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 of land with all necessary infrastructure such as roads, water, electricity, telephone, and other services. LEOS is committed to producing and delivering refined edible oil that is cholesterol-free; organically sourced for a healthy life; high quality in taste, colour, content, and packaging; and competitive in the market. Operating from Bishoftu in the Oromia region of Ethiopia, and 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 objective of the CASA partnership with LEOS Edible Oil and Soya Products is to address bottlenecks in the soybean value chain and strengthen supply linkages with smallholder farmers and farmers’ cooperatives. This will be achieved through a contract farming model, which is expected to contribute to adaptive capacity, and resilience to climate change for smallholder farmers through creating sustainable market and increase income, and adoption of improved and climate smart technology (e.g., draught resistant seeds and rhizobium inoculant). The project will also leverage financial support from institutions for working capital for the processor.

Running from March 2024 through December 2025, the total project cost of £111,400 includes CASA’s £47,800 technical assistance and grant contribution. Each of the 4,000 smallholder farmers (40% women) reached (with two farmers’ cooperative unions) are expected to increase their annual incomes by £100.

This partnership will enhance the enterprise’s ability to source increased volumes of soybeans at fair prices directly from smallholder farmers through their cooperative unions/cooperatives. This contract farming model enables the company to stock produce during pick harvesting season to ensure year-round processing and improve the operation capacity of the plant. 

The model will start as a pilot and be scaled up gradually, increasing the number of farmers and the volume of soybean production and supply with LEOS’s increased investment. Through this contract farming scheme, LEOS will serve as a crucial link between soybean production and markets, supported by various stakeholders and involving intensive interactions with public and private institutions, which is time- and resource-intensive. Consequently, LEOS will collaborate with CASA to facilitate these linkages and reduce the time and financial burden required to establish the model in the 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. This strategic initiative aims to enhance operational efficiency and meet the growing demand for high-quality soybean derivatives in various markets. By leveraging advanced processing technologies, the company seeks to engage in equity financing to become a leader in the soybean industry, contributing to sustainable agricultural practices while delivering superior value to consumers.

Updated: January 2025