder, and 15 kinds of flavors imported from Turkey, Egypt, Spain, India, and China.

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The company used to source the foreign currency needed from any local banks promptly, but that has since changed after it faced a delay of over three months, resulting in cuts in production capacity.

The company submitted a request to the Minister of Industry and the National Bank of Ethiopia (NBE) through the Food Beverage and Pharmaceutical Industry Development Institute to get the USD they requested, according to Ahmed.

Brothers Flour and Biscuit Factory is one of 35 biscuit factories in Ethiopia, founded in 2000 by Mohammed Seid and his business partner, Ahmed Beshir. It produces wheat flour and eight varieties of biscuits for the local market.

The factory rests on 30,000 square meters in Adama city, employing 4,500 people. It is also distributed to six areas, such as Bahir Dar, Desse, Jimma, Harrer, Shashemene, and Addis Ababa.

The company’s annual production capacity stands at 30 to 40 tons of wheat flour and 25 to 30 tons of biscuits daily. This could have brought 1.9 billion birr earning for the company, but it has not been able to do so for years due to raw material shortages.

“Until now, the shortage of sugar and ingredients was dealt with other sources of income. But now we want the government to help,” Ahmed said.

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