ETHIOPIA – Ahadukes Food Products Plc, an Ethiopia-based biscuits maker has halted operations due to a tangled web of tax disputes and a backlog of electricity bills, the executives have reported.
“Economic challenges from the onset tangled us,” conceded Esubalew Kefale, general manager of Ahadukes Plc.
The company closed its doors a month ago following a final notice issued by the company.
Based in the town of Bishoftu (Debre Zeit), Oromia Regional State, Ahadukes set its roots in 2015 with a promising vision.
With an initial investment of three million dollars, Ahadukes planned to churn out 12,000 cartons of biscuits daily, boasting a product lineup that included local brands such as Bourbon, Marie Gold, Ginger Crunch and Tiger Creams.
However, the biscuit maker has faced economic setbacks coupled with foreign exchange crunches and input shortages.
Federal and regional tax authorities claim close to 47 million Br (US$5=825,000) in taxes, including three million Birr claimed by the Bishoftu municipality, six million Birr for electricity bills and 38.6 million Br owed to the federal tax agency.
Melaku Taye, communications director at the Electric Utility, expressed regret at the Company’s perpetual lag for the past two years, leading to the drastic measure of cutting off power.
“The power outage, a consequence of unpaid bills, was a final blow after years of notices and frozen bank accounts.”
According to Betru Niguse, tax-debt monitoring team coordinator at the Medium Taxpayer’s Office under the Ministry of Revenues, the Company terminated its operations due to a cascade of notices and the freezing of its bank accounts last year, after it failed to fulfil its tax obligation due for five years.
He disclosed that the last notice was issued two months ago, which had led to the suspension of production.
Esubalew, however, defended the Company’s actions, recalling the difficulty of making payments, citing operational and external factors limiting its operations 40pc lower than its capacity. According to him, settling outstanding payments became a thorny issue.
While the head of the Company remains upbeat about negotiations with tax authorities to settle dues and resume operations, the uncertainty looms large for the 372-strong workforce.
The workers, who remained inadequately informed about the fate of their employer, are now left with the looming fear of permanent closure.
Ahadukes’ struggles mirror the plight of many manufacturers facing working capital constraints, extremely limited access to forex, and external shocks in Ethiopia.
Experts are therefore calling for a comprehensive review of the manufacturing sector’s plights to rescue the industry.
For all the latest grains industry news from Africa, the Middle East, and the World, subscribe to our weekly NEWSLETTERS, follow us on LinkedIn, and subscribe to our YouTube channel.
