New crown cork factory joins market

ETHIOPIA – A new crown cork factory is prepping to begin production by mid-February 2015, bringing the total of such factories in Ethiopia to six, including one which plans to go into production around July this year.

The factory, to become operational by February, Peniel Industry Plc, is established by Birtukan Abeba with a capital of 120 million Br. The crown cork company rests on 2,000sqm of land in Nifas Silk Lafto District at Lebu Industrial Village. The land as well as the building was property of its sister company Alba Aluminum Plc.

A two-year feasibility study was done, after which it took the company around a year to modify the interior of the building to a cork factory, which meets the ISO standard, says Birtukan, adding that the machinery have all been imported and ready for installation, at the plant which will employ 83 people.

The company will begin manufacturing three billion crown corks a year; it could also begin producing cans after conducting market evaluation, according to Birtukan. The principal raw materials required for the production are sheet metal and polyvinyl chloride (pvc), which will be imported from Germany, according to the manager.

The local demand for crown cork is met through both local production and import. At present, the major source of supply to the local market for crown cork is mainly import. During the period between 2011 and 2013, on average, about 93.25pc of the total imports of crown corks were supplied by five countries, India (42.39pc), Spain (14.34pc), Egypt (14.2pc), Italy (12.97pc) and France (9.35pc), according to the Ethiopian Revenue & Custom Authority (ERCA). Others supply the remaining.

Ethiopian Crown Cork & Can Manufacturing S.C.,CGF-crown Cork and Aluminum Cap Manufacturing Factory, Daylight Applied Technologies Pvt. Ltd Co. and Metal Crown are the four local factories in Ethiopia. Based on the existing production trend, it is estimated that 1.3 billion pieces of crown corks have been produced locally in 2013, showing 12.6pc production growth compare to the 2012 fiscal year, according to Central Statistics Agency (CSA).

Besides Peniel Industry Plc, a new Ethio-Italian company is also set to join the four local factories. The Italian New Box S.P.A and Alemayehu Negussie, who is an Ethiopian Investor, own the company.

The company will go through the commissioning process by March and start manufacturing by June or July, 2015. It will have the capacity of manufacturing one billion crown cork a year. Therefore, these two companies are expected to raise the total local crown corks production to 4.3 billion pieces, which will still fail to meet the growing demand.

The demand for the crown cork in 2014 was 3.3 billion pieces. This figure is estimated to reach 5.5 billion pieces in 2015, according to research by One Cent Management and Marketing S.C.(OCM), May 2014.

One Cent Management is an Ethiopian private equity and assessment management share company established on December 3, 2010. The demand for crown cork depends mainly on the performance of its end-users such as beverage, mineral water and cosmetics industry, explains Fitsum Getu, chief investment and research director at OCM. It has seen a higher demand compared to the market supply of crown corks.

January 20, 2015; http://addisfortune.net/articles/new-crown-cork-factory-joins-market/

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.