MOHA stopped production
Sugar may soon be imported from abroad to alleviate the current shortage, Capital has learnt. The industry was already experiencing some problems as Tendaho Number One which was expected to produce 75,000 tons as of January 2014, is not yet completed. This coupled with the sudden crop failure at Finchaa sugar factory in early May 2014, has forced the Sugar Corporation to reduce quotas or eliminate sugar subscriptions.
As a result, Moha Soft Drinks Share Company- one among the biggest subscribers of the corporation- and maker of Pepsi products stopped production for the last two weeks. Moha, was usually consuming 16,062 quintals of sugar each month from the corporation, however has not received anything from the corporation since June 28, 2014, according to a spokesperson for Moha. As a result all seven of its factories are currently idle.
“When we have received sugar it was lower quality than our standards so it has to go through another process to be used as a raw material. But we can still tolerate that because we want to keep our good relationship with the corporation. However when we can’t get any sugar at all obviously it becomes very difficult,” Solomon Bekele, Sales and Marketing manager of Moha, told Capital.
Though the damage varies, a number of the industries- especially soft drink and biscuit manufacturers like the East Africa Bottling Share Company (Coca Cola) – another giant subscriber- are facing challenges, although the East Africa Bottling Share Company declined to comment.
Some have brought the issue to the Ministry of Trade (MoT) and the Ministry of Industry (MoI).
The corporation is hoping, to minimize the problem by pushing Tendaho One to start production within the coming week. “We are hopeful that Tendaho will start production within the next few days. It is already completed. The impact will then be high,” Zemedkun Tekle, communication director at the corporation told Capital.
“Now that it is almost finished we will make up for the lost time by working through the summer starting next week,” Zemedkun said.
Kesem – another state owned sugar factory being constructed by a Chinese company will start production in November 2014, according to the corporation.
Yet the margin in the demand and supply of sugar in the country remains high. The quota for the total of 129 subscribers which are manufacturers was 90,000 quintals of sugar. The rest is distributed to associations for household consumption. “Normally, our demand is 25,000 quintals per month. We want to expand it so we can increase our taxable revenue from the current 1.9 million birr but with the current situation we cannot sustain the current amount,” Solomon said.
“At such moments, we give priority to households” said Zemedkun from the corporation. Currently, the quota set by the government for household consumption per month is 507,000 quintals of sugar – 102,000 for Addis Ababa and 405,000 quintals for other regions- per month.