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There is great potential for cooperation between China and Ethiopia in the coffee sector

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In early morning, the valley was bathed in sunlight as the sun peeked through the trees, casting a warm glow over the land of hope. Braving the rising sun, my Embassy team and I reached the renowned Ethiopian coffee-growing region of Yirgacheffe. As a coffee enthusiast, I have been captivated by this place for long. After three months of working in Ethiopia, I finally made my trip here, and my excitement and anticipation was obvious.

In Yirgacheffe, we picked coffee cherries in a light drizzle, visited processing facilities and learned procedures for coffee washing, sun-drying, and storage, each step marked by the sweat and toil of farmers. When a freshly brewed cup of coffee was handed to me, its rich aroma immediately filled the air. With a sip, I savored its rich and lingering aftertaste, as if it were telling the story of this land. We also visited another famous coffee-growing area Sidama, where we learned more about Ethiopian coffee from the proud and enthusiastic introduction by our local friends.

As the birthplace of coffee, Ethiopia’s coffee industry plays a crucial role in its national economy, connecting millions of households. According to statistics, Ethiopia has approximately 5 million small-scale coffee growing households, and over 25 million people are engaged in coffee production, processing, and sales nationwide. Ethiopia is one of the world’s most significant coffee-producing areas and exporters, with an annual output of 600,000 tons. Nearly half of it is consumed domestically, and the other half is exported, accounting for a considerable share of the global market.

In recent years, the Chinese coffee market has expanded at an astonishing rate. With the younger generation of consumers pursuing a better quality of life and changing their consumption habits, coffee has increasingly become an indispensable part of people’s daily life. The size of China’s coffee consumption market has maintained a growth rate of approximately 20% in recent years, and the number of coffee shops has been increasing. My hometown Shanghai has been the city with the most coffee shops for three consecutive years, surpassing London, New York, and Tokyo.

Driven by increasing supply and demand, cooperation between China and Ethiopia in coffee has been thriving. In recent years, Ethiopian coffee has become more and more popular in the Chinese market, with exports to China growing at a rate of 27% per year. Among Chinese consumers’ love for coffee culture,  Ethiopian premium coffee has found a broader stage. Young Chinese people are keen to try different origins and flavors of coffee, and they are particularly fond of the unique taste of Ethiopian coffee. Small coffee beans have traveled across oceans, becoming an important bond of friendship between China and Ethiopia. Just as the Maritime Silk Road brought tea and porcelain to the East African coast, today Ethiopian coffee is entering households across China. The two-way exchange of coffee and tea is bringing the two countries’ cultures and people closer.

The above cooperation aligns perfectly with the direction advocated by the “Partnership Action for Agriculture and Livelihoods” proposed by Chinese President Xi Jinping during the Forum on China-Africa Cooperation (FOCAC)  Beijing Summit in September this year. It will undoubtedly promote China-Africa cooperation in agriculture, boost Ethiopia’s agricultural modernization, create more jobs, increase farmers’ income, and enable the people of Ethiopian to walk together with us on the road to prosperity.

Before coming to Ethiopia, I worked in Myanmar for over five years, supporting local coffee farmers, especially those in highland areas, through the Lancang-Mekong Cooperation Fund and other means to help Myanmar’s coffee industry become industrialized and boost its exports. After visiting Yirgacheffe, my colleagues and I saw even more clearly that there is broad scope for cooperation between China and Ethiopia in the field of specialty agriculture like coffee. Ethiopia’s rich civilization, abundant resources, and favorable geographical location can be fully transformed into powerful drivers for development. Coffee cooperation between China and Ethiopia will undoubtedly write a more vivid chapter. On the journey towards modernization, China will always be a partner with Ethiopia.

Chen Hai is Ambassador Extraordinary and Plenipotentiary of The People’s Republic of China to the Federal Democratic Republic of Ethiopia

Transforming Ethiopia’s Pharmaceutical Supply Chain: The Success Story of EPSS

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The Ethiopian Pharmaceutical Supply Service (EPSS) has made remarkable strides in revolutionizing the country’s pharmaceutical supply chain, culminating in its recognition as the Grand Prize winner at the 2024 Global Health Supply Chain Summit held in Lagos, Nigeria. This prestigious award reflects years of dedicated effort, strategic planning, and a commitment to delivering essential medicines efficiently and affordably to millions of Ethiopians.

A Vision for Change

EPSS embarked on its transformative journey with a clear objective: to address systemic challenges within the pharmaceutical supply chain and implement tangible improvements across its operations. Central to this transformation has been the adoption of the KAIZEN philosophy, which emphasizes continuous improvement through collaborative daily work management. This approach has led to breakthrough innovations targeting critical bottlenecks in supply chain processes and systematic engagement of leadership for effective change management and sustainability.

One of the most significant achievements during this transformation has been the dramatic improvement in inventory accuracy, which surged from 90% to an impressive 99.8%. This enhancement not only streamlined warehouse operations but also ensured that life-saving medicines are available when and where they are needed most. Additionally, distribution costs have decreased from 0.9% to 0.5%, while proof of delivery rates improved from 89% to 98%.

Streamlining Operations

The reduction in order processing lead times has been particularly noteworthy, with some hubs experiencing a decrease from six days to just eight hours. This remarkable enhancement has significantly increased the responsiveness of the supply chain to customer demand, ensuring that healthcare providers have timely access to essential medications.

Another transformative milestone was the optimization of warehouse layouts. By redesigning storage spaces and implementing advanced racking systems, EPSS achieved full utilization of its facilities, freeing up approximately 744 square meters of valuable space. This redesign not only created safer working environments but also reduced the distance workers traveled within warehouses from 77 kilometers to just 17 kilometers per month. Such improvements have saved time and boosted productivity.

Embracing Digital Transformation

Digital transformation has been at the core of EPSS’s journey towards operational excellence. By leveraging advanced digital dashboards and data visualization tools, EPSS has revolutionized its decision-making processes, providing real-time insights into supply chain performance. These tools have enhanced visibility across operations, enabling the organization to proactively respond to emerging challenges and maintain a steady flow of essential commodities.

For instance, the introduction of innovative near-expiry visualization systems has helped reduce wastage rates from 1.8% to under 0.8%. This initiative not only saved resources but also strengthened trust with stakeholders and partners by ensuring that valuable medicines do not go unused due to expiration.

Building a Culture of Continuous Improvement

Beyond operational achievements, EPSS has fostered a cultural transformation within its workforce. By training over 1,500 employees in Lean and KAIZEN principles as well as supply chain fundamentals, EPSS has built a culture characterized by accountability, teamwork, and continuous learning. Daily KAIZEN boards and project governance systems have become integral in maintaining momentum for improvements and ensuring that successes are scaled across all operational hubs.

The establishment of an Improvement and Skilling Center at EPSS headquarters and selected hubs has further institutionalized this culture of continuous improvement. These centers focus on integrated project management, enhancing accountability across the organization, knowledge management, and facilitating reward and recognition systems for outstanding performance.

Commitment to Sustainability

Sustainability has remained a cornerstone of EPSS’s transformation journey. The organization is committed to ensuring that its improvements are not only effective but also sustainable in the long term. The addition of an Enterprise Resource Planning (ERP) system based on SAP S/4HANA is expected to further reinforce EPSS’s capabilities in sustaining improvements while adapting to future challenges.

Dr. Abdulkadir Gegelo, Director General of EPSS, emphasized that winning the Grand Prize at the Global Health Supply Chain Summit is a testament to the relentless pursuit of excellence by his team. He noted that this recognition reflects their commitment to transforming challenges into opportunities for better service delivery in Ethiopia’s healthcare sector.

Future Prospects

As EPSS looks forward, it remains steadfast in its mission to build on these accomplishments. With robust systems in place, an empowered workforce, and forward-looking strategies, EPSS is well-positioned not only to continue driving impactful change within Ethiopia but also to serve as an inspiration for healthcare systems worldwide.

Ethiopia’s healthcare landscape is evolving rapidly, with increasing demands for high-quality pharmaceuticals driven by population growth and urbanization. The successful transformation of EPSS serves as a model for other organizations aiming to improve their supply chains amidst similar challenges.

In conclusion, the journey of the Ethiopian Pharmaceutical Supply Service exemplifies how strategic focus on continuous improvement can lead to significant advancements in public health infrastructure. By prioritizing efficiency, embracing technology, and fostering a culture of accountability and learning, EPSS is not just enhancing its operations but is also making a profound impact on the health outcomes of millions of Ethiopians. As it continues on this path, EPSS stands as a beacon of innovation in the global health supply chain landscape.