Factory closed due to shortage of FOREX.

Kaluworks Ltd, a company that produces different households in Ethiopia to shut down its factory because of shortage of hard currency that lead the factory in shortage of raw materials.
The company wrote a caution letter to Metal Industry Development Institute (MIDI) saying it did not get any foreign currency since July 2016 and can n not continue with a year by year loss.
The letter submitted to MIDI that Kaliti Press secured shows that the company’s management already decided to close the factory and over 250 employees will be sent on compulsory leave without pay beginning from next month.
Kaluworks Limited was set up in 1929 and is amongst the oldest companies in Kenya. In 1990 it extended its branch in Ethiopia.
Ethiopia’s foreign currency supply available for importers and travelers alike is increasingly facing chronic shortages. As the country’s foreign exchange provision plummets into a whirlpool, the parallel or black market for hard foreign currency (which has become a rare commodity), is thriving in the country.
These are trying days for any business in Ethiopia. The undeclared but frequent power shedding on top of credit crunch from the financial industry, not to mention the bureaucratic hassle, is testing the patience of many business owners.
The forex shortage is so critical that opening a Letter of Credit (LC) takes as long as one year or even more, and even then, there is no guarantee that the requested amount of foreign currency will be availed.
The shortage has now reached unbearable proportions. Not even the pharmaceutical importers, the last frontier to be deprived of access to Forex, can get approval from their respective banks to open letters of credit.

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