Ethiopia beefs up edible oil production with launch of new US$114m processing plant

ETHIOPIA – WA Group, Ethiopian multi-sectoral company has set the turbines rolling at its newly built Birr 5 billion (US$114m) edible oil processing plant.

The recent investment is a move by the company from importation of edible oil into the country, to refining of crude palm oil imported from abroad, and crushing of locally sourced oil seeds such as niger seed, sesame seed, peanut, soya bean, and haricot bean.

WA Oil Factory, located in Amhara Regional State, has the processing capacity of 1.3 million litres of edible oil daily.

According to reports by Addis Fortune, it is the ninth investment by the WA group, which has been involved in the mining, aviation, farming, real estate, petroleum, water bottling and edible oil trading and distribution sectors.

With a target of creating a linkage with at least 2,500 farmers to source raw materials, the factory has already stocked inputs needed to fully start production.

Ethiopia has an approximate demand of 70.9 million litres of edible per month

WA is the third edible oil factory to be inaugurated this year, following Belayneh Kinde Group launching PhiBela Edible Oil Factory in February 2021, worth Birr 4.5 billion (US$113.7m).

The facility with a daily production capacity of 1.5 million litres of palm oil is deemed to be the largest edible oil factory in the country to potentially cover 60% of the country’s demand when fully operational.

A month later, another factory in Dire Dawa, Shemu Plc, invested Birr 1.6 billion (US$39.75 million) in the expansion of its processing plant.

The expansion, will enable the company to refine 950 tonnes a day, a rise from 120 tonnes capacity in 2017 when it was inaugurated and 230 tonnes after its first expansion in 2019.

While both are undertaking production by only refining crude oil, WA has made the bold move of producing the commodity from locally sourced raw materials, despite the low productivity being experienced in the sector.

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According to a recent GAIN report by USDA, Ethiopia’s oil seeds production i.e., sesame seed, Niger seed, and soybeans in marketing year 2020/21 (October to September) is estimated to reach 705,000 metric tons, slightly down by 0.3 percent over previous year.

Understanding the challenges facing the sector and as a strategy to substitute direct imports of edible oil, the government has prioritised the importation of crude palm oil, mainly from Malaysia and Indonesia through the availing of foreign currency.

Ethiopia has an approximate demand of 70.9 million litres of edible per month. However, domestic production sits somewhere around 47.7 million litres a month, satisfying only two-thirds of the demand.

With the joining of the new oil manufacturing projects, the country would be able to produce 50.6 million litres of palm, 27 million litres of sunflower, and 21.8 million litres of soybean oil annually.

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