Police are looking into a transaction made between the Ethiopian Industrial Input Development Enterprise (EIIDE) and End Global Food Processing P.L.C. after it received a tip about low quality delivery from a production manager at the latter’s factory.
Police opened the investigation the day after receiving information. They then searched the warehouse where the soap was stored. Police took 40 packet samples from the store and banned the rest which is over 24,000 packs.
Last Thursday police reviewed the situation with the Ethiopian Conformity Assessment Enterprise (ECAE) and opened the warehouse after receiving results from ECAE but still banned the soap from being distributed.
The soap failed to meet grade one standards and the results are being used as evidence for the investigation process, a source close to the case told Capital.
End Global signed an agreement to deliver grade one quality soap to EIIDE after winning the competitive bid at the end of September 2017.
The procurement attracted four detergent production companies. Only three returned the bid document. Among the three EIIDE has chosen two companies to supply the detergent where Toria soap and Detergent Industries failed to supply reasoning the devaluation of birr to be a barrier.
The Enterprise confiscated its 100,000 birr security bond from Toria, and proceeds deals with End Global which was willing to meet its commitment.
End Global promised to deliver the soap within six months starting October 2017, which was later extended to eight months, but they delivered only 17% by May 2018.
The company, established with an investment license nine years to process food, changed its investment to detergent production. Unfortunately it was not able to change its name because of the delay in the government procedure, according to Liyu Yemeshaw, the CEO of the company.
Mesgena Welday, owner of End Global, argues that it is not the first time the soap has failed the quality tests rather it’s its second time. He said the failure in the agreed quality is normal and falling the grade one requirements didn’t mean that its harmful, rather it’s in the permitted range of grade two in the nation.
He said that when the ECAE said it didn’t meet the first grade the soaps were sold in Merkato and replaced with the grade one. “The failure and replacement procedure is normal not only for our delivery but we also saw other companies which were taking out goods which didn’t meet the standards,” he said.
Inderis Negus, the Acting CEO of the EIIDE shares Mesgna’s Idea that returning the products which don’t fit the requirement is normal. “We return many other items not only soap when they fail the requirement,” he told Capital.
He also explains that after the goods are delivered to the warehouse we will wait for the ECAE result to accept the delivery. “Whenever there is a defect in quality we will return the goods back,” Inderis said.
He admits that the company is suffering from the returning defecting products as it consumes extra time but it is our commitment to our customers.
Inderis also argues that the EIIDE goes further to meet the standard expectation of the consumers even beyond what other government organizations want. “This is the main reason why we are suffering from the returning back of goods,” he adds.
The EIIDE emerged after absorbing Merchandise Wholesale Import & Trade Enterprise (MWITE) two years ago. The MWITE was formed in 1993 with the merger of the Ethiopian Domestic Distribution Corporation (EDDC) and Ethiopian Import Export Corporation (EIEC) following the change in the regime and economic reform.
Police investigate 46 million birr soap purchase
Mesfin Industrial seals 76 mln Birr deal to make poles for Aysha Wind Farm II
Mesfin Industrial Engineering P.L.C. (MIE) signed a USD 2.77 million deal with Dongfang Electric Corporation (DEC) to manufacture a pole to hold the wind turbines of the Aysha II wind farm.
Based on the commitment DECL made to the government to partner with a local company in the project, MIE was chosen based on its performance according to Daniel Gebre, Marketing Manager of MIE.
“We entered in to a Memorandum of Understanding with the company before got the project and now we signed to deliver the products within nine and half months,” he said.
The agreement which was signed July 5, 2018, will enable DECL to get some turbine carrying poles, others will be imported.
This will help transfer technology and save foreign currency while increasing the competitiveness of the company.
The wind farm which is going to have 80 turbines at 1.5 megawatts each is located in the Ethiopian Somali Region located 20km from Djibouti’s border which makes the project strategic. It will be in Aysha City which is located in the Shenele Zone of the region. Aysha City is where an industrial park will be built.
The region has more than four million people. It is the second largest region of the country next to Oromia, known for its livestock, crop production and lately crude oil extract.
Dongfang, an enterprise group directly supervised by the Chinese Central Government, is headquartered in Chengdu, the capital city of Sichuan Province. The company has been involved in international project contracting for 30 years, and specializes in contracting for power stations.
This will be the fourth wind farm after Adama I, Adama II and Ashegoda wind farms which have a capacity to generate 324 Megawatts in total.
Labor Union critical of EIIDE’s excessive rent
The basic labour union of the Ethiopian Industrial Input Development Enterprise (EIIDE) has filed a claim to the Ministry of Industry (MoI) about the challenges that the enterprise faces.
In the 15 page letter employees address what they feel are strengths and challenges of EIIDE.
The letter was sent to MoI on Monday July 9 and copied to nine public offices including the Office of the Prime Minister, Ministry of Finance and Economic Cooperation, Ministry of Trade and the EIIDE board. In it 14 problems were addressed. The enterprise was expected to feed the industrial sector by supplying inputs and encouraging the producers to distribute manufactured products with widespread distribution centers across the country.
However they stated that several problems like misconduct and lack of proper management have caused the body to be endangered.
According to the letter that Capital obtained, the management and the former board have not managed the organization well.
The enterprise is renting an office around Vatican Embassy for around 13 million birr a year. That price rises one million birr every year.
Mohammed Awel, Chairman of the trade union.
says the enterprise uses the building located in Piazza as its head office.
EIIDE was formed about four years ago by taking most of the operation of Merchandise Wholesale and Import Trade Enterprise (MEWIT), which was established in 1993 through a merger between trading groups, including the Ethiopian Domestic Distribution Corporation and the Ethiopian Import Export Corporation.
The letter claimed when MEWIT was formed the office of the Import Export Corporation was not transferred to MEWIT and it should be returned and an additional office made for EIIDE rather than paying a huge amount for rent.
They also said that there have unlawful sales and procurement of rebar.
The letter indicated some managers overseeing millions of birr have fled abroad or abruptly quit.
The 3,000 employee enterprise handles 14 billion birr in materials. They letter is asking for the governments help to properly manage the agency.
Recently Capital reported that about three months ago the founding CEO of EIIDE, Asfawossen Alene fled to the US with his deputy, the CEO for Procurement, Abay Kebede.
Employees said there has been corruption at the agency related to rebar fraud.
In his email Abay sent to Capital from the US he argued that he did not flee to the US but instead is on annual leave for medical reasons. However the human resource division reported that Abiy is absent from his duty without getting approval for annual leave.
EIIDE recently hired a new board chairperson and other new blood in the board of directors including MelakuAlebel, the recently appointed Minister of Trade, who was assigned to chair the board, and Ahmed Tussa, the recently assigned State Minister of Finance and Economic Cooperation.
The former board was chaired by Mebrahtu Melese (PhD), who is now state Minister of Trade.
Capital’s effort to talk BogaleFeleke, State Minister for the Ministry of Industry, who is responsible to look after the enterprise, was unfruitful.
