Nas Foods Plc. has started a 50 million Br expansion project in its plan to produce 20,000 cartons of biscuits a day from its current production of 8,000 per day. Of these, five thousand will be a new product called "Choco Wafer".
 

Nas Foods is in the process of importing machinery from Italy and will begin construction adjacent to the present factory located in Legetafo, in the Oromia region, 19km northeast of Addis Abeba, which has an area of 27,500sqm.
 

Construction and installation for the expansion project will be ready for operation in January 2007.
 

Like many major construction projects recently, Nas Foods had to face the cement shortage for their project. 
 

"The only constraint we have had is the problem of waiting for cement," said Kadra Hassen, executive director of the company. "Even after the long wait for our official supply, we still did not get enough cement."
 

According to a current feasibility study done on the overall biscuit market in the country, there is a 50,000tn annual demand. The market provides 35,000 to 40,000tn, including imports, leaving a 15pc demand gap.

The expansion project aims to fill this gap and export the rest to the Common Market for Eastern and Southern Africa (COMESA) countries.
 

An official in the Ministry of Trade and Industry told Fortune he was not so sure about the complete feasibility of the company's scheme.
 

"As Ethiopia has not signed an economic agreement with COMESA , it might be difficult for them to profitably export there," he said.

But Sudan remains a safe bet, he acknowledged, as Ethiopia enjoys a zero tariff agreement with its Western neighbour.
 

Yifru Tafesse, marketing manager at Nas Foods told Fortune that his company enjoys a 35pc market share in the industry. Though that figure could not be independently confirmed, sources at competitor KAO.JJ Biscuit and Flour Mill factory said that Nas Foods is the unquestioned industry leader, though other companies may predate them in the market.

According to sources in the Trade Ministry, there are 12 active biscuit factories and six more in the pipeline.

Nas Foods was established in 1996 with a 42 million Br investment. Currently, Nas Foods has 30 biscuit varieties for the local market with a prices ranging between 0.25 Br to 2 Br per packet.