BY GIRMACHEW GASHAW
Badawi Ali is a Sudanese Chemical Engineer. He is now engaged in manufacturing of engine oil, lubricants and grease here in Ethiopia. After graduating in Chemical Engineering he was employed as a lubricant and grease engineer by a company that invested in Ethiopia in 2013. He was the manager of this company we established the company around Sendafa. After resigning from that company he opened in 2021. Now the products of his company are entering the Ethiopia market. Badawi also aspires to increase the production and productivity of his company so as to extend his market outside Ethiopia and benefit from export opportunities.
Badawi says the government should encourage the production of the lubricant and grease production at home for many reasons. One of the main reasons is that it can save about 60 % of the foreign currency that the country is spending every year for the import of these products. In his interview with The Ethiopian Herald recently he has some comments as to how the government should encourage foreign investors in the country. Enjoy reading!
Could you tell us how you managed to join the work of investment?
I like this country and I feel something like I am Habesha, I’m feeling that because when you go the road when you go the market no one knows you are Ethiopian or Sudanese. When you are talking, after that they will understand. Even sometimes they do not understand that you are foreigners so you are as a tribal you can’t just become very good when they ask you are from that tribe. No, I’m not Ethiopian totally; So I wanted to be here after I resigned from the previous company. I want to be in the country that way I start to be in this country and I lived in this country. This is a major factor for me to be here and invest in Ethiopia.
Could you briefly tell us about the overall performance of your company in terms of producing and supplying various materials and how many Ethiopians are hired in your company?
Okay, now actually as you know our sector, the country here is no oil; so you are importing the input from outside. there is no challenge how to get hard currency to import the raw material to run your factory the main issue, this is a challenge make us not our capacity. When we start the capacity of this factory we have to have 100 people, they are Ethiopians, and no foreigners. Now we have 30 because we starting but the next year we are going to reach at least 80; this is our plan because we are going to do expansion and that’s why we’re going up right now. But the main issue for us is the input the factory, i.e. the hard currency.
Could you tell me about the production of the factory and its trend of performance?
Previously at the initial point yes, yes. When we started this in we started selling in September last year. This year we started to sell in grams and also 20 liters. Now, we have started selling one liter and 25 liter and 20 liters and also for one liters now we have more types and now also we are going to start the grease first time by half kg and now also we have new lines come from China for filling lines and also we have new plastic mold for five liters, four liters and three liters and all the types of the lubricant we are going to start to producing again this factory.
What kind of incentive do you benefit from what the government provides for investors?
Unfortunately we didn’t get and our sector does not get any support from the government. But the government is supporting those who import finished products of the lubricant. But they do not support the manufacturing of lubricants. I don’t know the reason but as we know as we came to register here and to make the manufacturing, we presupposed that anywhere in the world they are supporting the manufacturing because to import finished product and to import the raw materials is not the same. We are now employing 30 Ethiopians.
But I have other support for other factories that have 300 employees. For example now I’m buying the bottles plastic bottles from the plastic factory. These factories have employed more than 300 Ethiopians; so I’m supporting them. I’m buying packaging cardboards from the manufacturers here. I’m buying cartoon from local ones; I’m going to support the Ethiopians who is working that factory but who is bidding for finished product he brings sealed by cartoon finished there isn’t any support from anyone. That is the main issue for us and we hope the government to see us and to supporters for the sector as important sector. Even as you know, lubricant government they put the lubricant the fairest level with medical and the fuel.
If you get the assistance of the government how do you plan to expand this?
If there is any assistance from the government for these sectors it means you have to expand more and even we want to plan for exports because you can imagine now and for us who is able even to pay for customs are not the same. They support them more than us. Even it’s confusing as sometimes why they are doing that.
The finished product for example, they bring finished product everything with cartoon stickers, everything they are being 15 %. For us when we bring additives or whatever in brake fluid we have to pay 35 %. Say if the government help us for the artist, it is in our material it will be cheap, because we are bringing raw material and we plan for export to bring hard currency for the government, not just to take from the government.
Is your company exporting its produces? What is the business target and are things going as per your business plan?
I can’t say yes. But let me say yes. But we have reached 60 to 70 % of our plan. As I told you before we need to reach our expansion capacity, our plan will be 10,000 tons per year. See now with that at that point we are going to support for neighboring countries. Still within the startup that has told us that is suffering some challenge in front of us we have to solve that as well.
What sort of mechanisms has your company applied to ensure or to produce quality products that are competitive in the international market?
Our company is using just the varying oil is the main issue for the lubricant. As you know there is the recycling oil. It is important on the original oil company is working by that is one. For us as we have American Petroleum Institute’s we have certificate from America Petroleum Institute, this highest Institute in the world. We have that certificate. And just we are using the virgin oil, first virgin oil group two and group three. And our additives are come from the international companies in the world. That is all enough about the quality maybe for us. And we entered was asked you told us there is some challenge in front of us, but about the quality we have the American Petroleum Institute certificate.
So are you exporting your products?
No, not yet. But we have been to South Sudan actually already engaged, and Somaliland. We get engaged as a company, and we are going to export there. Actually, there is a chance that we can enter there. And we can enter the market. And already we agree to this one guy is going to take the material.
By investing in Ethiopia, what challenges have you and your business been facing?
Let me tell you for the law on investment in Ethiopia is so nice, really depends on the area. The law how to invest, the procedure to get license is mostly nice. Just if there opinion for investment in Ethiopia, just for immigration issues they are not pushing them. For example, other countries who is invest more than USD 200, 300,000 1 million, even they have one incentive in the immigration up to get the passport of the country.
But here if you are investor, if you are labor, every year, you have to come to renew your ID. And this I think is not fair. Even there is new law in the way who is invest more than 1 million he has ID up to 10 years one time he has to renew ten years. It is not Golden ID. They have to do like this to make more appreciate for the other consumers or investors to feel you are not like investor and labor annually they have to go to immigration to renew their ID. It’s not fair.
Have you ever faced challenges due to foreign currency and taxation?
Foreign currency is one issue. And as I told you the government procedures also for the custom issue also this challenge for us. And also for input for the manufacturing sector. There is probably for example, the high quality of the packaging box labeling and the sealing … it is not available and you have to bring from outside and government procedure, these are the challenges, others are okay.
What message do you have for investors who aspire to invest in Ethiopia?
For example now Ethiopia is so nice if you are going to invest in sectors that agriculture, real estate, I think this too much is good even especially who’s manufacturing for local materials not like us for example manufacturing for the agriculture materials for that is where it’s so nice I tell them you have to come now, Don’t wait up to tomorrow.
Some investors look for additional opportunities for investment and export. In this regard, have you seen other investment options here?
I know actually even in Sudan there is a work here with an Emirati partner for flowers; they export to Dubai, so nice. It is actually business. They are doing that zone last Saturday because they don’t have product to get hard currency. They can also do here as they have more seeds. This has no nuts as he’s saying there is input is available. Also soap because you can use animal fat like that you can also there’s more types they can do on it.
What kind of linkage do you have with other factories that could use your products or bi products as an input?
For example for us we don’t have that type because our manufacturing is blending and all this is going to packaging, but for example like chemicals or soap or what is named hydroxide of sodium like that’s what there is bi product. They can use it for other issue for example for the deployed when it comes to import from Malaysia or Ukraine there is some crude oil, you bring that paper they can use it in the soap. There is one guy who has to do also soap factory.
How does your company prevent the possible pollution of the environment as an outcome of the production of your items?
The good thing is the population here our area and this as I said before, we are mixing and filling we don’t have byproducts and we are not using otter for our manufacturing just a plus one plus two can say equals three or one and two three there is no other thing on all it is healing aren’t we have policy for environmental case already we have an impact assessment where the impact assessment already we did and indicated here in the government about the issue and they came as a check it and everything.
Finally, if there is any important point you want to raise please take the chance.
Let me tell you about our sector. It is expensive materials. As you know the country is undergoing shortage of hard currency. SO the government has to save the out flow of hard currency. What message I can send for government is to support this manufacturing sector. We are five manufacturing sector in this country. If you support that, you are going to save 60% from the consumption of lubricant oil. For us 60% is huge, may be $1 billion dollar for this sector. We are waiting for that support for us, and for the government.
THE ETHIOPIAN HERALD SATURDAY 17 JUNE 2023
