Farmers’ Co-Op Union Starts Making PP Sacks

Addis Fortune (Addis Ababa)

Elias Gebreselassie

13 June 2011

The Becho Weliso Farmers’ Cooperative Union (BWFCU) became the first union to start manufacturing multipurpose sacks that can be used for various types of cereals and grains.

The polypropylene (PP) sack factory, which was constructed at a cost of 21.7 million Br on a 2,777sqm plot of land, 80km west of Addis Abeba, in Tulu Bolo Town of Southwest Shoa Zone, Oromia Regional State, was inaugurated on Sunday, June 5, 2011.

“The opening of these kinds of factories will help farmers reduce the money and time it cost them trying to find sacks for their produce, as there is a shortage in the market,” Yaregal Aysheshum, director general of the Federal Cooperative Agency, told Fortune. “They would also save foreign exchange as most of the sacks are currently imported.”

The factory has the capacity to produce 80,000 sacks daily, but has not been producing at full capacity this past week.

The factory is provided with 380KV from the Ethiopia Electric Power Corp (EEPCo), but a congestion of electricity in the transmission line around the area has decreased our power supply during the day,” Dejene Hirpa, general manager of BWFCU, told Fortune. “We have been using only 340KV of power during the day, forcing us to work at just above 50pc of our capacity, producing around 45,000 sacks daily.”

EEPCo is building a new transmission line, which would solve the problem, according to the general manager.

An additional 1,423sqm situated adjacent to the factory will be used to warehouse raw materials and the completed PP sacks, which are made from a by-product of petroleum, according to the general manager of BWFCU, which was founded in June 2000, with a capital of 140,000 Br.

“We spent 13.5 million Br on importing the machinery from Yang Fang International Co in China, while 8.2 million Br was spent on the construction work done by Tadesse Adugna General Contractor Co,” Dejene told Fortune.

The BWFCU, one of the 107 farmers’ cooperative unions in Oromia Regional State, now has a total capital of 33 million Br. It consists of 48 farmers’ cooperatives with a membership of 62,000 individuals, with another four in the process of joining, according to Dejene.

The factory plans to increase it current staff of 133 to 289, once it becomes fully operational and is producing the sacks.

Yet, yarn sacks are currently used to export coffee, the country’s foremost export commodity. Over the past 10 months, Ethiopia has earned 633.6 million dollars from the export of 158,195tn of coffee.

“Before coffee can be packed into PP sacks, it would have to be tested and certified by the Ministry of Agriculture (MoA) that the chemicals used in the production of the sacks do not adversely affect the taste of coffee,” said Beker Shale, head of Oromia Cooperative Agency. “Yet, some coffee exporters have shown an interest in the sack.”

“We are in negotiation with three farmers’ cooperative unions that are installing flour factories to supply them with sacks as well as with Meki-Batu Select Seeds Reproducing Agency and Oromia Select Seed Reproducing Agency,” Dejene told Fortune.

The three farmers’ cooperative unions are Ambo Farmers’ Cooperative Union and Etosa Farmers’ Cooperative Union, both in Oromia Regional State, as well as Licha Hadya Farmers’ Cooperative Union in Southern Regional State.

Yaregal sees the cooperative unions putting up factories in the regions as a good thing.

“It proves that industrial development has not been confined to the cities but is also taking place in the countryside,” he said.

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