05 December 2014 News Round-Up


Ethiopia eyes record coffee exports


By Aaron Maasho in Addis Ababa


The head of Ethiopia’s exporters association says the East African country expects coffee exports for its 2014/15 crop to hit a record high because of drought and disease stifling crops in Latin America.

An unprecedented drought early this year reduced the 2014/15 crop in the world’s biggest coffee producer Brazil.

we are expecting the international market to go up

The International Coffee Organization forecast in September that global coffee production will fall short of demand.

In the four months from July this year, Ethiopia – Africa’s biggest producer of the bean – exported 54,000 tonnes of coffee worth $231.9 million, compared with the $172.5 million it earned from 51,000 tonnes over the same period last year.

Hussein Agraw, chairperson of the Ethiopian Coffee Exporters’ Association, said he expected the amount of coffee exported to rise to 235,000 tonnes by the end of 2014/2015, generating $862 million in revenue.

Ethiopia exported around 190,000 tonnes in 2013/14, earning $841 million, he said.

Exports hit a previous record high of 193,000 tonnes the year before, he said.

“We are making these expectations because of the fall in production in Brazil,” he told Reuters.

“Because of this, we are expecting the international market to go up,” Hussein added, referring to demand.

Total coffee production in Ethiopia amounted to 450,000 tonnes over the 2013/14 period, according to official figures.

Officials expect a similar output by the end of 2014/15.

Ethiopia prides itself on being the birthplace of coffee. Some 15 million people are involved in its production, mostly in smallholder farms in the misty forested highlands in the country’s west and southwest.



Coffee Exports: Brazil’s Loss Is Ethiopia’s Gain



VENTURES AFRICA – Ethiopia says it expects coffee exports for its 2014/15 crop to hit a record high because of drought and disease stifling crops in Latin America, Hussein Agraw, the Chairperson of the Ethiopian Coffee Exporters’ Association said on Wednesday.

Brazil, the world’s biggest coffee producer, suffered an unprecedented drought early this year which reduced the 2014/15 harvest and led the International Coffee Organization to forecast in September that global coffee production will fall short of demand.Hussein told Reuters that Brazil’s coffee struggles meant more success for Ethiopia as he expected the international coffee market to go up in demand.
The birthplace of coffee, Ethiopia’s total production of the highly lucrative cash crop over the 2013/14 period amounted to 450,000 tonnes , according to official figures. Officials expect a similar output by the end of 2014/15.Ethiopia exported around 190,000 tonnes in 2013/14, earning $841 million; the year before it hit a record high of 193,000 tonnes. But Hussein said he expects the amount of coffee exported to rise to 235,000 tonnes by the end of 2014/2015, generating $862 million in revenue.



Ethiopia Starts Marketing Debut Eurobond for Projects


By Robert Brand, Paul Wallace and Lyubov Pronina


topomapEthiopia raised $1 billion in a debut international bond issue today, taking advantage of record demand for high-yielding African debt to fund electricity, railway and sugar-industry projects.

The 10-year bonds priced to yield 6.625 percent, at the lower end of the 6.625 to 6.75 percent price guidance, according to a person familiar with the matter, who isn’t authorized to speak publicly and asked not to be identified. Kenya’s $2 billion of bonds due June 2024 yielded 5.89 percent at 5:21 p.m. in London.

Africa’s fastest-growing economy and biggest coffee producer is joining issuers, including Ghana, Kenya, Senegal and Ivory Coast, who sold what Standard Bank Group Ltd. says is a record $15 billion of Eurobonds this year. Government and corporate issuers are seeking to benefit from investor appetite for higher returns before the Federal Reserve raises interest rates as soon as next year.

Ethiopia’s bond yield is “decent value for the deal given the limited knowledge and different nature of the Ethiopian economy and the challenges it faces compared to peers in the region,” Kevin Daly, a senior portfolio manager at Aberdeen Asset Management Plc, said by e-mail.

The country made a strong case for infrastructure development and financing needs at investor meetings, “which suggests they will be looking to come back to the market in near term,” Daly said.

Ethiopia will probably need to invest about $50 billion over the next five years, of which $10 billion to $15 billion may come from foreign investors, Finance Minister Sufian Ahmed said on Oct. 7. Most of the capital raised will be used to develop sugarcane plantations, a 6,000-megawatt hydropower dam on a tributary of the Nile River and the country’s railway network, he said.

“It is certainly a good time for them, market wise,” David Cowan, an Africa economist at Citigroup Inc., said at a conference in London. “Ethiopia is still one of the most closed economies, although it has a very strong developmental vision. They have to think about how they use that money to drive that development.”

Band Aid

Almost 30 years after pictures of Ethiopian children with distended stomachs were used to raise money by Bob Geldof and Band Aid, the country is growing faster than any other African economy, at an average rate of 10.9 percent over the past decade, International Monetary Fund data shows.

African government and corporate Eurobonds sales this year beat 2013’s record $14 billion, Standard Bank said on Nov. 13. Sovereigns accounted for about 71 percent of issuance, according to the Johannesburg-based lender.

Ethiopia was assigned its first credit ratings in May. Moody’s Investors Service rates it a non-investment grade B1 with a stable outlook, while Standard & Poor’s and Fitch Ratings awarded the East African country B, one grade lower.

Moody’s said the nation’s economic prospects, while favorable in the long term, were constrained by political risks and dependence on volatile agricultural commodities. Deutsche Bank AG and JPMorgan Chase & Co. managed Ethiopia’s sale.



LG Opened TVET College in Ethiopia



LG-KOICA Hope TVET College has finished its preparation to provide trainings in the areas of IT (Hardware and Network Servicing) and Electronics which contains two streams of Home and office Equipment servicing and Electronic and multimedia communication servicing.

In each training stream the departments only accepted 25 qualified trainees so recently the college has a total of 75 students based on the criteria set by Addis Ababa TVET Agency and the entrance exam set by the college.

Initially a total 221 trainees has applied for the college and only 75 trainees are selected for the three training streams by way of various requirements set by the college including entrance exam. In the application and selection process descendants of Korean War Veterans has been given special consideration. During this project students will not be requested to pay anything so the training is provided is for free. In addition LG also provides lunch service for all 75 students during their stay in the training years.

Even though the college uses the curriculum designed by the TVET agency, LG has inserted some important courses that can facilitate the transfer of LG’s core technologies and competencies. Beyond the technological transfer the college will also provide innovative course so that the young generation will craft income generation initiations and Skills of entrepreneurship.

As part of its CSR program, LG currently runs five major projects in Ethiopia which are pertinent and supportive of the country’s development routes. These projects are: LG Hope Village, LG Hope TVET College, LG Hope Descendants, Vaccination Program and Elementary school supporting Program. The corner stone for all these projects has been and it will always be self-reliance and sustainability.

Among these programs the one that focuses on fostering young middle level technician that can positively contribute for the Ethiopian Industry is the LG-KOICA Hope TVET College.

Currently the Ethiopia Educational system has given ample attention in creating skilled human power that can fill the gap in the labor market. The TVET project has the principle concept of establishment, operation and transfer. Since April, 2014 LG has been constructing the building, drafting the legislation and the manuals, reviewing the Occupational Standards and hiring qualified trainers and trainees.

Each of LG Hope Projects focuses on specific needs of the local population in Ethiopia and attempt to address the causes, not just their effects, with creative, multifaceted solutions. The College also fills the gap in the labor market in securing skilled human power which is the basis for the industry of any country. LG Electronics; hence, will further strengthen its support and be fully committed to the Ethiopia’s development objectives.

The college is located in Summit condominium of Bole sub city and the training provided in both fields runs from Level I to Level IV.



Technology: An Internet connection that blocks power cuts


By Ying M. Zhao-Hiemann
Courtesy photo©http://www.brck.com/

Courtesy photo©http://www.brck.com/


BRCK, a portable Wi-Fi router and a backup power generator for the internet, is expected to alleviate problems that African Internet users face daily such as high communication costs and unreliable electricity.

Ushahidi, a not-for-profit technology company based in Kenya, has invented a cloud-managed, portable Wi-Fi router that consists of a mobile modem, which can also be used as a backup power generator for the Internet during electricity blackouts or in situations of limited network coverage.

Out of adversity can come innovation

Called BRCK (pronounced as “brick”), experts are already recognising it as an ingenious solution to Africa’s intractable power problems.

The BRCK is rugged and water-proof and compatible with any device that requires between 3 and 17 volts power supply.

It weighs 510 grammes and it is ideal for use in particularly rural areas. It can be charged on readily available power sources such as a car battery or a solar panel. When the electricity goes off, BRCK automatically switches to battery mode, which can then last for eight hours.

In addition, currently available modems in Africa don’t meet local needs.

They are designed primarily for use in more developed regions, particularly the West and Asia, where there is mostly uninterrupted access to electricity and Internet.

The gadget can switch between Ethernet, Wi-Fi and mobile broadband connections, and deliver connectivity for up to 20 devices at the same time through multiple sim cards, thereby allowing users to stay connected at a relatively low cost.

Ushahidi is optimistic about the device’s potential to help small business owners in Kenya and other parts of Africa.

“Out of adversity can come innovation,” said Juliana Rotich, Ushahidi’s executive director, at a presentation at the TED Global Conference in Scotland last year.

Rotich emphasized the importance of connectivity and entrepreneurship for Africa’s digital economy, and highlighted the BRCK’s role in keeping Africans connected.

Last July, BRCK’s creators were invited by eLimu, a Kenyan tech company, to consider delivering an e-learning to schools in remote locations.

The BRCK has also been stress-tested successfully in rural Kenya and during the Rhino Charge, an annual off-road motorsport competition.

Launched last July in Nairobi, each BRCK sells for $199. Africa’s ongoing information and communication technology (ICT) transformation makes BRCK a potentially popular device.

Ushahidi (meaning “testimony” or “witness” in Swahili) was originally founded in 2008 as a website to map reports of violence in Kenya in the aftermath of the disputed 2007 presidential election.

Since then, the company has evolved into a leader of the technology community in East Africa.



Vitol places lowest offer in Ethiopia oil product tender: sources


Vitol_new.jpgEuropean oil trader Vitol is likely to clinch a term deal to supply nearly 1.2 million tonnes of oil products into Ethiopia for next year, industry sources said.
Vitol placed the lowest offer out of seven into a tender by Ethiopian Petroleum Supply Enterprise (EPSE) to buy 1 million tonnes of gasoil, 45,000 tonnes of gasoline and 120,000 tonnes of jet fuel for 2015.“Vitol had the lowest offer in terms of weighted average price so they came out in favour, but the tender is still under validity,” one of the sources said.If awarded the tender, it will charge a premium of $3.85 a barrel above Middle East quotes for the gasoil cargoes, a $6 a barrel premium for the gasoline cargoes and a $14.20 a barrel premium for the jet fuel cargoes, the source added.The other companies who participated in the company include Glencore, Independent Petroleum Group (IPG), Lukoil, Trafigura, Bakri, BB Energy and Socar Trading, the source said.

The credit period will be for 150 days, the source said.



Italian firm to invest in Ethiopia’s textile


Calzedonia, Italian Garment Company is to invest in textile industry in Ethiopia.

The nation’s population size, huge potential resource, investment incentives, among others, attracted the company to engage in textile industry in the country.

The Company is expected to open its first Ethiopian branch in Mekelle town next year, the Ministry of Foreign Affairs said.

In his meeting with the company delegates at the Ministry yesterday, State Minister Dawano Kedir said that Ethiopia has ample investment opportunities and huge potential for textile industry and others.

Given the country’s strategic location at the crossroads of three continents, the peaceful investment climate and incentives, among others, have attracted investors to come and take advantage of the business opportunities in Ethiopia, he added.

Dawano also invited the delegates to explore new avenues of engagement in the manufacturing sector, in agro-processing and tannery.

Briefing journalists on their discussion with the State Minister, Company President Sandro Veronesi said that this is his second visit to Ethiopia.

Our meeting with the State Minister was fruitful as we have been able to identify the advantages and conditions prevailing in the country. We want to establish a factory for the production of night wear capable of employing some two to three thousand people. But we are still assessing the appropriate location and suitable conditions for the establishment of the factory. We are hopeful to start with the investment by next year,” he said.



ERC inks contracts with Chinese companies for AA-LRT management


Ethiopian Railways Corporation (ERC) yesterday concluded an agreement with China Railways Group and Shengen Meter Group for the maintenance and management of Addis Ababa Light Rail Transit (AA-LRT).

The contract sets out three to five year periods for the Chinese companies to maintain and manage the AA-LRT.

ERC Board Chairperson and Adviser to the Prime Minister with the Rank of Minister Dr. Arkebe Equbay said at the signing ceremony that there is no local company with the desired knowhow and experience to shoulder the administrative and maintenance of the rails.

He added the Chinese companies will conduct the testing of the tram and commence full operation.

Dr. Arkebe said the contract sets out a mechanism where technological transfer takes place and Ethiopian staff gain experience in the three to five year period.

After the five year, administering and maintaining the rails will be conducted by Ethiopians, it was noted. As such, the contract involves training Ethiopians in China.

The performance of the companies will be measured, among others, with the number of Ethiopian experts they have trained and by indicators of facilitating the city’s tram service.

Chief Executive Officer (CEO) of ERC Dr Getachew Betru (Eng) disclosed the 106 million US dollars deal will pave the way for international experience in managing trams to enter Ethiopia.




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