Rules hinder local company from competing with imports

A pipe factory in Amhara is experiencing chronic difficulties competing in the local market because its products cost 20 percent more than imported ones.
Ethiopia was hoping to stop the 100 percent of imports by agricultural firms by producing three layers of greenhouses. However, taxes for importing raw material and 15 the percent Value-Added (vat) sales tax makes their products expensive and hinders them from competing with foreign imports.
‘We encounter a big challenge in the market as our quality greenhouse material price is higher than imported ones,” said Adam Dawed General Manager of Amhara Pipe Factory.
According to the manager, power cutoffs during production incur a high production cost, shortage of foreign currency also makes human resources and machines idle.
Established in 2016, the Amhara Pipe Factory is based in Bahir Dar – the Amhara region’s capital with the majority of share holders by Amhara Regional State and the Golden Trade Company Egyptian-American investors’ with17.8 million USD paid up capital.
The factory produces Agricultural films (greenhouse films) Geo-membrane sheets, HDPE pipes. U PVC pipes and rigid conduct, borehole casing, and screening and also delivers tubes for irrigation and construction.
The factory manufactures greenhouse films with 50 microns up 200 microns with up to 14-meter width and 200-meter length.
In Ethiopia greenhouses are used often in flori-agriculture and by fruit and vegetable farms and used by over 13 commercial farms, though the product has a higher price when compared to imported greenhouse film.
According to some research, producing in the greenhouse film is said to boost productivity by 50 percent and makes all plants grow uniformly.
The Amhara Pipe Factory has the actual capacity of producing 8,640 metric tones per annum, the factory uses only 25 percent of its production capacity. The factory employs 300 people.
“We hope that there will be a good market in African countries when the Continental Free Trade Agreement is implemented,” adds the manager.
Currently the flower, fruit, vegetable, and herb farms occupy 10,897.21hectars of land run by 19 operators engaged in large scale and modern fruit production.
At present, there are 31 vegetable exporting farms throughout the country. These farms produce a wide variety of vegetables including green beans, snow peas, tomatoes, paprika, eggplant, baby corn, & onions.
Presently there are 72 active flower farms and Ethiopia is the second largest flower producer and exporter next to Kenya in Africa.