The Turkish company, Eksoy Chemical Industries Ltd, follows suit to the Bezema Dyestuffs & Chemical, a Swiss based company, which has been supplying various chemical and dyestuffs to the local textile manufacturers through its warehouse in the Jemo area and its outlet in Lafto since September 2012.

It has introduced the bonded warehouse scheme in Ethiopia for the supply of textile firms. This scheme is available for chemical manufacturers outside Ethiopia. They can have their products in a bonded warehouse, from where the customs clearing will take place as the products are sold. This is supposed to enable them to test the domestic market for two to five years, during which time they will be expected to open a factory in Ethiopia or leave.

Based on the scheme, the companies that have already secured a permit from the Ethiopian Investment Commission (EIC) to undertake the trading will import and store the products in bonded warehouses under the supervision of the ERCA. The stored items will be handled by Eksoy and the customs authority, and both will follow the transaction of the products

Yared Mesfin, marketing director at the Ethiopian Textile Industry Development Institute (TIDI), says that the manufacturer's proposal is evaluated by the TIDI, which makes a recommendation to the Ministry of Industry (MoI). The Ministry of Industry gives approval for companies to be involved in the bonded warehouse transaction. They get their trade and investment licenses and customs certificate after that.

The scheme provides the manufacturers with the opportunity to test the market and build confidence. Then they are required to establish a manufacturing company within two to five years.

Eksoy has finalized all the requirements to be licensed by the Ethiopian Revenue & Customs Authority (ERCA), which is basically the last requirement to begin the import and distribution of all sorts of chemicals and dyestuffs necessary in the production process of textiles.

It has renovated a warehouse leased around Kality, with a total area of 1,000sqm, in accordance with the specifications set by the ERCA, which has a stake in the chemicals and dyestuffs to be stored in the warehouses.

Eksoy had to make adjustments to its warehouse based on comments from experts at ERCA, Hadgu Araya, a representative of the Company said that we are in the final stage and will secure the customs certificate within a week.

Left with the last go-ahead from the ERCA, the Company has made arrangements for the importation of the first batch of its chemicals and dyestuffs to arrive in two weeks time, according to Araya.

The Company has secured its license with an initial capital of one million Birr and is set to hold a stock of chemicals worth eight to 10 million Br, depending on the demand of the market, he says. The Company could open the factory in three years' time.