LEOS Edible Oil and Soya Products is a private company established in 2014/15 with the objective of processing and producing refined edible oil. The processing plant is situated on a 20,000 m² plot in Bishoftu in the Oromia region of Ethiopia, with all necessary infrastructure. LEOS is committed to producing and delivering refined edible oil that is cholesterol-free and organically-sourced for a healthy life; high quality in taste, colour, content, and packaging; and competitive in the market. With 128 employees (including 45 women), the company promotes its products through various channels and contributes to the substitution of palm oil imports in the country.

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Contract Farming between LEOS and Farmers’ Cooperative Unions to Create Better Market Access for Smallholders with Storage Support during Harvesting Season

The purpose of the project was to demonstrate that an inclusive business model ensures a sustainable supply of raw material, attracts investment opportunities for LEOS and can be replicated by other oil processors. 

Running from April 2024 to June 2025, the project budget of £111,400 included CASA’s £47,800 technical assistance and grant contribution. The plan was to purchase soyabean from 4,000 contracted smallholder farmers (40% women) through farmers’ cooperative unions who, by selling their soyabean to LEOS, would increase their annual incomes by £100. This plan met with two challenges early on. Firstly, the 2023/4 season had seen an oversupply of soyabean with no secure market that led many farmers to switch to maize for the 2024/5 season. Secondly, the cooperative union took long to consider the contracting arrangement and eventually declined, causing LEOS to miss the planting season. Subsequently, aggregation contracts were signed directly with four cooperatives (members of the Jimma Union). The model started as a small pilot with 236 smallholders and will be scaled up gradually, increasing the number of farmers and the volume of soybean production and supply with LEOS’s increased investment.

With CASA technical assistance support to develop a robust business plan, LEOS secured an ETB 75m (£410,000) working capital loan from the Development Bank of Ethiopia for purchasing soyabean. However, because farmers had switched to maize production there was little soyabean in the Jimma area to be aggregated so the sourcing challenge has not yet been solved. LEOS is, however, in a good place for aggregation through cooperatives next season and farmers are encouraged to plant soyabean now that they have a secure market. 

The company’s vision includes expanding its oil processing factory dedicated to soybean seeds, with the goal of diversifying its product offerings to include a range of soybean-related products. The LEOS production manager noted that, “Though we are unable to collect soybeans as we expected, we have learned that contract farming is the only option for LEOS to thrive in the business. Yet it needs a dedicated effort to make it fruitful, as we had limitations in this regard. Soon we will have a sourcing department in the company to follow up on contract and supply contracts that we should be in.”

Updated: March 2026