26 June 2014 News Round-Up


Authority to Construct Road to Interconnect Omo-Kuraz Sugar Factories


Authority to Construct Road to Interconnect Omo-Kuraz Sugar Factories

The Ethiopian Roads Authority here Wednesday signed contract agreement amounting to 2.5 billion Birr with the Chinese Communications Construction Company (CCCC) for construction of 102km road on Omo River.

The road project aimed at linking the six sugar factories under the Omo-Kuraz project with each other and main roads, Authority Director General Zaid Weldegebriel said.

The construction of the road to be finalized in three years, will be carried out in two phases. The first phase that covers 41.7km will run from the Omo no-6 junction to the junction to no-4.

Construction of a 200m bridge over the Omo River will be undertaken in this phase of the project expected to consume 108 billion Birr.

Up on completion within three years, the road will link people living in both sides of the river and the sugar factories with each other, Zaid said.

The second phase of the project that covers 60.6 will be carried out with an outlay of over 1.4 billion Birr. Construction of 157 small bridges will be carried out in this phase of the project, according to Zaid.

This road will interconnect the Omo no-4 and no-6 sugar factories with Hana- Jinka and Sawla Maji main roads.


Africa’s palm oil sector ‘faces monumental change’


The oil palm tree is coming home.

The palm oil industry in Africa, where the tree originated in freshwater swamps, is “on the cusp of monumental change”, Standard Chartered said, estimating that the continent could produce an extra 2.8m tonnes of the vegetable oil by 2030 – more than doubling current output.

The increase reflects in part the decreasing availability of land in the South East Asian countries, notably Indonesia and Malaysia, where the palm oil tree – whose scientific name of Elaeis guineensis suggesting suggest a West African origin – has thrived since being taken there by Dutch and British traders.

However, an extra incentive will come from growing consumption palm oil consumption in Africa, thanks to the continent’s growing and increasingly affluent population.

‘Set to boom’

Africa’s palm oil industry, whose output is currently “anaemic”, is “on the cusp of monumental change”,  Standard Chartered analyst Abah Ofon said.

“Africa’s edible oil market is set to boom,” growth which will “create tangible market opportunities” in the sector, and hand strong market shares to those quick to invest.

“Industry players – including concession owners, mill owners, consumers, policy makers and investors – can ride the crest of this wave of Africa’s burgeoning demand for crude palm oil.”

Supply vs demand

The pace of commercial palm plantings in Africa is “already picking up”, albeit from a low base, with output at 2.2m tonnes, on US Department of Agriculture data, from area estimated at perhaps 5m-7m hectares, but of which only 1.5m hectares the bank deemed “productive”.

Nonetheless, even with an increase in output of 2.8m tonnes, the sector would be unable by 2030 to meet local demand, seen soaring more than 60% to 8.2m tonnes by then.

That assumption rests in part on an estimate of per capita consumption of 7.2 kilogrammes of palm oil, up 40% from current levels, but still below the 7.7 kilogrammes in China and 8.8 kilogrammes in India.

Rising consumption means that only three African countries will be net exporters in 2030, with Liberia to show the biggest surplus, thanks to a 12-fold rise in production to 500,000 tonnes a year.

Gabon will also become a net palm exporter.

However, Ivory Coast, the continent’s only net exporter currently, will become a net importer “as consumption gathers pace”, with demand growth outpacing increases in output in Ghana, Nigeria and the Republic of Congo too.



East Africa Bottling to Replace Production Lines at the Cost of 30 Million


East Africa Bottling S.C. announced it is going to replace two of its production lines which are found in Addis Ababa at a cost of U.S $ 30 Million.

East Africa is undertaking aggressive expansion works which it called 2020 vision. The whole project is anticipated to double the production capacity of the current lines and cost the company U.S $ 500 Million.

The two lines that are announced to be replaced will be brand new lines with the latest technology. Commenting on this CEO of the company, Xavier Selga, said the new lines will use less energy and have greater efficiency with minimal environmental impact.

East Africa has already built two additional lines in Addis Ababa out of which one is dedicated to packaging the company’s products in plastic bottles. It is these two lines that raised East Africa’s number of production lines in Addis Ababa to five.

Replacement work has also been carried out by the company at it’s two of production lines in Dire Dawa. This is said to have enabled the company to increase its production from two million cases to seven million cases.

According to Selga East Africa is on the process of constructing a plant in Bahir Dar, which will be its third plant, at the cost of U.S $ 20 Million. He further noted, his company is waiting to officially inaugurate its new water product, Dasani, which it has already introduced.



Ethiopia’s First Oil Blending Plant to Start Production


Ethiopia’s first ever oil blending plant commenced production on Tuesday, June 24, 2014. The plant is erected by Naztech Petroleum Investment Group at the city of Galan in the Oromia State.

The oil blending plant is the first of series investments that are going to be made by Naztech in Ethiopia.

The plant is said to produce different lubricants using the latest standards of the American Petroleum Institute (API) and it is also in line with Ethiopia’s objectives of indigenizing its oil and gas industry.

Upon commencing production, Naztech is expected to produce passenger car lubricants, diesel engine oil-automotive, two stroke motor oil-automotive, automotive specialty, gear lubricants, industrial lubricants, greases and marine lubricants.



LIDI Stated Value-Added Leather and Leather Products Revenue Increasing


Ethiopian Leather Industry Development Institute (LIDI) proclaimed Ethiopia’s foreign currency revenue from export of value added leather and leather products has been growing.

During the 11 months of the current fiscal year Ethiopia has managed to collect U.S $ 122 Million from the export of leather and leather products. According to the Ethiopian News Agency the sum collected exceeds the same period of the previous year by 10 percent.

Birhanu Serjebo, the Institute’s Corporation Communication Director, said Ethiopia is following the path of exporting finished leather and leather products by adding values to them.

BIrhanu further noted Ethiopia has exported to different nations shoes, gloves and outfits made from leather, the dominant being shoes. Out of the total revenue over U.S $ 90 Million goes to finished leather products, he added.

According to the Director Ethiopia’s aim for this year was to collect U.S $ 347 Million from the sector. He attributed the failure to lack of modern raw leather and hide system.



Tana-Beles sugar project ‘on schedule’


Tana Beles sugar development project is progressing as per the schedule, the project consultant said.

Hassen Abdu (Eng.), representative of Acute Engineering, a local consulting firm, told WIC that civil works has been completed for two of the three sugar factories planned to be built under the Tana-Beles Sugar Development Project.

Ethiopian Sugar Corporation (ESC) expects the two sugar factories each with the capacity to crush 12,000 tcd (tons of cane per day) to go operational during the first months of 2015. The third factory is slated to go operational in the second phase of the Growth and Transformation Plan period (GTP II).

Adgeh Mekuria, deputy director general of the project, confirmed to WIC that the crushing plants will undergo testing in 12 months.

“We expect the factories to start producing sugar next year [Ethiopian calendar],” Adgeh said.

The crushing plants, currently under construction, are located in Amhara region some 576 km north of Addis Ababa. The project will cultivate 75 thousand hectares of land with sugarcane plantations. A portion of the plantation will be within the Benishangul Gumuz region.

At full capacity, the three sugar factories are expected to produce 726 thousand tons of sugar and 62.4 mln liters of ethanol from cane by-products.

The project will also offer seasonal and permanent job opportunities to over 69 thousand people, Adgeh said.

Currently, Ethiopia produces some 300,000 tons of sugar per annum while the demand for sugar stands at around 500,000 tons.

Ethiopia’s massive investment in sugar development projects across the country could see the nation produce 1.58 million tons of sugar annually by mid 2015, according to announcements made by the ESC in May this year.



Norway supports Ethiopia’s green economy development


Government of Norway made a 60 million dollar financial support to Ethiopia’s efforts of building green economy. The support will be used to forest development projects aimed at reducing carbon emission.

Belete Tafere, Minister for Environment and Forestry on the occasion noted that the financial support will have an important contribution to Ethiopia’s efforts to expand forest coverage with a view to build green economy and development of ecotourism.

Tine Sundtoft, Minister for Climate and Environment of Norway noted that Ethiopia and Norway hold strong position on climate change.

She hailed Ethiopia’s commitment and effort to combat the challenges of climate change and affirmed that Norway will continue to support these efforts.

Ethiopia and Norway has prepared draft projects on climate change to be implemented from 2013-2020.



Peace, Conducive Investment Policy Attracting Investors and Leaders: MoFA


Peace, Conducive Investment Policy Attracting Investors and Leaders: MoFA

American Affairs Director-General with the Ministry, Ambassador Taye Atskeselassie

The prevalent peace in Ethiopia and its favorable investment policy are attracting leaders and investors of various countries, according to Ministry of Foreign Affairs (MoFA).
American Affairs Director-General with the Ministry, Ambassador Taye Atskeselassie, said Ethiopia has become a trade and business destination for foreign companies.
The director-general, who quoted the saying that ”leaders trace the trail of investors”, indicated that the visits of America’s Energy, Commerce and Foreign Secretaries of State to Ethiopia within one month shows that the country is being a hub for international trade and investment.
During the visits, officials of the two countries conferred on ways of extending AGOA and how Ethiopia could become the leading beneficiary from Obama’s Power Africa Initiative which is expected to benefit 20 million Africans as well as on international issues and on ways the two countries could collaborate with respect to peace and security, he elaborated.
According to Taye, the recurrence of such visits will create closer cooperation for the realization of the agreements and pledges concluded between the countries.
The interests shown by Canadian and Brazilian investors to widely engage in trade and investment in Ethiopia demonstrate that the country is the preferred destination for trade and investment.
Meanwhile, Asia and Oceania Affairs Director-General, Genet Teshome, said the stable macro-economy of Ethiopia, in addition to the rapid economic growth, is attracting foreign direct investment.
The encouraging investment and trade policies issued by the government have also helped in making foreign leaders bring investors to Ethiopia, he added.
The Director-General, who recalled the signing of 16 agreements during the visit of   China’s Prime Minister Li Keqiang, said the growing discussions between inventors and foreign leaders and the Ethiopian government would result in consolidated development cooperation, trade exchange and investment flow by creating strong mutual trust between the countries.
Countries such as China that are making structural transformation from labour- intensive projects to capital-intensive big industries want to hugely invest in Ethiopia, according to Genet.
The Director-General, who recalled the recent visit of Japan Prime Minister Shinzo Abe’s visit to Ethiopia, stated that leaders have been working to strengthen their relationship with Ethiopia after assessing the actual situation in Ethiopia.
Accordingly, the Japanese government is expected to open soon its investment office in Ethiopia, he added.
Moreover, Ethiopia is carrying out joint mega projects with South Korea and India, Genet noted, adding the countries have been playing pivotal role by supporting sugar projects, investment, road, geothermal and energy as well as provision of low-interest loans.


Canadian Ambassador Calls Attention to Private Sector


The Canadian Ambassador to Ethiopia, David Usher, has called for attention to the development of the private sector and the reframing of the ideologically dedicated and cumbersome bureaucracy of Ethiopia, if it is to continue along the path of sustainable development.

The call was made during the fourth Ethiopia-Canada bilateral consultation held on June 19, 2014 at the Ministry of Foreign Affairs (MoFA). Those in attendance included senior state officials from the MoFA, Ministry of Finance & Economic Development (MoFED) and Ministry of Mines (MoM), as well as senior officials from the Canadian Embassy and the Canadian Foreign Affairs office.

The predicament that the bureaucracy poses has been admitted by Taye Atske Selassie, director general of the Americas at the MoFA. At the event, he pledged to rectify the shortcomings of the red tape bureaucracy which hampers progress.

Among the series of issues deliberated on by representatives of the two countries were the current program scope and priority sectors, development program implementation, the Great Ethiopian Renaissance Dam (GERD), democracy and good governance.

The two countries are working closely to deepen their long standing interaction, which began close to 50 years ago. Extractive industries, agriculture and water development and electrical transmission are the key sectors of cooperation.

There are now 270 private local, joint venture and foreign companies that managed to obtain licenses. Two hundred and seven of them are engaged in exploration, while the rest are in extraction. Eleven companies from Canada investment have been given active licenses.






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