Closed beverage bottlers resume operations

ETHIOPIA – After almost ceasing operations for the past month, the Coca Cola, Ambo and Pepsi plants in Dire Dawa, Hawassa and Ambo have restarted operations with the permission of Ministry of Trade.

The plants, owned by MOHA Soft Drinks Industry S.C and East African Bottling S.C, were closed in connection to substandard quality, subsequent to the ministry’s inspection of each plant.

After a long back and forth, the Ministry has allowed the factories to begin operation. In a letter issued to Moha on December 30, 2016 the Ministry gave permission for the plant to reopen, and it began production on January 4 2017.

The Coca Cola plant also resumed production at the same time.

The Ministry conducted a routine inspection of the plants in October 2016, which revealed that the products of all the plants contained lead and did not meet pH value guidelines set by the Ethiopian Standards Agency.  

The requirements state that pH values for soft drinks (aside from citrus juices) have to be 2.5. Pepsi’s samples showed 2.43.

“At the time, we were shocked,” said a senior manager at Moha’s plant. “The closure came out of the blue. We provide the best quality products.”

The company estimates that it lost close to 50 million Br, according to the manager.

East Africa Bottling Co, the producer of Coca Cola, was also closed for similar reasons. Three years ago the company has also invested close to 20 million dollars to increase its capacity fivefold.

The Ministry has also permitted Ambo Mineral Water to re-start operations.

In addition to the presumed financial losses, there is currently a significant shortage of Ambo Mineral water across the city. Bar owners, shops, hotels and distributors who spoke with Fortune all agree on the shortage.

Ambo has a production capacity of 26,000 glass bottles and 10,500 plastic bottles per hour.

In December 2016, the government decided to fully privatize the company by selling its 33pc remaining shares to Ambo International Holding Ltd for 19.7 million dollars.

Patrick Plunkett, commercial manager of Ambo, declined to comment on whether the shortage is related to the recent action by the Ministry.

“The product is on the market,” said Plunkett. “Ask the ministry for clarity.”

“The process is not over. The inspection is still ongoing for other manufacturers than soft drinks,” said Kassahun Mulat, Inspection Regulatory Director at MoT. “It is not the time to comment on the issue.”

January 17, 2017; http://addisfortune.net/articles/closed-beverage-bottlers-resume-operations/

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