07 January 2015 Ethiopia Business Briefs

 

 

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Agency Importing Over 8.6 Billion Birr Worth Agricultural Inputs

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Addis Ababa: January 7, 2015 (FBC) – The Ethiopian Agricultural Development Supplier Agency disclosed that it is importing over 8.6 billion birr worth agricultural inputs that would be distributed across the country.

Among the inputs include fertilizer, vegetable seeds, pesticides and herbicides as well as vet medicines and spraying machines.

The agency said 400,000 metric ton urea and over 521,000 metric ton N.P.S fertilizer bought with 8.5 billion birr is being transported inland.

Out of this, more than 144,000 metric ton has reached port, and the balance will be fully transported by the end of May, 2015, it was indicated.

The agency said the imported inputs would be distributed to cooperative unions in all the regional states in line with the amount allotted by the Ministry of Agriculture.  

The agency has also been providing logistics support by purchasing 40 vehicles, it was learned.

http://www.fanabc.com/english/index.php/news/item/1901-agency-importing-over-8-6-billion-birr-worth-agricultural-inputs

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Government to allow the private sector in multimodal scheme

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The Ministry of Transport is considering sharing the multimodal (land, sea, or road) transportation services with the private sector.

Since the government introduced the multimodal scheme about three years ago it has been decided to control the system on monopoly basis. The private sector engaged on logistics service has been complaining about the monopoly for the last couple of months.
They have also pointed out the issue to the Prime Minister to get the opportunity to be involved.

Aiming to boost the multimodal system, the government has formed an enterprise with the amalgamation of three public logistics enterprises, Ethiopian Shipping Lines, Dry Port Services and Maritime Enterprise.

A week ago the government stated that it has interest to include the private sector in the scheme.
Getachew Mengiste, State Minister of Transport, told Capital that the aim of involving the private sector is to speed up logistics facilities.
“We are considering how the private sector will take part in the multimodal scheme,” the state minister explained.
“We will not decide by our self but we will involve other stake holders and we will discuss it thoroughly,” Getachew said.
He declined to give the exact time when the government will allow the private sector to engage on the scheme.

Frequent private requests to deliver import containers, quickly has forced the Ministry to consider allowing the private sector in the multimodal service. “The multi modal service that we have been doing for the last three years has been deliveringproducts in around seven days but we would like to see that number reduced to five days,” he said on the discussion with representatives of major import/export actors and logistics companies, held on Saturday December 27, at Elilly International Hotel.

Freight forwarders and shipping agents have been stated their concern that the multimodal scheme has significantly damaging their business.
‘‘We are drafting the documents that will allow the private sector to get involved in the multimodal scheme, then we will conduct a meeting to have a feedback from stakeholders,” said the state minister added.
The private sector representatives told Capital that in several occasions the government stated that it will allow the private sector to be involve in the multimodal scheme. “But it is very delayed,” they said.

Multimodal Transportation Implementation Directive enforce all shipments that belong to the government to use multimodal transport through Ethiopian Shipping and Logistics Services Enterprise (ESLSE). In addition the directive also instructs all vehicles of three tonnes or less to be under the new scheme and goods being shipped through the ESLSE, which was formed with the conglomeration of the three enterprises, are responsible to use a multimodal transportation service.

The multimodal arrangement is a scheme whereby the transportation of goods is under a single contract but performed with two or more different means of transportation. The transporter is accountable for the entire journey, including the shipment’s delivery at the final destination. The transportation can be carried out by rail, sea, and road.

http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=4850:govt-to-allow-the-private-sector-in-multimodal-scheme-&catid=54:news&Itemid=27

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EEP to build wind farms worth $ 3.6bln

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Détente Group LLC with its Pan African Partner Tristar Group LLC (TSG) last week signed a contract with the Ethiopian Electric Power (EEP) for the construction of four wind farms – IteyaI, Iteya II, Weldiya, and one among micro-scale sites and for the construction of 36 future bankable sites “the Microscale Project” worth USD 3.6 billion.

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According to Paul Delkaso, President and CEO of Tristar & Tritente Global Energy Group, the four sites combined will generate 1200MW and the project will be program based not project based. Most importantly Delkaso added, the advantages of the Government of Ethiopia adopting wind power, power generation diversification and continuation of the government’s zero carbon footprint, as well as green power revolution is well thought, admirable and should be commended as a pilot program for most countries in the world.

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Ethiopia’s power generation mix is predominately hydro power based, for the obvious reason that hydro has the lowest renewable power generation cost. Given the undo risk associated with periodic droughts on a predominately hydro based power supply, the government’s decisive steps toward taking a very long-term planning view and definitive steps towards introducing alternative renewable energy power generation should be commended, said Delkaso. An example of a country that failed to diversify its power generation base is Pakistan. The extended drought that they have experienced has much of their hydro plants operating at run-of-the-river water levels, resulting in frequent brownouts which have crippled the economy.

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Financing

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According to Brien Morgan, Managing Partner Détente Group, all project contracts are fully funded by US Ex-Im Bank’s Loan Guarantee Program or GOV– GOV program. Morgan also added that the bulk of the financing associated with the contractor’s PMO (Project Management Office) Contract shall be obtained through the US Ex-Im Bank’s Loan Guarantee Program or GOV-GOV program.  At the direction of the Ministry of Finance and Economic Development (MoFED), the contract price and quarterly invoice payment schedule will be modified downward in order to arrive at the maximum Ex-Im Bank loan guarantee amount of 85% for all projects.

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Wind Farm and Power Evacuation Contract Financing

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In addition to financing the Contractor’s PMO Contract, the contractor is also proffering to arrange the financing of the four Wind Farm and Power Evacuation system irrespective of the vendor’s country of origin.  If EEP decides to select a US Vendor, the US Ex-Im bank would be the export credit agency with whom the contractor would work with to finance the purchase and construction of the four Wind Farms. Although the contractor’s services are financed by the US Ex-Im Bank, in no way is the contractor or EEP obligated to select US Vendors.

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Education, training programs and knowledge transfer

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An effective partnership among U.S. and Ethiopian universities, governments, and the private sector can play a key role in energy sector technical capacity-building. According to Morgan and Delkaso, this project will include and build a successful technical exchange program needed to successfully develop energy resources and best practices technology transfer.

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Education and training programs for wind energy will be developed through collaboration between George Mason University (GMU) and Addis Ababa University (AAU), and Symposia and workshops will be organized to support sustainable wind energy development in Ethiopia.
Demitu Hambisa, Minister of Science and Technology in a letter to the Prime Minister office credited the project saying that it will help the Universities in their scientific advancement.

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The GMU/AAU capacity building educational services will provide comprehensive educational support for next generation scientists and engineers in wind energy technology and applications, said Morgan.
Educational, certificate and programs will complement ongoing vocational training with a synergistic approach to sustainable wind energy development (SWED), focusing on collaborative, multi-disciplinary education, training and best-practices knowledge transfer for practical applications, he said.

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The Joint Center of Excellence for Energy Sustainability (J-CEES)

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J-CESS, a collaborative effort between GMU’s Global Environment and Natural Resources Institute (GENRI) and AAU’s Ethiopia Wind Energy Center of Excellence will offer a comprehensive blend of technology and appropriate indigenous knowledge to ensure success for sustainable and adaptive management solutions to AAU as well as two other Ethiopian Technical Universities. J-CEES will develop and implement a holistic academic program that offers certificates of training for specialization, and computer-based training programs. This collaborative effort will ensure a holistic approach to implement best-practices knowledge transfer through the specialized center, he explained.

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This program will also support, the Ethiopia Wind Energy Information Service (EWEIS) and will provide a web portal information technology and communication (ITC) hub for all educational training and outreach resources to ensure effective communication and transfer of knowledge-based technology, tools and resources between J-CEES. EWEIS will provide a mechanism for exchange of instructional design strategy, methods to assess training effectiveness, and online Computer-Based Training (CBT) Modules and Best Practices Training Manuals (BPTM). The comprehensive academic training program will focus on improving skills to strengthen long-term sustainability of EWEP.

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The ultimate goal of J-CEES is to build a center of excellence that offers cutting-edge information technology in sustainable wind energy development.
Academic Wind Energy Demonstration Project (AWEDP)
AWEDP, a continued collaborative effort between GMU’s Global Environment and Natural Resources Institute (GENRI) and AAU and two other Ethiopian Technical Universities, will entail the installation on Ethiopian university provided research sites a dedicated 80 meter Met Mast in order to provide a full range of environmental data for research and operational applications.

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Through AWEDP, the Met Masts and LiDAR systems will be sufficient to prove out the wind resources at each of the Ethiopian Universities’ research site allowing AWEDP to implement, as an integral part of the Iteya I, Iteya II and Weldiya PMO Projects, one full size wind turbine demonstration units, and requisite power evacuation system during their respective implementation schedules. To facilitate AWEDP achieving its wind turbine operational goal, EEP allowed the Contractor to include the provision of demonstration unit wind turbine and sundry equipment and services within the Iteya I, Iteya II and Weldiya PMO Project wind farm procurement as a weighted and graded, immediately due, trade offset credit requirement. The opportunity also exists for the AWEDP to both self-fund and fund J-CEES by way of potentially creating a revenue stream through the sale of power to EEP.

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The company also signed an agreement with the Ministry of Water, Irrigation and Energy (MoWIE) for developing an atlas of Ethiopia’s national wind energy resources. The two year project which will determine the potential of the country’s wind energy will cost about USD 5.8 million. The study was presented to MoWIE free of charge as part of the company’s corporate social responsibility funded by the company and the World Bank.

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The DÉTENTE GROUP, LLC incorporated in the United States of America, provides investment banking and strategic consulting services to governments and corporations ranging from middle market companies to Fortune 500 corporations.

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Tristar Group LLC (TSG), Tritenet global energy group (TGEG) is specialized in managing and developing urban communities, developing green energy projects (EPC CO.) and bridge transfer of technology specifically generation of power from alternative sources such as wind, solar, and geothermal between companies and investors in the United States with government entities and private companies in Africa.

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Recently other two companies based in the US state of Maryland; Global Trade and Development Consulting and Energy Ventures, agreed with the ministry to develop solar energy in the eastern part of the country with a capacity of 300mw.

Another US and Icelandic joint venture, Reykjavík Geothermal (RG), also has plans to generate electricity from geothermal energy. These are not the first US based companies that have proposed investing in renewable energy in the country.

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Terra Global Energy Developers, LLC (Terra), a San Francisco based firm is working to generate 400 mw of electric power from a wind farm that it plans to build near Debre Birhan town, 130 km north east of Addis Ababa in Amhara national regional state.

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Wind Farm Project

Project #1:
Atlas Of Ethiopia’s National Wind Energy Resources (the “Mesoscale Project”);

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Project #2:
Microscale Wind Farm Bankable Resource Assessments, Power Evacuation Studies and Sale of Related Meteorological Masts, separated into an initial Phase I of twelve (12) Client-provided sites and options for a follow-on Phase II of twelve (12) sites and Phase III of an additional twelve (12) sites (the “Microscale Project”); Which will create 36 future bankable sites (program based) if more power needed.

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Project #3:
PMO Services for the Iteya 300MW, Rated Capacity Wind Farm constriction , Power Collector System and Power Evacuation to the National Power Grid Point of Interconnection (the “Iteya I PMO Project”);

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Project #4:
PMO Services for the Iteya II 300MW, Rated Capacity Wind Farm constriction, Power Collector System and Power Evacuation to the National Power Grid Point of Interconnection (the “Iteya II PMO Project”).

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Project #5:
PMO Services for the Weldiya 300MW, Rated Capacity Wind Farm, constriction Power Collector System and Power Evacuation to the National Power Grid Point of Interconnection (the “Weldiya PMO Project”); and

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Project #6:
PMO Services for one (1) Candidate 300MW, Rated Capacity Wind Farm, Power Collector System and Power Evacuation to the National Power Grid Point of Interconnection, to be developed from among the Microscale Sites (the “PMO Project IV”

http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=4843:eep-to-build-wind-farms-worth–36bln&catid=54:news&Itemid=27

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 Ethiopia: There is a big need for infrastructure – Jemal Ahmed

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By Jacey Fortin in Addis Ababa

Jemal Ahmed Chief executive, Saudi Star Agricultural Development, Ethiopia. Photo©Jacey Fortin

Jemal Ahmed Chief executive, Saudi Star Agricultural Development, Ethiopia.

Reap what you sow

Sept. 23, 1970 – Born in Addis Ababa

1993 – Left Ethiopia for the US to pursue higher education

1994 – Returned to Ethiopia 

1994 – Founded Ahfa, a company that imported cooking oil

2004 – Switched businesses from auto parts to fast-moving consumer goods

2008 – Opened Horizon Plantations

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From his office on the 15th floor, Jemal Ahmed has a bird’s-eye view of the pitch where players face off against international contenders. But he does not have much time for watching matches these days – indeed, most of the time he is not even in his office, a bright space with sparkling white floors and expansive windows.

“I work 24 hours a day, whether it’s from home or in the field,” he says.

When it comes to private enterprises in Ethiopia, the conglomerate MIDROC is a behemoth. It is owned by Sheikh Mohammed Al Amoudi, a Saudi-Ethiopian businessman who is the country’s largest private investor and the 75th richest man in the world, according to Forbes magazine.

The company’s assets include Ethiopia’s only commercial gold mine, its biggest cement factory and the world’s largest contiguous coffee plantation.

Agriculture, which employs more than 80% of the Ethiopian population, is a focus for three of the enterprises under MIDROC’s vast umbrella, and Jemal has a supervisory role in all of them. He is the new chief executive of Saudi Star, the managing director of Horizon Plantations and Al Amoudi’s representative for Ethio Agri-CEFT.

Processing pioneer

According to Jemal’s estimates, Ethio Agri-CEFT produces coffee, tea and cereals across an area of about 25,000ha, while Horizon is currently cultivating about 32,000ha and plans to invest another 500m birr ($25m) in coffee and oranges, two of its “bread- and-butter” products.

Saudi Star controls 14,000ha of land in the western region of Gambela, where it plans to grow rice and cotton.

Though Ethiopia depends heavily on agriculture, crops alone will not be enough to sustain this fast-developing country, where gross domestic product (GDP) grew 10.3% in the last fiscal year according to official figures.

The government wants Ethiopia to diversify away from commodity sales by investing in value-added exports and supporting industrial development.

In that arena, MIDROC is a pioneer in Ethiopia. Its processing plants roast coffee, turn oranges into marmalade and reduce tomatoes to a paste.

“When agriculture is integrated with industry, it boosts economic growth,” Jemal says. “In Ethiopia, with the population we have and the labour we have, I think we could compete in medium-scale industries.”

Despite the government’s ongoing efforts to restructure the economy, Ethiopia’s manufacturing sector represents just 4.2% of GDP.

Jemal pins the blame on poor trade logistics and a lack of infrastructure. He says that he looks forward to the completion of government projects, including dams and railways, that will make it easier for exporters to operate efficiently.

“There has been a big need for infrastructure, which we didn’t have, but the government has been investing heavily in that,” he says.

MIDROC, too, has been making investments in support of Ethiopia’s economic goals. It purchased bonds worth 500m birr – more than any other private enterprise – to support the Grand Ethiopian Renaissance Dam, a flagship project that will raise electricity generation to more than three times its current level.

Right place, right time

Addis is Jemal’s home town. He went to the US to pursue an education but this was cut short when his father died and he returned to Ethiopia to support his family.
He learnt his trade on the shop floor.

“I started as a trader at my father’s shop, importing auto spare parts and then moved into commodities by importing cooking oil,” he says.

The company he founded, Ahfa, became one of Ethiopia’s largest cooking oil importers. Jemal met Al Amoudi through mutual friends, and the two became business partners in 2007.

“I learned a great deal about Ethiopia’s economic growth through cooking oil. The consumption was just skyrocketing year after year. Sheikh Mohammed and I got together and wanted to develop a cooking oil project in Ethiopia, so with that we established Horizon,” he explains.

The government took over all palm oil imports in 2008, but by then Jemal was well on his way to a position of power within Al Amoudi’s diversified agricultural empire.

MIDROC rose to prominence as a key player in Ethiopia’s long-term privatisation drive.

The current ruling party overthrew the Soviet-allied Derg government in 1991, and although the government has retained strong control over sectors like telecommunications and electricity, it has spent two decades selling various state enterprises to the highest bidders.

“We have bought a lot of companies from the government,” says Jemal, though these purchases often come with stringent conditions: “They will put clauses in the contracts that will bind you, like you cannot lay off employees or you have to invest the amount that you put on your business plan or else face penalties.”

MIDROC is especially adept at navigating the business environment, says Jemal. “In the last 20 years, we have faced different challenges, so we have earned a lot of experience.”

But the company is not without controversy. With its collection of diverse assets and tight ownership structure, MIDROC’s inner workings are shrouded in secrecy.

Saudi Star is a subject of particular scrutiny, and human rights groups have lambasted it for participating in ‘land grabs’ in which the government leases huge tracts of land to companies while ignoring the rights of locals.

Jemal says the criticism is unfounded: “There was nobody there,” he says, referring to Saudi Star’s land in the Gambela region. “It was a virgin land. It is bush that we are clearing. There is no one displaced because of Saudi Star – not a single person.”

Saudi Star has also failed to produce crops according to schedule.

Aside from a 4,000ha plot recently acquired from the government, the land leased for rice has not reached commercial production.

The company cleared its plot but it is now overgrown. It will have to be cleared again before the scheme can take root.

The farm also requires irrigation from the nearby Alwero Dam, and Saudi Star is completing a 21km canal.

Construction of the conduit has slowed, sparking claims that MIDROC is facing financial troubles – a charge Jemal denies. He admits the project is “very behind schedule” but insists the firm’s ambitions will be realised: “We are hoping that by the end of 2015 we will develop the whole 10,000ha.”

Jemal does not seem worried about the prospects of Saudi Star or any of the enterprises under his watch.

But there is one thing he has yet to accomplish, and it has to do with the very thing that attracted him to agriculture in the first place: cooking oil.

All these years later, MIDROC has yet to secure the land Jemal and Al Amoudi want for the cultivation of ground nuts and oil palm.

“Cooking oil is still the best project I would love to get into!” he says. Available land has so far been hard to come by – mostly because Jemal and Al Amoudi do not want to start small.

“It’s just that we want to do it in a very big way,” he says. “I think both of us are very ambitious, and if we think there is potential, we try to grab it and develop it.”●

http://www.theafricareport.com/East-Horn-Africa/ethiopia-there-is-a-big-need-for-infrastructure.html

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Investment Projects with 5.3 Billon Birr Capital Go Operational

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Some 94 investment projects with a registered capital of 5.3 billon birr have become operational during the past five months, according to the Ethiopian Investment Commission

EIC Public Relations Director, Getahun Negash, said the projects have created over 3,000 permanent jobs.

The projects engaged in manufacturing, service and agricultural sectors will create additional jobs on becoming fully operational, he added.

In addition to those, 228 projects have received licenses during the same period, according to the director.

The licensed projects had deposited the 200,000 USD minimum capital required before they were allowed to start to work, it was learned.

The director also indicted that the Commission has been working together with the Ministry of Foreign Affairs and other partner organizations to attract more investment to the country.

According to Getahun, the plan to issue 2,633 licenses during the first four years of the GTP period has been exceeded.

The projects have created 61,000 permanent and temporary jobs in the stated period, he pointed out.

http://www.fanabc.com/english/index.php/news/item/1900-investment-projects-with-5-3-billon-birr-capital-go-operational

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 Turkey proposes first foreign owned bank in Ethiopia 

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Ziraat Bank, a Turkish agricultural bank, tabled its proposal to the Ethiopian government to open its branch in Ethiopia, Capital learnt.

The bank has sent its proposal for the government to operate in the country, but the nation’s law and the ruling party’s policy strictly prohibits operation of any foreign financial institutions in Ethiopia.
A delegation from the bank, which is known as one of the top two banks in Turkey, is expected to visit relevant offices in the near future to talk about forming the bank in Ethiopia.
Turkey is one of the three major FDI promoters in the country along with China and India. Within almost a decade Turkish investment in Ethiopia has reached USD three billion, which is expected become even higher this year.

Representatives from several companies accompanied the Turkish Economic Minister, Nihat Zeybekci, in December. During this visit the minister mentioned opening a bank for top government officials.
Osman R. Yavuzalp, Turkish Ambassador to Ethiopia, confirmed that the bank submitted a proposal to the government.
He told Capital that officials of the bank will come to Ethiopia to talk about the formation of Ziraat, which is state owned, here.
“We will negotiate this from our side but it will depend on the talks with Ethiopian officials,” he said. “Ethiopia has the final say because the establishment will be based on the rules and regulations of the country,”Osman explained.

After Christmas, a Turkish delegation will come here to talk about technical issues first and details will follow.

http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=4849:turkey-proposes-first-foreign-owned-bank-in-ethiopia-&catid=54:news&Itemid=27

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City to Launch Ground Water Project

Addis Ababa Water and Sewerage Authority announced that it is going to launch a ground water project that would avail 86,000 cubic meters of water in a day to inhabitants of the capital city.

The authority has concluded a 47-million birr contract with the Federal Water Works Design and Supervision Enterprise which would provide designing and consultancy services. 

In another development, the Omo Rift Valley Private Limited Company has started work after it concluded over five million birr agreement with a Turkish company to provide study, design and consultancy services for irrigation development.

The project is undertaking the study on 6,000 hectares of land in South Omo, it was indicated.

The company is reportedly expected to finalize the work within four months.

http://www.fanabc.com/english/index.php/news/item/1897-city-to-launch-ground-water-project

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 Chinese Solar Home Systems to Light up Rural Ethiopia

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The 11,488 solar systems from China were bought for 2.8 million dollars

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The Ministry of Water, Irrigation & Energy (MoWIE), through its Rural Electrification Fund (REF), has procured 11,488 solar home systems (SHS) from the Chinese Company Cecep Oasis New Energy Company, which are expected to be delivered within three weeks.

The IDA provided the financing, a total of 2.8 million dollars, for the purchase of the systems which will be distributed to 11, 488 households that are members of the 207 cooperatives in the regions.

At different times previously the Ministry had procured and distributed institutional solar systems, says Yisehak Seboka, the Rural Electrification Fund (REF) Coordinator at the Ministry. The first was in 2006 when 200 health posts received these systems.

Out of these systems, Afar received seven, Somali 14, Benishangul-Gumuz four, Southern Nations, Nationalities and Peoples Region (SNNPR) 37, Harari two, Amhara 49, Tigray 14 and Oromia 69. Then the Ministry distributed 100 institutional solar systems to 100 schools around the country. Then the Ministry used 918,388 dollars of GEF grant to buy 270 institutional Solar Systems from Zhejiang Holly International Co., Ltd; these were distributed to as many schools. After that the Ministry bought 345 institutional solar systems from the Indian M/S Lucky Export using 1.6 million dollars of GEF grant; these were distributed to 345 health institutions.

The IDA, too, had supported the home system in a much larger scale, providing 10.4 million dollars, with which 25,000 units were bought from the Chinese Poly Technologies; these were distributed to 25,000 households. A second purchase after that availed 3,735units.

The current solar home systems procurement was shipped from China on December 29, 2014.

Oromia,Amhara and the Southern regional state will be the biggest beneficiaries from the latest purchase, each getting 2,861SHSs, 2,654, and 2,346, respectively. Tigray will get 1,217, Gambella 694, Benshangul-Gumuz 494, Harari 487, Diredawa 385, Somali 250, and Afar 100.

The generation capacity of the newly shipped SHSs will be 480.7kw, which will be additional to the existing generation power of 145,149.98kw of the SHSs.

The REF, which was established in 2003, is intended for the creation of access to electricity for off-grid rural residents.

The five-year’s Growth and Transformation plan for the SHSs is to reach 150,000 SHSs, and electrifying 3,000 rural institutions.

The REF, with 40 million dollars loan from the World Bank, plans to distribute 37,000 SHSs, 176,000 solar lanterns, 100 fuel saving stoves, and construct 10,000 biogas plants until September 2017.

http://addisfortune.net/articles/chinese-solar-home-systems-to-light-up-rural-ethiopia/

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WASHING MACHINE DEMAND BOOM

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Big Brands Compete for Market Share of Key Household Item

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Aggravated by his mother’s fatigue and the stress of having to wash the household clothes every week, Mesfin Tefera, 24, a resident at a Kebele house and an employee at a bank with a monthly salary of 3,000 Br decided to buy a washing machine a few days ago.

He had heard his neighbors, who had bought a washing machine recently, saying that the LG brand grants a two-year warranty. Thus, he was searching for a similar brand at three LG branches, though he could not find the type of washing machine he wanted to buy. The LG brand is imported and distributed by Metro Plc.

There are two types of washing machines, automatic and manual. The automatic is a type that is directly linked with the pipeline and can be adjusted based on wash, rinse and spin degrees. The manual one is not however linked with the pipe line and works upon the control of the user.

The price of the washing machines is also different based on their type, brand and the weight of clothes they can wash at a time. A manual washing machine of LG brand with a washing capacity of 11 kilograms and 14 kilograms at a time are sold at 9,500 Br and 11,300 Br respectively. Whereas the automatic LG brands with 13 kilograms and 17 kilograms are sold at 35,000 Br and 37,000 Br, respectively. Similarly, the manual washing machine of Samsung brand, which is exclusively imported and distributed by Garad Plc, is sold at 8,700 per 13 kilograms and 13,000 Br per 16 kilograms, whereas the automatic Samsung brand is sold at 10,800 Br and 11,250 Br for six kilograms and eight kilograms, respectively.

The type Mesfin wanted to buy, a manual machine whose brand is LG and has a washing capacity of 12 kilograms was not available at the two branches of LG found at Merkato and Piazza, he told Fortune.

A washing machine user, Semaynesh Eshetye, 45, a house wife who resides in one of the condominium houses found around Gotera, purchased a washing machine three months ago of Hisence brand, which is imported and distributed by Glorious Plc. The machine she bought at 8,450 Br, which is a manual washing machine with a capacity of washing 10 kilograms, is making her burdens easier and saving her from additional expenses. Three months ago, she used to wash all by herself, occasionally paying to an irregular servant who comes around just to wash clothes. She said with great delight that the machine has made her burdens easier and minimizes the costs she used to spend for a washing servant, which was 600 Br per month. The machine averts drain and makes convenience to wash at one hand and to do other household staffs on the other hand at the same time.

Selamawit Kassa, 24 sales agents at Omedad, which is an importer and distributer of Panasonic, Ocean and Ignis brands, stated that there is more demand of washing machine, especially on the manual type of washing machine that has a washing capacity of 11 kilograms and 13 kilograms. This is because the manual type is convenient to use at any time despite water interruptions and is cheaper in terms of price when compared to the automatic one, Selamwit added.

With the difficulty of washing at condominium houses, most residents are demanding washing machines and the brand of Panasonic, which has a washing capacity of 10 kilograms is preferred by our customers, she added.

The average order for washing machines per one week is three times. Each time they order five machines. That means that they receive 15 washing machines, which are sold within three days in the LG branch of Churchill Street. Similarly, a Konka branch in Piazza orders six washing machines per week; the manual type and these washing machines are sold within one week. Most of the time, the buyers are newly married couples, new house owners with middle and higher living standard, Abdela Kerem salesman at Konka’s Piazza branch, told Fortune. The demand for a washing machine has been increasing since the mid of 2012, he added.

There has been high demand for washing machines since 2014, especially for the manual ones, according to Rahel Getachew, a sales manager of LG at the Churchill street branch. The reasons she mentioned for the increase in the demand of manual washing machine is simplicity of usage and water managing. Unlike its automatic counterpart, the manual one can be used with less water and if and when the water goes out, it can still be used, as it is not directly linked to pipeline. In addition, the manual can be easily used without program adjustment, which is convenient for household servants. The price rate is another factor that makes the manual type more appealing.

Manual washing machines of the Samsung brand, which is imported and distributed by Garad Plc exclusively, are sold at 13, 000 Br and 8,700 Br for machines with the capacity of 16 kilograms and 13 kilograms respectively. Whereas the automatic Samsung washing machine is sold at 10,800 Br whose washing capacity is six kilograms. Eight kilograms is sold at 11,250 Br and 12 kilograms is sold at 38, 000 Br, manager of the branch Meseret Assefa states. Though she does not want to disclose the number of machines the branch orders and sells per day or per week, she said the demand for washing machine has been increasing since the beginning of this year.

Despite this, the manger of Ariston branch of Churchill Street, who did not want his name to be disclosed, said that though there is a boost in the demand of washing machines, the increase is not significant in number. He noted as an example that during the Ethiopian New Year F&M Trading had announced under advertisement made at Radio that it had arranged a six-month payment term for private and public servants. However, there was no one who could afford it in spite of the facilitation, he said. Ariston is a brand that is imported and distributed by F&M Trading.

However, many retailers of electronic goods have confirmed that there is a trend in the increase for the demand of washing machines and that the orders the branch retailers made to head retailers is increasing both in terms of rate of order and number of machines per one order .

http://addisfortune.net/articles/washing-machine-demand-boom/

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Holidays Come with a Boost in the Oven Market

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Bread is the staple of most Ethiopian holidays, with most families preferring to make their own large round breads. And the business of supplying those households with special baking ovens, with heaters on both sides, as this thick mass of dough needs to be heated on either end is mushrooming in the city.

The business of supplying this stove is making an impact on the daily bread and livelihood of those that make them so much so that Aynu Abdella expresses amazement how his life has changed for the better over the years. Aynu, 26, has been making injera and bread baking stoves for the past six years. That was when he stopped working as a taxi assistant (woyala) and became an apprentice at a friend’s shop.

“Even when I was an assistant on a taxi, I used to earn a good deal of money; but I did not think of tomorrow and had no vision for my future,” remembers Aynu.

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Aynu Abdella in his shops in which four of the readymade Injera oven steels being seen at his back.

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That was over when his friend invited him to join him as an apprentice. Within six months after that he had opened his own business renting a small workshop around Semien Mazegaja, off Dejazmach Belay Zeleke St. In those early days he was making small stoves with one heater, gradually transitioning to stoves with double heater. Then he started making the injera ovens and more recently the bread ovens with heater on the top and bottom. The top cover of the bread stove is also transparent.

When Aynu started the business for himself, he sells three stoves a day and later one oven a month. The stoves are sold better than the ovens as the ovens require special times like holidays to be sold.

“The market for the ovens is seasonal and many come to me when the holidays approach and when they leave their placed buying a condominium house,” Aynu explains.

Aynu uses steel plate bodies for the making of the Injera ovens and the stoves that he makes. But the bread baking ovens need to be made of aluminum to avoid rust. He buys the readymade steel and aluminum plates from Merkato, the largest market place in the country for 600 Br and 1,100 Br, respectively.

In addition to these materials he has to buy sockets for 30 Br, and the switches for 1100 Br each. And the making of one Injera oven costs him 900 Br and the bread oven up to 1,500 Br.

Having started the business with just 700 Br in his pocket, he now proudly speaks as he owns a taxi cab as well as pays, rent for his house and workshop.

Another person in the business Yohannes Engidawork who started the business five years ago, leaving his mother’s home in search of job holding only 50 Br and an old Injera oven, now has one automobile and four shops with his central shop located around Arat Kilo. He started by maintaining old and broken ovens and stoves going door to door. Before he went to the making of the stoves and the ovens, he took short term training in technical schools in electronics and began working with the stoves.

“Now I want to specialize in bread baking stoves which I found interesting in its complication and satisfaction I find from working on it,” he said.

Being in the business for the past five years, Yohannes has managed to buy an automobile for himself and employs 10 workers.

“One bread baking oven takes up to 1,100 Br and is sold for 1,700 Br but they do not have market except for the holidays; the stoves have better market than the ovens,” he said.

Yohannes spends three days to make one bread baking oven and most of his customers are people that come hearing his reputation.

“The market for the bread oven is still to grow and I am spending more time on it to upgrade the quality, especially to improve its electric consumption,” he says.

One young man of 18 whom Fortune met at one such workshop was employed in order to get the experience. A friend who had for a while worked in such workshop is now working in a different area waiting for him to get enough experience so that the two could open a shop together.

The stoves that are displayed at Yohannes’ shops sell for 650 Br if they are double. The single stoves with switches and without switches sell for 250 Br and 350 Br respectively. Injera ovens sell for 1,900 Br if they are with a box for the flour mix to put in and if it has no box, it is sold for 1,400 Br. The bread ovens sell for 1,600 Br.

Although these persons remain to seem happy by the current market they have, they also have a major problem in the market linkage and getting sustainable markets.

“People say that this holiday [the Ethiopian Christmas] is bread holiday; so many buy bread ovens on this holiday than any other time,” says Aynu. “But this market is not sustainable and we might not find market for the following two or three months as there is no place to display our products.”

Aynu has been ordered to make two bread ovens for the holiday and Yohannes three ovens although the latter has already gotten the ovens in hand.

“I have at least three bread ovens in each of my four shops and they will wait for customers until the holiday approaches as our market is seasonal,” says Yohannes.

The same purpose oven that comes from Turkey that the Ethiopian Household and Office Furniture Enterprise (ETHOF) sales is priced 2,700 Br and it can bake from 2.5kg to three kilograms of dough at a time. The oven has two trays, one for the three kilograms dough and the other for the 2.5kg dough which can be exchanged depending on the size of the bread that the baker wants to make.

“The ovens and the stoves that we make are cheaper compared to the imported ones and they are easy to maintain as they are home made,” says Yohannes.

Now he plans to have one big display and selling place for the products he makes especially for the promotion of the bread ovens.

Although the culture of using these machines is yet to grow, the implication seems that the customary way of baking bread being drowned by the smoke of the woods for the fueling of traditional baking steel plates or potteries is changing.

A bakery of bread that sells bread around the Addis Abeba University on the way to Yekatit 12 Preparatory School says that except for the electric consumption, the use of electric equipment is better than the customary way.

“I make at least three breads a day that I supply to the market cutting into pieces. Using the electric ovens saved my time and I have got rid of the smoke that would happen by the wood fuel,” she says.

She sells pieces of breads that she cuts for five Br and she makes at least 30 cuts from one circle bread. She pays 100 Br to 150 Br a month for electricity.

http://addisfortune.net/articles/holidays-come-with-a-boost-in-the-oven-market/

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One Comment on “07 January 2015 Ethiopia Business Briefs”

  1. Abdu M.A May 25, 2015 at 2:44 pm #

    I have pleased on the wind farm project that is planned to be invest in weldiya& iteya l&ll.if its direction do not changed to other places. As we exprienced the huje investment of oddible oil & jeans factory which was planned to be invest in weldiya was changed by sabotage to an other places,i have a fear this huge investment too will be redirected to an other place of to those of have consisted many industries.while our town havn’t a single industry.I belive that this conspirecy will continue unless & otherwise our Amhara leaders do not stopped their cooporation for such act.

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