Procurment office suspends Yekatit’s product over quality

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The Public Procurement and Property Disposal Service (PPPDS) has temporarily suspended buying paper from Yekatit Paper Converting Plc on grounds of low quality product  and delayed supply.
Yekatit, a company that was privatized at a cost of 50 million birr three years ago, used to supply 60 percent of the paper demand in federal offices, while Ama Paper and Paper Works located in Hawassa, supplies 35 percent, and the rest five percent is imported from Indonesia, China and India.
For this fiscal year, the government has budgeted 1.3 billion birr to purchase paper for its offices. To support local producers, the government currently buys a pack of paper for 120 birr from local companies while it pays 60 birr per pack for those imported from Indonesia.
Yigezu Daba, Director of PPPDS told  Capital that Ama will now be responsible for covering the rest 60 percent paper demand that was previously  filled by Yekatit.
“We received comments from government offices that Yekatit didn’t deliver orders on time, and  the products were of lower quality. Due to this, we have informed the company that we will not accept its product unless these problems are solved,” said Yigezu.
He also added that the government has given Yekatit a two month grace period to fix the problem.
Demelashe Tebik, General Manager of Yekatit told Capital that the issue comes with shortage of raw material in the local market.
“We faced challenges on getting abundant raw material specially the soft wood that is needed to produce sheets. And we wrote a letter to PPPDS to temporarily stop buying paper from us’’ the manager said. 
“We ordered the raw material from Indonesia and the problem will be solved in not more than one month.”
Ama, who took over Yekatit’s market share, said it has the capacity to cover 95 percent of government office demand for paper.
“Even though we entered the market in the current Ethiopian year, we have the capacity to produce from 15,000 up to 30,000 tons of paper annually. We are fully covering the balance until Yekatit resumes work,” said a company official. The company also supplies paper to Oromia, Amhara and Benishangul regions government offices.