20 Sept 2014 News Briefs

Boeing, Ethiopian Airlines Announce Order for 20 737 MAX 8s


– Order is the largest single Boeing order by number of airplanes from an African carrier

CHICAGO, Sept. 20, 2014 /PRNewswire/ — Boeing [NYSE: BA] and Ethiopian Airlines today announced an order for 20 737 MAX 8s. The order, previously unidentified on the Boeing Orders & Deliveries website, is worth more than $2.1 billion at list prices and also includes options and purchase rights for a further 15 737 MAX 8s. The order represents the largest single Boeing order by number of airplanes from an African carrier.

“Today’s order underlines our commitment to our 15-year strategic plan, ‘Vision 2025’, in which Ethiopian will strive to become the leading airline group in Africa carrying 18 million passengers per annum,” said Tewolde Gebremariam, CEO of Ethiopian Airlines, during a visit to the Association for the Promotion of Tourism to Africa National Forum in Chicago. “The 737 MAX will form a key component of that strategic vision, enhancing our single-aisle fleet and keeping us at the forefront of African aviation.”

The 737 MAX incorporates the latest technology CFM International LEAP-1B engines, Advanced Technology winglets and other improvements to deliver the highest efficiency, reliability and passenger comfort in the single-aisle market. The 737 MAX will be 14 percent more fuel-efficient than today’s most efficient Next-Generation 737s – and 20 percent better than the original Next-Generation 737s when they first entered service. The 737 MAX has a total of 2,294 orders from 47 customers worldwide.

“This historic order for Boeing and our partner Ethiopian once again positions the carrier at the heart of African aerospace innovation with the acquisition of the 737 MAX,” said Van Rex Gallard, vice president of Sales for Latin America, Africa and the Caribbean, Boeing Commercial Airplanes, speaking in Chicago. “Throughout the years, Ethiopian has consistently led the way in introducing new airplane types to passengers across Africa. Today’s record order signals its commitment to continue that tradition.”

Ethiopian currently serves more than 83 destinations across five continents from its base at Bole International Airport in the Ethiopian capital, Addis Ababa. The Ethiopian flag carrier’s partnership with Boeing has existed for more than half a century, with a current fleet of more than 50 Boeing airplanes that includes Next-Generation 737s, 757s, 767s, 777s, 787 Dreamliners and a cargo fleet of 757s, 777 Freighters and MD-11s.



Government suspends nation’s largest Turkish Industrial Zone project


The Ethiopian government has suspended the multibillion dollar Ethio-Turkish industrial zone development project being undertaken on the outskirts of Addis Ababa near Sendafa town due a potential threat posed at the Legedadi Dam and Water Treatment Plant as a result of the construction of the industrial zone. 

The Turkish construction firm and industrial zone developer, Akgün Group, signed an agreement with the Ethiopian government in 2009 that enables it to develop an international industrial zone in the Oromia Regional State near Sendafa town, 35 km north of Addis Ababa. Akgün secured one million sq. meters (100 hectares) of land from the Oromia Regional State a year ago. The total cost of the project is estimated to be 10 billion dollars and it is projected to employ one million people.

Akgün has started mobilization and conducting soil test and planned to start construction once the rainy season is over, according to Yunus Akgün, board member of Akgün Group. “Machineries and equipment are on their way to Ethiopia,” Yunus told The Reporter. However, the company was recently informed to suspend construction as the project may cause a threat to the stability of the Legedadi drinking water dam.

The Ethio-Turkish International Industrial Zone is located only five km from the Legedadi Dam and Water Treatment Plant. Reliable sources told The Reporter that officials of the Addis Ababa Water and Sewerage Authority (AAWSA) are very concerned about the realization of the project which is found in the catchment area of the Legedadi dam which supplies clean drinking water to 50 percent of the three million Addis Ababa residents. “The construction site is located in the Legedadi reservoir.”

“The industry zone construction poses a serious threat to the dam,” sources at AAWSA said. “It has two different effects on the dam. One, there will be turbidity during the construction. The mud that would be created during the construction will be washed by the rain-water and accumulate in the dam. Second after the factories are built the industrial wastes from the factories will be washed by the rain to the dam and contaminate the drinking water.”

Officials of the Addis Ababa Water and Sewerage Authority informed the federal government of the potential threat posed at the Legedadi Dam. According to information obtained from the Addis Ababa Water and Sewerage Authority, the plot of land was granted to the company without the knowledge and consent of the authority. “Experts of the authority conducted a study on the impact of the industrial zone construction. They came up with a conclusion that the industrial zone has serious impacts on the dam,” an official at AAWSA, who requested anonymity, told The Reporter.

Accordingly, the officials of the authority informed the federal government of the potential threat of the industrial zone and recommended that the construction of the industrial zone be suspended. The authority wrote a letter to the Office of the Prime Minister and the Mayor of Addis Ababa. According to sources, the authority’s move was supported by the Ministry of Environment and Forest and the Ministry of Water, Irrigation and Energy.

Sources said the Office of the Prime Minister decided that the construction of the industrial zone is temporarily suspended until a solution is sorted out. “We support the realization of the Ethio-Turkish Industrial zone. It is a flagship project that will play an important role in the economic development of our country. But this is also a threat posed at the well-being of 1.5 million people. If the company can come up with a solution it can commence the construction on the industrial zone. Until then, the construction is suspended,” the authority said.

According to Yunus, the government’s decision was conveyed to Akgün Group last July through the Ministry of Industry. Yunus said his company is undertaking an environment impact assessment study. “We are finalizing the study. We will submit it to the government after one month.”

According to Yunus, every investment project in the world has an impact on the environment. “The most important thing is to have a mitigation plan. So we are working on that and we will soon present it to the government.”

Yunus said that Akgün wants to see a sustainable development in Ethiopia adding that the Ethio-Turkish Industrial zone will benefit the country. “We are very serious about the mitigation plan. Every problem has a solution. There are means and ways. With today’s latest technology we can address any type of environmental concern,” Yunus said. “It is hundred percent possible.”

Sources told The Reporter that the government will evaluate the mitigation plan and decide on the fate of the project. “After evaluating the mitigation plan the government may allow the company to embark on the project or relocate the industrial zone to another location,” sources said.

Yunus said that the company will accept the government’s decision. “It is the Ethiopian government that invited us to invest in Ethiopia. The Ethio-Turkish International Industrial Zone is 10-12 billion dollars investment that will employ one million people.”

Asked if Akgün will agree to the idea of relocating to another location, Yunus said that his company will accept whatever decision the government will make. The cost the company incurred so far in developing the site is the question lingering in the minds of people close to the project.

Yunus said that will be something that the board of the company will discuss and decide. Yunus declined to disclose the amount of money the company invested so far on the construction site. “We are just at the beginning. We did not spend a huge amount of money. It is good that we are at the start. What if we have built the factories? That would have been worse.”

Yunus is confident that Akgün will address the environmental concerns and embark on the largest industrial zone development project in Africa. “I can assure you that we will realize this project. It could be on this site or on another. But we will do it. The project is backed by the Ethiopian and Turkish governments.”

Akgün Group has been promoting the Ethio-Turkish International Industrial Zone project in Turkey, Germany, the US, the UAE and Japan. The industry zone planned on 1,500 hectares of land includes a customs zone, lorry park, gas station, logistics zone and recycle center. According to Akgün, the recycle center will collect and separate industrial wastes and recycle aluminum, iron, plastics, copper and other similar materials. The industrial zone will have factories including textile and garment, shoes and processed leather products, processing of food and agriculture products, pharmaceuticals and chemical, machinery and metal production, plastics and rubber, construction and building materials, electricity and electronics, glass production, handicraft and storage and logistics. There are also education, health, laboratory and techno park.

The plan is to put the project into effect in 15 years. According to Akgün, 1500 enterprises will be located in the industry zone. Projected export in the first years is five billion dollars but the plan is to reach ten billion dollars.

It was in 2008 that Abadula Gemeda, the then president of the Oromia Regional State, who visited Istanbul, that invited Akgün Group to come and invest in Ethiopia. Abadula, with a ten-member delegation, visited the Istanbul Organized Industry Zone established and managed by Akgün Insaat. After listening to the briefing by Yusuf Akgün, chairman of Akgün Group, Abadula was impressed by the industrial zone and asked him to do the same in Ethiopia.

Senior government officials, including the late prime minister Meles Zenawi and former foreign minister Seyoum Mesfin, were staunch supporters of the project.

Akgün first came to Ethiopia in 2005 and established Plaswin Plastic factory in Burayu town. According to Yunus, Plaswin is now the leading plastic manufacturer in the country.

Since 2003 more than 115 Turkish companies have invested in Ethiopia with a total capital of 1.2 billion dollars. President Mulatu Teshome (PhD), former Ethiopian Ambassador to Ankara, is credited for the influx of Turkish companies to Ethiopia. Efforts made by The Reporter to get comments from the Ministry of Industry was not successful.



MetEC to assemble polish tractors


By Asrat Seyoum, Lublin, Poland

The Ethiopian Metals and Engineering Corporation (MetEC) is prepared to receive the delivery of the first of 1500 polish tractors produced by the oldest polish agricultural equipment brand, Ursus SA, based on a knocked-down export contract worth USD 90 million signed exactly a year ago.

All five models to be supplied will be either completely or partially knocked-down from making MetEC the first company to operate an assembly line for the polish tractor maker in Africa.

According to Robert Pietrzyk, trade specialist and coordinator of the Ethiopia project at Ursus headquarters at Lublin, 50, 80 and 110 horsepower tractors that will be supplied to MetEC starting end of September will be in a completely knocked-down form requiring as many as 60 assembly processes to put together and have them ready for use.

On the other hand, the 140 and 180 horsepower tractors (quite heavy machineries by industry standard), which are part of the 1500 tractors that are coming to Ethiopia, will be in a semi-knocked-down form with relatively less assembling work. According to Pietrzyk, Ursus will provide the necessary equipment to set up a proper assembly line in MetEC in addition to training and supporting Ethiopian professionals both abroad and in country. The first round of training program to be held in Poland is scheduled to start very soon, Pietrzyk told The Reporter.

“We have already delivered five tractors for presentation in January together with spare parts and equipment for assembly lines,” Pietrzyk said on Wednesday. Furthermore, he announced that the first batch of tractors to be delivered to Ethiopia have already been produced and are being packed. According to the stipulation of the contract that was signed between the two parties, the 1500 tractors are just phase one of the supply deal. Another 1500 are expected to be agreed upon and delivered to Ethiopia the coming year. Furthermore, the tractors intended for Ethiopia and are currently in the production line are also slightly customized versions of their original models on account of the desired specifications and the price that the Ethiopian markets can pay, the coordinator noted. He said that some of specifications required by the Ethiopian side took into account particularly the climatic conditions in the country and ways of agricultural production.

Pietrzyk told journalists that his company is expecting the first round of operators from MetEC to come to Poland to complete the training hours required to make the assembly line work. Until then, Ursus will also provide technical help in running maintenance and after-sale services.

“We are not only selling our products to MetEC, we are in fact selling the technology and knowhow,” he explains. Furthermore, Ursus is also relying on this project to decide on its approach of entering the neighboring country markets. If the former steps up to the plate, Ursus wishes to penetrate the regional (Eastern Africa) market through MetEC by exporting to the countries in the region.

With an accumulated experience of 120 years in the automotive and agricultural machinery sector, which has a limited presence in Africa thus far, Ursus is already calling the Ethiopian project the biggest project for the year and has given it priority ahead of another project to produce electric buses to the city of Lublin.

The Ursus Factory was founded in Poland in 1893 on 15 Sienna Street, Warsaw, by three engineers and four businessmen using the dowry earnings of their seven daughters. It started producing exhaust engines and later trucks and metal fittings intended for the Russian Tsar.

In 1930 the Ursus factory fell on hard times due to the world financial crisis and was nationalized under the Państwowe Zakłady Inżynieryjne (National Engineering Works, PZInż), the Polish manufacturer of arms and vehicles. It then began producing military tractors, tanks and other heavy machinery for troops. During World War II, the Germans relocated PZInz to Germany and the remains were destroyed. After the war the factory was rebuilt and started producing the Ursus C-45, similar in design to the German pre-war Lanz Bulldog tractor. During the 1950s, the Ursus factory began producing tractors using a Zetor-based design. Currently, Ursus is a machinery giant in Poland which is traded at the Warsaw Stock Exchange since 2007.



Polish sugar giant eyes Ethiopian market


By Asrat Seyoum, Krasnystaw, Poland 

Pursuant to a memorandum of understanding it signed with the Ethiopian Sugar Corporation in October, a polish sugar group, Polski Cukier, is set to provide technical assistance to the Ethiopian sugar manufacturing sector as part of its long-term goal to introduce Ethiopian sugar to the European market.

The memorandum, signed in October of last year, laid down modality of cooperation between the two state-owned sugar corporations that includes technical assistance and work exchange programs, which starts by the first set of Ethiopian sugar professionals traveling to Poland to take on job training of sugar production. According to a statement by Rafal Mozdzen, lead strategist of the strategy and business development department at Polski Cukier, Ethiopian sugar professionals would get a taste of beet sugar production (sugar production from sugar beet) in Poland apart from gaining valuable experience on how to improve quality, effectiveness and environmental sensitivity in the sugar production process.

The EU is the leading beet sugar producer in the world, accounting for 50 percent of overall production. Most of sugar beet in Europe is grown in the northern half of the continent encompassing countries like Germany, France, United Kingdom and Poland. Nevertheless, beet sugar is only 20 percent of the overall sugar production in the world while the rest, 80 percent, is squeezed from sugar-cane. Sugar is largely produced in Ethiopia from sugarcane, which does not grow well in the parts of Europe where Poland is located.  Mozdzen says that sugar experts from his company would also get to travel to Ethiopia to learn about sugar processing from sugar cane. “Beet and sugar-cane sugar productions are slightly different from one another and the exchange program would help both sides to widen their perspective,” he said.

On the other hand, Mozdzen also said that his company is eying the Ethiopian sugar sector for long-term cooperation. “We want to introduce Ethiopian sugar to the European market,” Mozdzen said. With the deadline for the lifting of the EU sugar trade regulation that includes production quota and minimum beet prices fast approaching, it is time for the polish sugar to look for other markets, according to Mozdzen. When the quota system is lifted, he explains, even a company as big as Polski Cukier, which is the eighth largest producer in the EU market at the moment, would not be strong enough to withstand the stiff competition and downward pressure on prices. And, it looks like the market and production capacity like that of Ethiopia’s is part of exist strategy for polish sugar giant. Mozdzen did not deny the possibility of considering investment options in the Ethiopian sugar sector and he also hopes this market could be a gateway to the rest of the continent.

The company is still in the process of privatization according to Mozdzen. Currently, 80 percent of Polski Cukier is owned by the polish government while the rest belongs to sugar beet farmers. In fact, the sugar group did not own its own beet plantation, it rather relied on the supply of 10,000 tons of sugar beet annually by sugar beet farmers in Poland.

Polski Cukier is the biggest sugar company in Poland that supplies a commanding 39 percent of its domestic and some 4.1 percent of the European sugar market. Last year, Polski registered an annual turnover of 500 million euros and 150 million euros profits. Currently under expansion, Polski has an installed production capacity of 700,000 tons/year, with it seven sugar plants in Poland and one in Moldova.



Government orders Indian contractor to speed up Tendaho Sugar Factory


The Tendaho Sugar factory being constructed by an Indian company near the Assayita town of the Afar Regional State is set to start operations a week’s time, The Reporter has learnt.

According to sources, the government has intensified efforts to push the Indian company to complete the factory, which has been delayed from its original schedule.

In March of this year, Shiferaw Jarso, director general of Ethiopia’s Sugar Corporation, under a ministerial portfolio lamented the performance of the Indian companies involved in the construction of Tendaho Sugar Factory due to be inaugurated in two weeks, far behind its schedule.

“We have repeatedly ordered the company to complete the project since it was delayed from the original plan. Despite its delay the factory has commenced trial production. So far the result is successful,” Zemedkun Tekle, Communications Head at the Ethiopian Sugar Corporation, told The Reporter.

The Ethiopian government signed an Engineering Procurement Construction (EPC) contract with an Indian company Overseas Infrastructure Alliance (OIA) for the construction of the Tendaho Sugar Factory and the expansion of the Fincha and Wonji Sugar factories on January 10, 2007.

The project was enabled by a loan of 640 million dollars from Exim Bank of India of which 400 million dollars was for the construction of the factory while the remaining was to be used for the expansion of the Fincha and Wonji sugar factories.

It can be recalled that the corporation hoped five months ago that Tendaho Sugar Factory would begin production test in five months. However, the factory has not been finalized yet though the planting of sugarcane and the factory are being carried out side by side.

Tendaho Sugar Factory, expected to produce over 619 thousand tons of sugar annually has been under construction in the Afar Region. The sugarcane development for the factory is expected to cover 50 thousand hectares of land eventually.

In the same development, the government announced this week that the irrigation development project built along with the Mesno Sugar factory in the Awash town of the Afar Regional state is also 99 percent accomplished. .

Ten new sugar factories are under construction in Ethiopia including Tendaho. At the completion of the factories, the annual sugar product of the country, which is currently 100 thousand tons is expected to grow to 3.25 million tons.

According to the corporation’s September report, in the just began new fiscal year, the corporation has planned to produce over 1.2 million tons of sugar and over 30.2 million liters of ethanol.

It also has planned to export 664 thousand tons of sugar that would enable them to secure USD 311 million. Similarly the corporation also plans to produce 189 MW of energy in the current budget year, out of which 46 MW would be channeled to the national grid.



Authority signs road contract with Chinese company


Authority signs road contract with Chinese company


Ethiopian Roads Authority signed a contractual agreement with the Chinese Tiesiju Civil Engineering Group to upgrade the Konso-Yabelo road project.

The Konso-Yabelo road is to be built between the states of Oromia and Southern Nations, Nationalities and Peoples.

It is 107km long and will have 5 bridges for major rivers crossing the road in different places.

The project would be vital to market agricultural goods both in the States of Oromia and Southern Nations, Nationalities and Peoples.

The total project consumes 1.1 million birr and is to be financed by loan obtained from the World Bank.

The road will help connect Hawasa to Moyale, which are among the major trade corridors of the country.

Director General of Ethiopian Roads Authority, Zaid Woldegebriel, said the road would be vital to commercialize various agricultural products.

The Chinese Tiesiju Civil Engineering Group has been involved in road construction in Ethiopia and is also known for completing road projects on schedule.

On the singing of the agreement, General Manager of the Group Cai Xiaobin said his Group would strive to finalize the project on time ensuring its quality.

Under its fourth Road Sector Development Program, Ethiopia has accomplished upgrading of 13000km asphalt and 14000km gravel roads.



Bole Lemi II, Kilinto industrial zone projects launched


Bole Lemi II, Kilinto industrial zone projects launched


The World Bank has been financing various development projects in Ethiopia.

In a recent visit, the Bank’s Managing Director and Operation Officer, Sri Muliani Indrawati, has seen the multi-faceted development activities funded by the Bank.

By way of enhancing the partnership, the World Bank has allocated 250 million US dollars for the construction of the Bole Lemi II and Kilinto Industry Zones.

The projects were launched on Friday in Addis Ababa. A representative of the World Bank, Anabel Gonzalez, said the launching of such competitive projects would create job and promote Ethiopia’s export market.

Gonzalez, on behalf of the World Bank, expressed commitment to see the project through.

World Bank’s Country Representative, Guang Zhe Chen, said the project is tailored to strengthening Ethiopia’s development efforts.

State Minister of Industry, Sisay Gemechu, said the project would play a significant role in the industrial development of the country.

The project is said to prioritize skill development and women’s empowerment.



Canada-Africa Business Summit concluded successfully


Canada-Africa Business Summit concluded successfully


The four day Canada-Africa Business Summit concluded successfully on Thursday in Toronto.

The summit, which brought together African government representatives, members of Canadian and African business communities and non-governmental organizations, highlighted the importance of creating a closer, more comprehensive and stronger Canada-Africa cooperative partnership in such areas as education, financial and insurance services, information and communications technologies, infrastructure, mining, and transportation.

In his closing remarks, Ed Fast, Canada’s Minister of International Trade, urged Canadian business leaders to tap into the business and investment opportunities in Africa.

He noted that: “Increased trade and investment is transforming countless lives and communities across Africa, just as it is creating jobs and generating economic growth in Canada and African countries alike.”

He said the Canadian Government was committed to help Canadian companies engage in Africa’s emerging economies, and offered the tools to help them succeed.

Christian Paradis, Canada’s Minister of International Development and of La Francophonie, remarked that “Africa’s development is not only an important economic growth story; it is also a development story”.

He assured the Summit that Canadian companies were willing to use “innovative approaches, financial instruments and technologies to build local capacity and create benefits for communities.”

He said while Africa had been experiencing high economic growth rates with “a massive growth of the middle class and the reduction of poverty,” much still remained to be done to fully address the needs of many people.

He stressed that Africa was on the rise and “filled with hope,” and underlined Canada’s commitment to share its capital, technology, and entrepreneurial expertise with Africa to sustain that momentum.

He announced that Canada would be providing $309.3 million to “support the growth of small and medium size enterprises, enhance value chain development and expand wealth creation through the African Development Bank.”

The Minister also said Canada would be contributing $12.5 million to strengthen mining expertise in Ethiopia.

During its four days, the Canada-Africa Business Summit featured a whole series of plenary sessions, panel discussions, documentaries, networking events, business-to-business meetings, and expos before concluding on Thursday.

The Ethio-Canada Investment and Business Summit which had been held in parallel with the Canada-Africa meeting also concluded on Thursday having provided four days of networking events, business-to-business meetings and product displays, successfully showcasing Ethiopia’s business potential and opportunities.



Ethiopia Mineral Development Concluded MoU with Canadian Firm


Ethiopia Mineral Development Share Company (EMD) concluded a memorandum of understanding (MoU) with CVMR Ltd during the Canadian Council of Africa’s Canada-Africa Business 2014 summit.

According to Walta Information Center the proposed partnership has a preliminary estimation of U.S. $ 3 Billion.

The aim of the farming partnership is concentrate production and refining of Tantalum, Niobium, Lithium, Nickel, Iron, and PGM for quarter of a century.

Commenting on the occasion EMD’s CEO, Dr. Zerihun Desta, said; “EMD is very pleased to have fund a partner with whom it can fully realize the economic potential of its rich mineral deposits”.

The Company’s board chairman and State Minister of Ethiopia’s Prime Minister Office, Bogale Feleke, noted the Ethiopian government welcomes CVMR to its economic expansion process towards attracting manufacturing industries to Ethiopia.

According to Walta, premium-priced specialty metal powders’ demand is growing at a 26 percent annually. The Center further explained CVMR’s patented production methods produce metal powders up to 99.999% purity and the company has higher recovery rates ad more economically than other mineral extraction methods.

CVMR’s chairman, Kamaran Khazan, on his part said his company is pleased its technology can help unlock much wealth and generate economic development for the Ethiopian economy.

Tolessa Shagi, Minister of Mines, also commented on the occasion saying; “The CVMR refining technology’s ability to simultaneously refine multiple metals is very valuable to our mine sites and has the potential to transform Ethiopian mining economics and attract investment.”

The memorandum of understanding was concluded on Thursday, September 18, 2014.


Tags: , , , , , , ,

No comments yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: