The Ministry of Industry in Ethiopia has directed cement factories to exclude agents from the market network ,and sell the product directly, according to Addis Standard.
In a letter dispatched to 10 cement factories, the ministry asked the factories to indicate in a letter the names and number of agents they had excluded. State Trade Minister, Hassen Mohammed, told the news outlet that the ministry is working to shorten the commercial chain, adding that agents were one of the reasons for the stretching of the commerce chain and were not supported by law. He underscored that the ministry would enforce strict measures against cement factories still employing agents for distribution from now onwards.
The minister stated that to observe and regulate the market processes, the ministry has ordered cement plants to provide information as to their production and distribution lines over the past nine months. Mr Hassen noted that cement commerce would operate on a non-interference basis whereby wholesalers would acquire it directly from the factories. He, however, said that governmental development organisations and other governmental projects would be regarded differently.
It was also stated that agents have been selling the cement to wholesalers at increased prices, causing long chains of commerce and impacting the final customer to purchase at three times more expensive than when it left the factory. A Ministry of Industry, Ethiopian Investment Commission and the Ministry of Trade study revealed that agents were operating on family networks with the factories, and sometimes the factories themselves are behind the agents themselves.
