Eksoy Chemical Industries Ltd, a Turkish based chemicals manufacturer, is about to get in to the Ethiopian market by supplying chemicals and dyestuff to textile factories via a bonded warehouse scheme.
There is a scheme which enables foreign chemical manufacturers to supply their products in Ethiopia. According to Fortune, they can have their products in a bonded warehouse, from where the customs clearing will take place as the products are sold. This is said to enable the manufacturers to test Ethiopian market from two to five years. During this time they are expected to open a factory or leave the market.
The scheme dictates, Ethiopian Textile Industry Development Institute (TIDI) should be presented with a proposal which it will evaluate and make a recommendation to the Ministry of Industry (MoI). It is the Ministry that will give the final approval for the company that requested to be involved in the bonded warehouse transaction.
Eksoy has finalized all these requirements and it is only waiting to be licensed by the Ethiopian Revenue and Customs Authority (ERCA). It has acquired a warehouse around Kality that has a total area of 1,000 square meters. The warehouse has a stake in the chemicals and dyestuffs to be stored in the warehouses.
ERCA will supervise the products that are imported and stored at the warehouse. The stored items will be handled by Eksoy and ERCA; both doing the follow up of the transaction of the products.
Hadgu Araya, a representative of the Company, noted the first batch of Eskoy’s products are being imported and they will reach in two weeks time.
According to the representative, Eksoy secured its license with an initial capital of one million Birr and is set to hold a stock of chemicals worth eight to 10 million Br, depending on the demand of the market. He added the factory could be opened in three years time.
Yared Mesfin, marketing director at TIDI, noted “The scheme provides the manufacturers with the opportunity to test the market and build confidence”. “Then they are required to establish a manufacturing company within two to five years.”
Eksoy is the second company to engage in such transactions. The first was Bezema Dyestuffs & Chemical, a Swiss based company. Bezema has been supplying chemicals and dyestuffs through its warehouse in the Jemo area and its outlet in Lafto since September 2012.
Source: Fortune
