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TURNING A DISTRIBUTION CHALLENGE INTO A BUSINESS OPPORTUNITY

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Located in the Horn of Africa, Ethiopia is home to 85 million people, making it the second most populous nation on the African continent.

Ethiopian Steel PLC was established in 1997 and for 14years (until last year), its sole operation was in Addis
Ababa – the company was unable to unlock the further potential of the market.The reason for this is that Ethiopian Steel is not Ethiopian owned and therefore, unlike locally-owned companies, is prevented by law from opening retail outlets outside its core production unit.

Out of these challenges arose the unique concept of Service Centres and Showrooms.Service Centres are small production facilities situated in market nodes outside the logistical reach of the mainproduction base in Addis Ababa. They produce for the market within immediate reach of their operation.

To increase local market awareness and offtake, Showrooms are located in high visibility cities and construction nodes. As Ethiopian Steel cannot ‘sell’ from these outlets, orders from the Showrooms are fed back to the closest Service Centre for manufacture and speedy delivery. The company also provides a delivery service to customers through appointed service providers.

A Field Sales Team is attached to each Showroom, to sell into surrounding construction areas. The team of trained
artisans (fundis) has experience in roofing and can also take roof measurements if required. The company plans to extend this service to include the drawing of roof-plans using an AutoCad facility located in the Showrooms.
One service centre and three showrooms are now open.Keeping its main plant in Addis, Ethiopian Steel recently
opened a Service Centre in Gondar and three more are planned for key regional states in Ethiopia. The first Showroom opened in November 2011 in Megenagna, near the Addis City centre. Two more Showrooms were opened in Adama and Lebu in Addis Ababa in 2012.

 

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