
AADCO started as a small paper manufacturer an is now becoming a into a major industry player, contributing to job creation, economic development, and environmental sustainability in Somaliland.
AADCO Paper Factory, established in 2013 in Hargeisa, Somaliland, has played a pivotal role in the local manufacturing industry by producing essential paper products. The company manufactures exercise books, project books, sellotape, printing paper, and egg trays using recycled materials. With a vision to reduce import dependency and create local job opportunities, AADCO has steadily grown over the years. However, the real transformation began in 2019 when the company secured a Murabaha investment of $499,600 from Shuraako. This funding marked the beginning of a new phase of expansion, leading to remarkable achievements in job creation, economic growth, and environmental sustainability.
Expansion and Job Creation
Before receiving financing from Shuraako, AADCO had limited production capacity and a smaller workforce. However, with the investment, the company was able to double its production capacity and expand its operations significantly, resulting in:
• Staff Growth: AADCO created approximately 30 new jobs, predominantly permanent positions, thereby increasing employment opportunities for the local community.
• Production Capacity: The factory’s output doubled, allowing the company to meet growing local demand and compete effectively in the regional market.
Economic Growth and Market Expansion
One of the most significant outcomes of the investment was AADCO’s expansion into new markets. Initially, the company’s products were only available in Somaliland. However, with the additional funding, AADCO successfully extended its reach across the Somali region and into neighboring countries. This market expansion aided in:
• Sales Growth: AADCO experienced a substantial increase in sales, driven by higher production capacity and wider market penetration.
• New Products & Import Substitution: The funding enabled the introduction of new products, including, Sellotapes, business diaries and notebooks. Additionally, the company launched an egg tray production line, which has been crucial in replacing imports from the UAE and China.
Environmental Sustainability
Prior to the investment, AADCO faced a challenge with wastepaper disposal, often resorting to burning, which contributed to environmental pollution. The Nordic Fund field team recommended an environmentally friendly solution, leading AADCO to establish an egg tray production line. This initiative has solved some other problems such as:
• Factory Waste: The factory now recycles wastepaper to manufacture egg trays, eliminating the need for waste incineration.
• Environmental Impact: By implementing a closed-loop recycling system, AADCO conserves water and promotes sustainable waste management.
• External Dependency: Local poultry farms in Somaliland and Puntland now have a reliable, locally produced alternative to imported egg trays, reducing costs and dependency on foreign suppliers.
Why Shuraako?
AADCO chose Shuraako for financing because of the competitive Murabaha service charges and five year repayment option. This decision not only provided financial relief but also unlocked greater benefits than anticipated. Reflecting on this partnership, AADCO’s General Manager, Mohamoud Abdilaahi, says:
“Shuraako’s investment allowed us to scale our business beyond what we had initially envisioned. We are extremely grateful for their support, and we encourage other businesses in need of financing to explore Shuraako’s services.”
The success of AADCO exemplifies the impact that well-structured investments can have on businesses, communities, and the broader economy. With continued growth and innovation, AADCO will be able to further expand its market presence and continue making a positive impact in the region.
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