This paper is focused on increasing the power quality of Unique Macaroni factory, located in Bahir Dar Town. Necessary data have been collected from the factory and the collected data are analysed. Based on the analysis of data, it is found that the factory working power factor is low and hovering around 0.7125. Voltage variations are up to 9.09%, average voltage unbalance is 2.2% and total harmonic distortion (THD) of load currents and voltage are 24.17% and 10.16%, respectively. Harmonic

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... nents have existed in the power distribution system of the factory. Based on the analysis of power quality problem in the factory, distribution static compensator (DSTATCOM) and its control system have been designed to boost power quality of the factory and the results are obtained by generating simulations using Matlab software. It is observed from outputs of the Matlab simulations that DSTATCOM can improve the power quality of the factory. Generally, the shape of the waveform of load voltage and current is improved and THD level of load voltage is minimised to 1.55% and load current THD level is 7.09%. The reactive power needed by the loads (442 kVAr) is almost provided by the DSTATCOM, so reactive power from source supply is very small such as 22 kVAr so that the power factor of the source tends to unity.