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The National Tobacco Enterprise (NTE) has cut down
on its production of the Nyala brand after
discovering that the aluminium foil supplied to it
by a Chinese company was substandard.
The supply was made on October 16, 2009, by Shanghai
Awaki International, which had won the tender
floated by the enterprise six months ago.
“The five samples the company sent for the
competition were acceptable,” said Ketsela Shewarega,
procurement department head. “However, the supply it
made, worth 250,000 dollars was below the standard
we specified.”
He said that this has forced the enterprise to cut
down production by half. Its daily production used
to be 850 cartons of Nyala cigarettes, each
containing 10,000 pieces. Now this is down to just
400 cartons.
“We are trying to work this situation out with the
company,” Kestela said. “If that fails, we will
return to our former suppliers.”
Kestela said that the
management of the Chinese company has been in Addis
Abeba since Wednesday, November 4, and the two sides
have been holding talks on the problem.
NTE had been using
packaging materials supplied by European companies.
The Enterprise floated the new tender six months ago
to select the company that would supply these
materials to it for the next three years. It
compared samples and prices from various bidders and
picked the Chinese company.
The aluminium protects the cigarettes from moisture
and retains the original flavour.
“The problem is serious because we have not been
able to hold stock due to the lack of foreign
exchange,” Ketsela said.
The enterprise is also worried because this problem
is going to be reflected on its financial statement,
which it produces based on the Gregorian calendar.
NTE boasts that its
productivity and profits are progressively growing.
In 2008 its production costs were 154 million Br,
whereas its sales amounted to 652 million Br. That
year it had a net profit before tax of 138.9 million
Br. Its figures of production, productivity, sales
and profits have been progressively growing since
1985, when its total sales and profits were 178.7
million Br and 17.8 million Br, respectively. The
enterprise claims 64pc of the tobacco market in the
country with its own products, Rothmans and
Marlboro, which it imports. It being the sole legal
importer of cigarettes, the rest of the market is
dominated by smuggled brands.
It is now preparing to release a new brand called
Nyala Premium in January 2010.
“We hope that smokers will love it,” Ketesela said.
This brand was expected to go to the market by the
middle of 2009. Gizachew Hagos, general manager of
the enterprise, had said in a message published on
NTE’s magazine in March 2009 that the enterprise’s
experience in launching the Delight brand had made
them cautious on their efforts to launch the Nyala
Premium.
The enterprise grows 30pc of the Virginia tobacco
leaves it requires from its own farms at Shewa Robit
and Bilate. It imports the remaining 70pc. |
