A year ago, BASF, a German multinational chemical company and the largest chemical producer in the world, through its blossoming business stated that the first seeds produced at BASF’s state-of-the-art production facility in Ethiopia entered the global vegetable seed markets. The facility built offered an ideal year-round production conditions for sweet pepper, tomato and cucumber and was BASF’s first high-tech greenhouse complex in Africa.
Following a similar culture of easing business for the Ethiopian market and the region, BASF has opened a Djibouti base, which is very beneficial to its customers in the region, more so Ethiopia. Capital’s Editor-In-Chief, Groum Abate, caught up with Gift Mbaya, Business Lead and General Manager BASF Trade Representative Office, for insights on what this new endeavor means to the firm’s customers. Excerpts;
Capital: You recently set up an office in Djibouti. How has that helped your business with the Ethiopian Market?
Gift Mbaya: Setting up a base in Djibouti has been very beneficial for our Ethiopian market. It has given more access to our customers to get our products, thus helping to bridge the gap between BASF Europe and Ethiopia. Furthermore, the office that has been set up takes ownership and responsibility for the full customer order import and export management process into Ethiopia.
The Djibouti office offers seamless transactions where prior to that, customers had found it difficult in terms of the length of time it took to provide supply as well as availability and access to products.
Currently, the office in Djibouti is responsible to manage the customer order export process from the Djibouti Port, in and out of the Free Trade Zone at efficient, timely and satisfaction levels. In addition, it manages and coordinates all activities for inbound/outbound and logistics operations for Ethiopia.
At the end of the day, this whole project came to fruition in order to make it easy for customers to do business with BASF.
Capital: How in particular does it make it easier for the Ethiopian customers?
Gift Mbaya: For customers who are buying products from Europe usually takes a longer time to get to Ethiopia. Thus, BASF Djibouti will buy from BASF Europe and bring the product to Djibouti. Thus Ethiopian customers can get their products at a quicker and easier way, without going through the traditional longer route.
Capital: Are you going to assist customers on opening up LCs to access your product? If so, how are you going to do that?
Gift Mbaya: We will assist them in terms of the paperwork. But the issue of raising LC between Ethiopia and Europe or Ethiopia and Djibouti will remain the same.
Capital: How would you evaluate the current foreign exchange shortage with regards to its effect to your business?
Gift Mbaya: Because of the foreign currency shortages our customers are not buying as much products as they can. This might not be due to unavailability of the product but rather shortage of currency which can control the purchasing power.
And as BASF Djibouti, we are here to assist, for example, customers who used to buy full container loads from Europe, but have seen sudden decrease owing to foreign currency shortage struggles. Such customers stand to benefit since through Djibouti they can buy little product loads at the various different frequency that they require.
This will also enhance the cash flow of the customers since you won’t be put at a point of spending all the eggs in one basket, and since the quantities are purchased in birr, saving on your cash can mean customers can use the cash for their factories for future longevity.
Capital: How do you assess business in Ethiopia? Is there potential for growth?
Gift Mbaya: Ethiopia is the place to be and as far as BASF is concerned business is thriving with room for potential growth. Our field of business enables industrialization, which the government of Ethiopia is advocating and promoting.
In recent weeks stories have been published showing that Government wants to increase its efforts in industrialization; in addition to wanting to increase wheat production by over 70%; to which we can participate in. To this end, we want to participate in helping our farmers grow more so as to make Ethiopia self-sufficient.
With the increasing population of Ethiopia, the market is therefore for all of us to grow and if we map that to the manufacturing industry stance, we notice that they equally want to grow, thus the potential growth of business is limitless. We see manufacturers wanting to grow and improve their production, and we can partner with them in such through capacity building and working in partnership in areas of mutual interest.
Capital: How is BASF’s seed business progressing?
Gift Mbaya: The seed business, which we’ve been part of from four years back is an investment that is doing well. We have a production facility now, where we are growing seeds of peppers, cucumbers, tomatoes. This can be noted as a visible investment which brings innovation into the country, to which the country then benefits because of the export to Europe and ultimately to global distribution reach. Overall, the project is reeling in positive results.
Capital: Do you have any other new projects?
Gift Mbaya: Not at the moment, but we’re expanding our product ranges. BASF is one potential of 85 different business units globally. And right now in Ethiopia we’re dealing with about 12 or 13 of those. We want to expand that because we are interacting with a lot of customers who have expressed interest in our products.
So as we find new business opportunities for them, we want to expand our base. Right now we are into agriculture, pharmaceuticals, home and personal care business, leather business, polyurethanes for shoes, furniture, mattresses and pillows, human nutrition, and vitamins. To this regard we often say we are creating chemistry for a sustainable future.
Capital: Can you tell us about the kids’ Lab program?
Gift Mbaya: With the belief that students today can become innovators and leaders of tomorrow, BASF established Kids’ Lab in Germany in 1997 with the aim to nurture children’s interest in chemistry; and to help young generation recognize how chemistry around us can help protect the environment and create a sustainable future.
The BASF Kids’ Lab program is an interactive, fun and free chemistry education program designed for kids aged 6 to 12 years to discover the world of chemistry through simple and safe experiments. This program has been brought to more than 30 countries across the globe.
Here in Ethiopia we have gathered these kids in schools such as the German school where other schools are invited to be part of this initiative. To show them real life scientific works we take them to our customers who interact with them and give them inspiration through showcasing their various projects to build excitement in their ambitious hearts.
Within the program, we schedule two to three hours to create excitement around chemistry and lab works to spark their interest, so when they resume normal classes they can aspire to be scientists of tomorrow.
This program will continue to expand across Africa in order to propel and inspire innovations and harbor scientists of tomorrow.
Capital: Do you have plans on expanding to public schools?
Gift Mbaya: Working through the German school, our program is open to both public and private schools and we often do that by inviting students as well as staff from neighboring schools.
In order to conduct such activities in public schools, authorization is needed. To this end, we have been in talks with the Ministry of Education so as to provide these opportunities to a wider range of schools.
Capital: Is there anything you want to add?
Gift Mbaya: I think it’s a great time to be part of the business scene in Ethiopia, owing to the country’s commitment to expand and grow its various sectors. As BASF we see incredible potential in this country and we look forward to partnering and playing pivotal roles in improving the country in our own way. We also look forward to spearhead innovations through our work as well as continue to inspire the future generation.