Ambo Mineral Water ShortageThe ongoing power crisis coupled with generator problems caused Ambo Mineral Water Factory to totally halt production for seven days two weeks ago.
Almost immediately, the cessation caused the price of mineral water to triple in Ethiopia’s major cities, Capital learnt.
A source in the sales department of the factory
told Capital that ever since the Ethiopian Electric Power Corporation (EEPCo) introduced power rationing, the factory was producing at one third of its full capacity of 240,000 bottles per day using diesel generator. The generator is only able to supply enough electricity to power a single line of the factory’s production machinery, and has also suffered a breakdown itself: “A technical problem a week ago with the generator that kept alive production for the last few months has contributed to hiking the price,” a source said.
Previously, the price of a single crate - 24 bottles - was 38 birr, which dealers distributed for approximately 45 birr to users. But since the production decrease two months ago, dealers have been distributing crates for around 70 birr. For the consumer this has meant a hike from the regular price of five birr to 16 birr for a bottle.
According to another anonymous source, EEPCo has given permission for the company to use power every other day from last Monday.
A further additional factor causing the delays is unrelated to power problems, as three weeks ago Italian Agapti Company started maintenance work on the second production line of the factory. This work should be completed in the next week.
According to the sales source, the company has distributed a root card - which contains information about their quotas - for dealers in an attempt to manage the distribution fairly.
“But the demand has a big gap than the current supply, which make it difficult to control the dealers who sold the products over the price,” he explained. However, the factory is distributing its product for big hotels as usual, a source said.
Ambo Mineral Water Factory, located 130 kilometres west of Addis Ababa in Ambo, was established 77 years ago and controls over 85 per cent of the mineral water market in Ethiopia. A year ago the state Privatization and Public Enterprises Supervisory Agency (PPESA) and a company based in South Africa, SABMiller Beverage, negotiated to acquire the company jointly. As agreed between the two parties, factory expansion work by Crones, a German firm commenced a week ago. When the expansion is completed the production capacity of the factory will double to just less than half a million bottles per day.
Ambo is exporting its product in US, Saudi Arabia, Australia and Djibouti.
The other previously state owned mineral water plant, Babile Mineral Water Factory, is located 526km east of Addis in the Harari Regional State and was sold to local company Petram Plc in March 2007. Petram bought the factory for 6.5 million birr.
SAB Miller is one of the world’s largest brewers and includes among its products international beers such as Pilsner Urquell, Peroni Nastro Azzurro and Miller Genuine Draft, as well as range of South African brands such as Aguila, Miller Lite, Snow and Tyskie. It is also one of the largest bottlers of Coca-Cola products in the world.
The state-owned electric power producer requested industries to halt their production until the hydro power electricity generation improved with the coming of the rainy season. Most industries are using diesel generated power to continue their business while they wait for the green light from EEPCo to resume business as usual.
The situation is contributing to inflating the price of goods and services in the country, particularly in Addis Ababa.
Friday, Jul 30th
Last update:06:01:06 AM GMT
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