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Elemtu Integrated Milk Industry S.C is set to commence milk production at its facility in Sululta in November. Installation of the required machinery will start this week after an 8 month delay due to problems of electricity.
According to the Board Chairman, the share company had already bought and received the machines for the factory in December from Nikos, a Bulgarian company. Nikos has assembled the machines with parts acquired from various other companies. The 60 million birr factory will be erected in just 45 days. “We will conduct a minimum of five days trial with our technicians for production before the market starts,” said the Chairman.
“We are planning to do the marketing come November,” said Belachew Hurrissa, the Board Chairman of Elemtu. The product will be sold in half-litre containers.
The factory, which will have the capacity of producing 30,000 litres of milk per day in one shift of 8 hours, is expected to boost the market in milk nationwide. “Our plan is to produce around 60,000 litres per day when we double the shift,” he said. “Currently both farmers and consumers are price takers, meaning they don’t have control over pricing,” he said. “The middlemen are the ones controlling the prices and are usually the price makers. They buy the milk at very low prices and sell it at quite high prices.”
Belachew stated that the objective of Elemtu, whose shareholders are banks, insurance companies, public enterprises and people from the diaspora community, is to redress the problems of both farmers and consumers alike.
The company plans to do this by buying milk from farmers and processing it. Belachew said that there is a lack of expertise, capital and technology in the milk and dairy industry and Elemtu was established to also address these issues. Like many other companies in the country, the basic challenge facing Elemtu was the provision of electric power. “It took us quite some time to even get the transformer installed,” he said. “I believe there are problems that need to be resolved by EEPCo,” he said.
He indicated that EEPCo has already installed the 1,200 KV transformer manufactured by Metal and Engineering Corporation (MetEC). “We paid EEPCo 1.9 million birr to procure it for us and install it,” he said.
A 120 KV generator has also been procured by the company in case of emergency situations like blackouts to keep the milk at the required temperature.
Elemtu has signed a Memorandum of Understanding (MoU) to jointly manage the facility with a Kenyan Company, Brookside, the biggest milk and diary factory in East Africa. , Brookside produces 700,000 litres of milk per day.
“The agreement will enhance the capacity of our factory as well as increase the capital of our company,” Belachew said. The agreement we have reached with Brookside will raise our capital to 160 million birr and we will be able to efficiently handle the Ethiopian market together,” he added. The share company acquired 200,000 sqm of land in Sululta from the Oromia Special zone of the Oromia Regional state, purchasing it for 1.50 birr per square meter and signing an 80-year lease agreement.
Elemtu was first established three years ago and floated 80,000 shares worth 40 million birr. It has now increased the number of company shares that can be acquired by the public. “In total, we floated 152,000 shares,” he said.
Elemtu’s subscribed capital has reached 42 million birr, out of which 35 million birr is paid up. The company is selling shares at a cost of 500 birr per share and the minimum number of shares one can acquire at Elemtu is five. About 70 percent of the milk supplied to the Ethiopian market is from the Addis Ababa-Goha Tsion area where Elemtu has constructed its factory and is known as a milk-shed area.