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BusinessNew rules worsen industrial salt debacle, threaten brewers, tanneries

New rules worsen industrial salt debacle, threaten brewers, tanneries

Trade state minister deposed after endorsing the contentious rules

Confusion surrounding federal restrictions on the supply of crucial unprocessed salt to manufacturing industries has dried up stocks at breweries and tanneries, while tens of thousands of quintals of salt sit stranded in the Afar Regional State.

A recent letter from the Ministry of Trade and Regional Integration to the Customs Commission and Food and Drugs Administration compels the treatment of raw salt with chemicals like naphthalene to distinguish it from regular or table salt intended for consumption. Naphthalene imparts a distinguishable odor on the salt.

The letter, signed by Teshale Belihu, state minister for Trade Licensing and Systems at the Ministry of Trade and Regional Integration, also orders a freeze on the transportation of any untreated salt to manufacturers. Teshale is removed from his position last week by Prime Minister Abiy Ahmed (PhD), just a week after he passed the orders on the salt market.

 “Salt intended for industrial input must be washed and treated with naphthalene. Any industrial salt lacking such treatment, and an accompanying label on the packaging, cannot be transported across regional states and cities,” reads the letter.

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Untreated salt cannot pass through any Customs checkpoints in the country.

The latest developments come following a directive from the Trade Ministry obliging brewers and other industries to obtain salt from the Afar Mine Development Corporation, run by the Afar Regional State, for the shortages.

The directive effectively grants the Corporation a monopoly over the supply of industrial salt – a business that had no less than a dozen mining companies and 20 distributors involved until recently, along with thousands of artisanal miners.

Brewers use industrial salt to sanitize the water used for making beer, while tanneries use it to cure hides.

The Corporation recently entered into an agreement to supply 40,000 tons of industrial salt to manufacturers. The agreement stipulates that manufacturers cannot source salt from private suppliers.

The state-owned Ethiopian Industrial Inputs Development Enterprise (EIIDE), which used to supply unwashed salt to tanneries, is among those who now have no option but to source the input from the  Corporation.

However, the Corporation, which celebrated its first anniversary a couple of months ago, has been unable to access the chemicals (naphthalene) recently stipulated by federal officials.

In a letter last month to the ministries of Trade, Industry, and Mines, the Corporation’s executives expressed their confusion over the new rules.

“In order to treat the industrial salt with naphthalene and supply it to industries, as per the orders of the Ministry of Trade and Regional Integration, we inquire how to access the chemicals and would like to know which institution is designated to supply us with the chemical. We also request the Ministry to help us arrange access to naphthalene,” reads the letter.

There were no consultations before the chemical treatment was made mandatory, Mohammed Ali (Eng.), head of the Corporation, told The Reporter.

He disclosed the Trade Ministry did not conduct any environmental or social impact assessments regarding naphthalene, nor any studies on potential long term effects on the quality of leather cured with treated salt.

“It does not consider the country’s shortage of foreign currency; ordering us to obtain a chemical that could only be imported,” said Mohammed. ”We’d have to open a letter of credit. With the country’s foreign currency issues, it’s obvious this would take time. We are asking for a grace period to prepare all the necessary accommodations.”

Mohammed observes that while the Ministry of Health stipulates salt be treated with iodine, it supplies the chemical.

“But for naphthalene, there is no supplier designated by the government. We’re asking where we can get it from,” said Mohammed.

The ministries of Mines and Industry both immediately notified the Corporation the supply of naphthalene does not fall under either of their respective mandates. Talks with the Trade Ministry are ongoing.

The Corporation is also confused as to why the naphthalene stipulation was introduced so soon after the EIIDE was stripped of its mandate to supply unwashed industrial salt to manufacturers.

“EIIDE was working fine. It was only when we started our operations that the Ministry wrote the letter to enforce it. Why?” asks Mohammed.

Alemu Asefa, director of industrial inputs procurement at EIIDE, says the Enterprise’s involvement is limited to the supply of salt to tanneries.

He disclosed that a dozen EIIDE trucks carrying salt are currently held up at a customs checkpoint in Semera as a result of the naphthalene issue.

“There is a shortage of the chemical,” said Alemu. “We could not obtain it. Our suppliers’ trucks have been held up in Semera for the last two weeks.”

As the Corporation is left in limbo unable to access the chemical, salt supply has grinded to a halt, leaving brewers, tanneries and others unable to produce. Manufacturers have warned the Ministry of Industry they are on the verge of halting operations unless the supply of salt resumes.

Mohammed says the Corporation is not obligated to supply washed industrial salt to breweries.

“But, we are still willing to do so after signing new contracts with the brewers,” he said. “We have explained to them the problems we are facing and expressed our willingness to get them what they need after we sign deals with other factories to wash the salt and then supply it to them.”

Representatives of the Afdera Salt Producers Union, an umbrella of 2,600 salt producers and suppliers in Afar, told The Reporter they have been unable to supply brewers since federal food and drug regulators shut down a salt bleaching plant.

The bleaching plant, which treats raw salt with TTR and supplies it to brewers, was closed three months ago.

“We have 75,000 quintals in stock but we can’t supply it to brewers. We aren’t being paid and our members are without work,” said Geas Mehamed, a Union representative.

Officials from the Ministry of Trade and Regional Integration did not respond to inquiries from The Reporter before this article went to print.

“Those decisions were made by officials who are not on their position now,” said Meskerem Baheru, Domestic Trading and Consumers’ Right Protection team manager at MoTRI, in a text response to The Reporter. Meskerem is referring to Teshale, who is ousted from trade state minister position last week after passing the contentious decisions on salt supply market.

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