BEHAK Exclusive- Edible oil is a crucial component of the Ethiopian diet, and its production plays a vital role in the country’s economy. In this comprehensive article, we will explore the manufacturing process of edible oil in Ethiopia, including the types of oils produced, the major manufacturers and importers, demand, and value of imported and manufactured edible oil, and the challenges faced by the sector. Manufacturing of edible oil in Ethiopia has been a significant industry in the country for many years.
Types of Edible Oils Produced
Ethiopia is fourth largest producer of sesame seed in the world behind India, China and Sudan. Niger
seed, which is also known as noug, is the second most widely-produced oilseed crop in Ethiopia, accounting for a little more than a quarter of total oilseed production and accounting for 28 percent of area planted to oilseeds. All other oilseed crops (soybeans, linseed, groundnuts, cottonseed etc.) grown in Ethiopia are almost entirely used domestically.
Ethiopia produces various types of edible oils, both from traditional and modern sources. The most commonly produced edible oils in the country include:
1. Sesame Oil: Sesame oil is one of the primary edible oils produced in Ethiopia. Sesame seeds are grown abundantly in different parts of the country, making it a popular choice for oil production. The oil is extracted from sesame seeds through mechanical pressing or solvent extraction methods.
2. Sunflower Oil: Sunflower oil is another widely produced edible oil in Ethiopia. Sunflower seeds are cultivated in different regions of the country, and their oil is extracted using mechanical pressing techniques. Sunflower oil is known for its light flavor and high smoking point, making it suitable for various cooking purposes.
3. Niger Seed Oil: Niger seed oil is a traditional Ethiopian edible oil that has been produced for centuries. Niger seeds are rich in oil content and are primarily grown in the Amhara and Tigray regions of Ethiopia. The oil is extracted through mechanical pressing methods.
4. Palm Oil: Although not as widely produced as other oils, palm oil production has gained some traction in Ethiopia. Palm trees are mainly cultivated in the Southern Nations, Nationalities, and Peoples’ Region (SNNPR) of Ethiopia. The extraction process involves pressing the palm fruit to obtain crude palm oil.
Manufacturing Process
The manufacturing process of edible oil in Ethiopia involves several stages, including seed selection, cleaning, extraction, refining, and packaging. Here is a step-by-step overview of the process:
1. Seed Selection: High-quality seeds are selected for oil production. The choice of seeds depends on the type of oil to be produced.
2. Cleaning: The selected seeds are thoroughly cleaned to remove impurities such as dirt, stones, and other foreign materials.
3. Extraction: The oil is extracted from the seeds using either mechanical pressing or solvent extraction methods. Mechanical pressing involves applying pressure to the seeds to extract the oil, while solvent extraction utilizes chemical solvents to dissolve the oil from the seeds.
4. Refining: The extracted crude oil undergoes a refining process to remove impurities and improve its quality. This process typically involves degumming, neutralization, bleaching, and deodorization.
5. Packaging: The refined oil is then packaged into various containers, such as bottles, cans, or drums, ready for distribution and sale.
Major Players in the Industry
Several companies in Ethiopia are involved in the manufacturing of edible oil. Some of the major players in the industry include:
Top Ten Edible Oil Manufacturers in Ethiopia
1. Savola Edible Oils Ethiopia PLC: Savola Edible Oils Ethiopia PLC is a subsidiary of the Saudi Arabian-based Savola Group, one of the largest food and retail conglomerates in the Middle East. They are a leading manufacturer and distributor of edible oils in Ethiopia, producing a wide range of products including vegetable oils, sunflower oil, palm oil, and soybean oil.
2. Mulugeta Metaferia Oil Factory: Mulugeta Metaferia Oil Factory is a prominent Ethiopian edible oil manufacturer known for its high-quality products. They produce various types of edible oils such as sunflower oil, sesame oil, and cottonseed oil. The company has a strong presence in the local market and is committed to providing healthy and nutritious cooking oils.
3. Kaleb Edible Oil Share Company: Kaleb Edible Oil Share Company is one of the leading edible oil manufacturers in Ethiopia. They specialize in producing different types of vegetable oils, including sunflower oil, soybean oil, and palm oil. The company has state-of-the-art production facilities and adheres to strict quality control measures to ensure the purity and safety of their products.
4. Abyssinia Integrated Steel PLC: Abyssinia Integrated Steel PLC is a renowned Ethiopian company that not only manufactures steel products but also produces edible oils. They have a dedicated division called Abyssinia Oil Mill, which produces high-quality cooking oils such as sunflower oil, soybean oil, and palm oil.
5. Tsehay Industry S.C: Tsehay Industry S.C is a well-established Ethiopian company engaged in various sectors including edible oil production. They produce a wide range of cooking oils such as sunflower oil, soybean oil, and cottonseed oil. Tsehay Industry S.C has gained a reputation for its commitment to quality and customer satisfaction.
6. Belayneh Kinde Import & Export: Belayneh Kinde Import & Export is a prominent Ethiopian company involved in the import and export of various products, including edible oils. They import high-quality cooking oils from reputable manufacturers and distribute them in the local market. Their product range includes sunflower oil, soybean oil, and palm oil.
7. Kifiya Edible Oil Factory: Kifiya Edible Oil Factory is a leading Ethiopian manufacturer of edible oils. They produce a wide range of cooking oils, including sunflower oil, soybean oil, and cottonseed oil. The company is known for its commitment to quality and uses advanced technology in its production processes.
8. Hamaressa Edible Oil Share Company: Hamaressa Edible Oil Share Company is an Ethiopian manufacturer that specializes in producing edible oils from locally sourced raw materials. They produce high-quality cooking oils such as sunflower oil, soybean oil, and palm oil. The company focuses on sustainable production practices and has a strong presence in the local market.
9. Gutema Firisa Construction PLC: Gutema Firisa Construction PLC is a well-known Ethiopian company primarily engaged in construction activities but also involved in the production of edible oils. They have a dedicated division called Gutema Oil Mill, which produces various types of cooking oils such as sunflower oil, soybean oil, and palm oil.
10. Mega Food Complex PLC: Mega Food Complex PLC is another prominent player in the Ethiopian edible oil industry. They produce high-quality edible oils using modern manufacturing techniques.
Challenges Faced by the Sector
The manufacturing of edible oil in Ethiopia faces several challenges that hinder its growth and development. Some of the key challenges include:
1. Limited Access to Finance: Many small-scale oil producers struggle to access adequate financing including foreign currency to open LC and invest in modern machinery and technology, limiting their production capacity.
2. Lack of Infrastructure: Inadequate infrastructure, such as roads and storage facilities, poses challenges in transporting raw materials and finished products efficiently.
3. Quality Control: Ensuring consistent quality control throughout the manufacturing process is a challenge for some producers, affecting the overall reputation of Ethiopian edible oils.
4. Competition from Imported Oils: Ethiopia also faces competition from imported edible oils, which are often cheaper due to economies of scale in larger producing countries.
In general, the manufacturing of edible oil in Ethiopia is a significant industry that contributes to the country’s economy and provides essential food products for its population. Sesame oil, sunflower oil, niger seed oil, and palm oil are among the most commonly produced edible oils in Ethiopia. The manufacturing process involves seed selection, cleaning, extraction, refining, and packaging.
Major players in the industry include Savola Edible Oils Ethiopia PLC, and Mega Food Complex PLC. However, the sector faces challenges such as limited access to finance, lack of infrastructure, quality control issues, and competition from imported oils.
Edible Oil Import Business in Ethiopia
The volume and value of edible oil imports in Ethiopia have shown a significant increase over the years. Ethiopia is one of the largest importers of edible oil in Africa due to its growing population and increasing urbanization. The country’s domestic production of edible oil is not sufficient to meet the demand, leading to a heavy reliance on imports.
Volume of Edible Oil Imports
The volume of edible oil imports in Ethiopia has been steadily increasing over the years. According to data from the Ethiopian Ministry of Trade and Industry, the volume of edible oil imports in 2015/2016 was approximately 1.2 million metric tons. This increased to around 1.4 million metric tons in 2016/2017 and further rose to about 1.6 million metric tons in 2017/2018.
Value of Edible Oil Imports
Ethiopia heavily relies on imported edible oil to meet its domestic demand. According to the Central Statistical Agency of Ethiopia, the country imported around 1.2 million metric tons of edible oil in 2019. And has been growing since then, according offcial data. The major sources of imports include countries like Malaysia, India, Turkey, and Saudi Arabia.
The value of edible oil imports in Ethiopia has also witnessed a significant rise. In 2015/2016, the value of edible oil imports was estimated at around $1.2 billion. This increased to approximately $1.4 billion in 2016/2017 and further rose to about $1.6 billion in 2017/2018.
**Reasons for Increased Imports:**
There are several reasons for the increased volume and value of edible oil imports in Ethiopia:
1. Growing Population: Ethiopia has a rapidly growing population, which has resulted in an increased demand for food products, including edible oil.
2. Urbanization: The process of urbanization has led to changes in dietary patterns, with an increasing preference for processed and convenience foods that require edible oil as an ingredient.
3. Limited Domestic Production: Despite efforts to promote domestic production, Ethiopia’s capacity to produce edible oil domestically is limited due to factors such as low agricultural productivity, inadequate infrastructure, and limited access to modern farming techniques.
4. Economic Growth: Ethiopia has experienced significant economic growth in recent years, leading to an increase in disposable income and consumer purchasing power. This has contributed to the rising demand for imported edible oil.
5. Trade Liberalization: The Ethiopian government has implemented trade liberalization policies, which have facilitated the importation of goods, including edible oil, from various countries.
Top Ten Importers of Edible Oil in Ethiopia
1. Mohammed International Development Research and Organization (MIDROC) Ethiopia: MIDROC Ethiopia is a prominent importer of edible oil in the country. It is a subsidiary of MIDROC Group, which is owned by Sheikh Mohammed Hussein Ali Al-Amoudi, one of the wealthiest individuals in Ethiopia. The company imports various types of edible oils, including palm oil, soybean oil, sunflower oil, and vegetable oil.
2. East African Holding: East African Holding is another major importer of edible oil in Ethiopia. The company operates in various sectors, including manufacturing, agriculture, and real estate. It imports a wide range of edible oils to meet the growing demand in the Ethiopian market.
3. Belayneh Kindie Import and Export: Belayneh Kindie Import and Export is a well-known importer and distributor of edible oil in Ethiopia. The company imports different types of edible oils from various countries and supplies them to wholesalers, retailers, and consumers across the country.
4. Tana Trading PLC: Tana Trading PLC is an Ethiopian company engaged in the import and distribution of various products, including edible oil. The company imports high-quality edible oils from different countries to cater to the local market’s needs.
5. Kaleb Service Farmers Cooperative Union: Kaleb Service Farmers Cooperative Union is a cooperative union involved in agricultural activities, including the importation of edible oil. The union imports edible oils to support its members and ensure a stable supply of cooking oil in the region.
6. Ethio Agri-CEFT: Ethio Agri-CEFT is an agricultural company that engages in the importation and distribution of edible oils in Ethiopia. The company focuses on promoting sustainable agriculture practices and imports high-quality edible oils to meet consumer demands.
7. Ethiopian Trading Businesses Corporation: Ethiopian Trading Businesses Corporation is a state-owned enterprise involved in various trading activities, including the import and distribution of essential commodities like edible oil..
8. Safeway Agro: Safeway Agro is an Ethiopian company involved in the importation and distribution of various agricultural products, including edible oils. The company imports different types of edible oils to meet the diverse needs of consumers in Ethiopia.
9. Ethio-Asian Industries PLC: Ethio-Asian Industries PLC is a leading importer and distributor of edible oil in Ethiopia. The company imports a wide range of edible oils, including palm oil, soybean oil, and sunflower oil, to meet the demands of the Ethiopian market.
10. Mega Importers PLC: Mega Importers PLC is a well-established importer and distributor of various products, including edible oils, in Ethiopia. The company imports high-quality edible oils from different countries and supplies them to wholesalers, retailers, and consumers across the country.
Regulations and Policies
The Ethiopian government has implemented various regulations and policies to regulate the importation and distribution of edible oil. These regulations aim to ensure the quality, safety, and fair trade practices in the industry. Some of the key regulations include:
1. Ethiopian Conformity Assessment Enterprise (ECAE): The ECAE is responsible for inspecting and certifying imported edible oil products to ensure compliance with Ethiopian standards.
2. Food, Medicine, and Healthcare Administration and Control Authority (FMHACA): FMHACA is the regulatory body that oversees the safety and quality of food products, including edible oils, in Ethiopia.
3. Customs Regulations: Importers are required to comply with customs regulations, including proper documentation, payment of duties and taxes, and adherence to import quotas.
These regulations aim to protect consumers from substandard or adulterated edible oil products while promoting fair competition among importers.
Challenges
The edible oil import business in Ethiopia faces several challenges that impact its growth and profitability. Some of the key challenges include:
1. Infrastructure: Inadequate transportation infrastructure, including roads and ports, can lead to delays in importing and distributing edible oils.
2. Price Volatility: Fluctuations in international oil prices can impact the cost of imported edible oils, affecting profit margins for importers.
3. Competition: The edible oil import market in Ethiopia is highly competitive, with numerous players vying for market share. This can lead to price wars and reduced profitability.
Opportunities
Despite the challenges, there are also opportunities for growth in the edible oil import business in Ethiopia. Some of the key opportunities include:
1. Increasing Demand: The growing population and changing dietary habits present a significant opportunity for increased demand for edible oils in Ethiopia.
2. Product Diversification: Importers can explore diversifying their product offerings by importing a wide range of edible oil varieties to cater to different consumer preferences.
3. Investment in Local Production: There is potential for investment in local edible oil production to reduce reliance on imports and promote self-sufficiency.
In general, despite challenges such as infrastructure limitations and price volatility, there are opportunities for growth and investment in this sector.