25 February 2015 Business Briefs



Construction of Awash- Hara Gebeya railway line launched


Construction of Awash- Hara Gebeya railway line launchedAddis Ababa February 25, 2015 –

Construction of the Awash- Weldia- Hara Gebeya railway project, which is part of the railway system that will connect northern and north eastern part of the country with port of Tadjoura, officially launched today.

Construction of the 370km long railway line is expected to be finalized within three and half years.

The project, in which its construction is being carried out by a Turkish company, Yapi Merkezi, will consume 1.7 billion USD.

Yapi Merkezi has completed the Dubai Metro Project, Casablanca tramline and Ankara – Konya high speed rail line that make the company a world brand in rail systems.

The contract agreement for the construction of the railway line was signed two years ago and the plan was to finalize the project in December 2015.

But construction of the project forced to be delayed because of problems related to securing funds from development partners.

Now the nation has managed to secure the money needed to finance the project, most of it from Exim Bank of Turkey and the remaining from other EU countries.

The partnership between the EU countries to extend the support to this project is a result of the nation’s policy that prioritizes economic diplomacy, said Prime Minister Hailemariam Desalegn during the occasion.

The railway, which will operate using renewable energy, is a manifestation of Ethiopia’s target to build environmental friendly projects that use renewable energy and minimizes expenditure on oil, he added.

The Mekele- Woldia- Hara Gebeya- Semera- Tadjourah Port railway project is one of the eight railway routs identified by the government as important to boost the transportation network within the country and with neighboring countries and ports.

A few days ago a cornerstone was laid for the construction of a 220km railway line between Mekele- Hara Gebeya- Weldia, which is part of this railway system. Construction of this project will be completed within three and half years and is expected to consume 1.5 billion USD.

Construction of these and other railway infrastructures that will boost domestic transportation system and enables the nation reach ports makes Ethiopia the leading African country in railway developments, Hailemariam said.



Ethiopia becoming one of Africa’s leading countries in railway transport network


Addis Ababa, 25 February 2015 –

The 1,500 km railway line being built in Ethiopia puts the country as one of the leading countries in Africa in railway transport network, Prime Minister Hailemariam Desalgen said.

PM Hailemariam made the remark while laying the cornerstone for the construction of the 375 km Awash-Kombolcha- Woldia-Hara Gebeya Railway Project today in Kobolcha town.

In addition to reducing environmental pollution and fuel expenditure as it uses renewable energy, the route is significant for mobility of goods and people, he said.

Transport Minister, Workneh Gebeyehu, on his part said that the government of Ethiopia will invest 1.7 billion US dollars obtained from Turkish Exim Bank and EU member countries for the project.

The railway project to be built by Yapi Merkezi, a company based in Turkey, will be finalized within three and half years, he said.

ERC Board Chairperson and Adviser to the Prime Minister with the Rank of Minister, Dr. Arkebe Equbay, said the new railway line will connect northern Ethiopia with central region.

With a running speed limit of 120 kilometers per hour, the railway line would help transport 750,000 passengers and 8.5 million tons of goods per year, Dr Arkebe said.

A cornerstone for the construction of Mekelle –Woldia-Hara Gebeya railway line at a cost of 1.5 billion US dollars was laid last week, it was noted.



Second phase of AALR to continue during GTP II


Second phase of AALR to continue during GTP IIAddis Ababa: February 25, 2015 –
The second phase of the Addis Ababa Light Railway project will continue during the GTP II, Prime Minister Hailemariam Desalegn announced today.

Speaking while laying the cornerstone for the Awash-Woldiya-Hara Gebeya railway project today, the Premier noted that Addis Ababa is home to approximately four million residents who do not have access to proper mode of transportation. A railway is believed to address this problem in the most effective manner.

As such, the AALRP is in its concluding stage and has started carrying out test rides. The Premier underscored during the coming GTP II period, the country will construct the second phase of the railway project.

The AALR spans over 34 km and will operate electric-powered trams that can go 80km/hr. It will have 47 stations and each tram can carry as much as 286 passengers. Overall, the railway will transport 60 thousand passengers in an hour.

Constructed at a cost of 475 million Dollars, the Chinese ExIm Bank provided 85% of the loan and the Ethiopian Government covered the remaining 15%.

The Prime Minister called on the public to make use of these multi-billion dollar investments with a sense of belongingness and responsibility.



EPHARM to Have New Factory for $100m


The construction, which will cost the factory up to 100 million dollars is said to follow the international standard of good manufacturing standard (GMS), which will allow it to sell the products competitively to other countries generating foreign exchange according to Mohammed Nuri (MD), EPHARM’s board of director’s chair.

The factory, which celebrated its golden jubilee last Saturday, will see its workers, which are now less than 600 increased to 1,500 when the factory becomes operational.

As the six-month report of the Ministry of Industry (MoI) for the half fiscal year of 2014/15 indicates, the performance of pharmaceuticals and medical equipment production capacity has reached 62pc. And according to the Ministry of Trade’s (MoT) 2013/14 fiscal year report, 64.3 million dollars was gained falling back from the planned 110 million dollars. This performance is only 59pc of the plan.

The government, in its five-year Growth and Transformation Plan, had planned to source 50pc of medicinal demand from local production but it achieved below 20pc.



State Minister Dewano meets a Canadian Trade Mission


Addis Ababa, 25 February 2015 –

State Minister for Foreign Affairs, Dewano Kedir, met on Tuesday (February 24) with a Canadian Trade Mission led by Senator Don Meredith.

The meeting followed the successful two-day Ethio-Canada Business Forum held (February 23-24) in Addis Ababa.

The bilateral discussions covered the overall importance of the business forum, the Trade Mission’s plans for investment in Ethiopia, the political will for stronger and more business cooperation and the potential and possible opportunities the Government of Ethiopia could offer Canadian companies.

Senator Merdith described the two-days of business meetings as the foundation for further cooperation.

He said cooperation in trade and investment between the two countries would help Ethiopia create much needed jobs for its youth and for Canadian companies to benefit from the opportunities available.

The representatives of the Canadian Trade Mission, he said, had been very satisfied with the discussions held with high-level government officials and were enthusiastic about the prospect of investing in Ethiopia.

The Senator also appreciated Ethiopia’s political commitment and its vision to reduce poverty and improve the welfare of the people.

Dewano Kedir on his part noted that Ethio-Canadian ties in the sphere of business had been minimal and stressed the need to tighten this bond of economic cooperation.

State Minister Dewano, who detailed the opportunities and potentials available, noted that Ethiopia was a staunch promoter of peace in order to set the stage for economic development, for the country and indeed the region.

He added that the country was moving ahead with clear policy directions and determined to wipe out poverty and backwardness.

The Canadian Trade Mission came to explore the business opportunities offered by Ethiopia at the two-day Ethio-Canada Business Forum as part of the events marking the 50th Anniversary of Ethio-Canada Friendship.

Twenty seven representatives of Canadian companies as well as high-level Government officials and leaders of business organizations in Ethiopia attended the forum, exchanging views on how to expand and carry forward business cooperation between the two countries.



Ethiopia, Czech Republic Agree to Boost Relations


Ethiopia, Czech Republic Agree to Boost RelationsAddis Ababa February 25, 2015 – 

Ethiopia and Czech Republic have expressed their desire to boost cooperation.

Foreign Affairs State Minister Berhane Gebrekiristos held talks today with Czech Republic Deputy Foreign Minister Peter Drulak.

During the occasion, State Minister Berhane said Ethiopia and Czech Republic have a desire to improve their cooperation in different spheres.

The state minster, who recalled that the relation between the countries has exceeded half a century, stated that the cooperation should be consolidated in trade, agriculture, and industry as well as other sectors.

The cooperation of the countries in beer, textile and leather processing has to be extended to security issues in the region, he added.

Deputy Foreign Minister Drulak said on his part the discussion would help bolster the relations of the two countries to a higher level.

Czech Republic would support Ethiopia’s peacekeeping effort not only as a country but also as a member of the European Union and North Atlantic Treaty Organization (NATO), Drulak pointed out.

Preparations are underway to arrange working visits of leaders of the two countries in order to consolidate relations and sign in parallel different memorandums of understanding, the deputy foreign minister added.



Public Transport to Sudan Very Close


For the Ethiopian Side, either Addis Abeba, Bahir Dar or Gonder Will Host the Origin and destination stations

Ethiopia is soon to begin cross border public passenger transport with Sudan. This follows a bilateral agreement made between the two countries a year ago.

To realise this, a memorandum of understanding (MoU) had been signed between the two countries to launch a commercial road passenger transport to be operated to and from the cities of the two countries back in 2013. During the agreement, MoU on areas of railway, trade, harmonisation and mutual assistance in customs operation had also been signed.

A discussion that will include a delegation of officials, stakeholders engaged in transportation sector and private investors of both countries will be held, Kassahun Hailemariam, director general of the Federal Transport Authority (FTA), told Fortune.

“The next step will be agreeing on the terms of implementing the operation; issues like destination and origin of each vehicle that will travel from Ethiopia to Sudan and vice versa will be decided after we had discussed with our counterpart in Sudan,” added Kassahun.

On Ethiopia’s part, three alternative locations have been chosen as origin and destination areas, namely, Addis Abeba, Bahir Dar and Gonder. Subsequently, one of the aforementioned locations will be selected on the basis of the demand from local private investors, the interest of the Sudanese and the number of passengers expected from the above locations. The price will be also set after a discussion between the two counterparts.

A technical committee has already dealt with other issues over the past year. For instance, where passengers have to stop for meals, the weight of baggage allowed per passenger and the type of vehicles eligible for this sort of travel. As far as the types of vehicles are concerned, buses at a minimum level are expected to have an air conditioning (AC) system.

“This area will be left to local public transport providers and if any public transport associations manage to provide us with the kind of vehicles we need, the door is open for all,” noted Kassahun.

There is no way that few associations will monopolize the service. Selam and Sky buses, operated by different share companies, have their own air-conditioning system. These buses are considered as a high quality means of transportation, in comparative terms.

Moreover, “since we are going to deal with cross border transportation, issue like visa and emigration will be arranged according to the law; there will be no change on the matter,” said Kassahun.

Different stakeholders from both countries are scheduled to meet on February 25, 2015, and facilitate the commencement of the service; this meeting will focus on clearing the paths that will lead to launching the service, said Abelneh Agidew, communications director at the FTA.

“We are hoping that the transportation service will begin in the current fiscal year,” Kassahun told Fortune.

As far as trade and economic relation is concerned, the presence of Sudanese owned projects has reached 289 projects at different levels with 13.7 billion Br. Sudanese are the first foreign companies from Africa in terms of both the number of projects and volume of investment.



KEFI bolsters Ethiopian team with mine operations veteran

KEFI bolsters Ethiopian team with mine operations veteran Addis Ababa: February 25, 2015  –
KEFI Minerals has appointed a new head of operations and managing director in Ethiopia to bolster the team developing its Tulu Kapi mine.

Wayne Nicoletto, who will report to executive chairman Harry Anagnostaras-Adams, has worked for more than thirty years as a metallurgist and general manager at gold mines in Africa including the Edikan Mine in Ghana and SMD in Guinea.

Harry Anagnostaras-Adams, KEFI’s executive chairman, said Nicoletto’s extensive experience would assist in finalising the development plans, operational team building, mine contracting, equipment selection, tendering, construction and production as it moves towards the start of construction at Tulu Kapi.



Revenue in Oromia surpasses GTP target


Revenue in Oromia surpasses GTP target Adama February 25, 2015 – 

The Oromia Revenues and Customs Authority announced that it has already met the target set in the five-year growth and transformation plan (GTP) period.

The Authority has collected 29 billion Birr revenue during the past four and half years, a 9 billion Birr increase compared to the target, said Authority Director General Yohanes Dinkayehu.

The Authority has collected 7 billion Birr during the first six months of this fiscal year, which he said exceeded the target by 1 billion Birr.

He attributed the success for introduction of modern tax systems, and establishing groups of tax payers that helped to implement the system. These groups helped 150,000 illegal traders join the legal taxpaying system.

According to Bahiru Ashine Deputy Head of marketing bureau, the concerted efforts helped the state to double number of tax payers during the reported period from 150,000 at the beginning of the GTP period.



South Boulder Mines Colluli potash resource swells to 1.28Bt


Wednesday, February 25, 2015 by Proactive Investors

Colluli is one of the largest potassium sulphate resources globally, with a Pre-Feasibility Study for Potassium Sulphate production on track for completion in February 2015.Colluli is one of the largest potassium sulphate resources globally, with a Pre-Feasibility Study for Potassium Sulphate production on track for completion in February 2015.

South Boulder Mines (ASX:STB) has delivered a significant increase in 2012 JORC mineral resource at its Colluli Potash Project in Eritrea to 1.289 billion tonnes with an average grade 10.76% K2O.

The mineral resource estimate was carried out by AMC Consultants and is as a result of previous work conducted by Ercosplan Ingenieurgesellschaft Geotechnik und Bergbau mbH (Ercosplan).

The review was carried out in preparation for the allocation of the maiden Reserve for Colluli, which will also be completed by AMC.

Paul Donaldson, managing director of South Boulder, said: “This is an excellent outcome. As well as 210 million tonnes of uplift in the Mineral Resource estimate, 97% of the Mineral Resource now sits in the Measured and Indicated categories.

“There is no question about the size and potential of the Colluli resource.

“It will form the backbone of what will become a significant project in the future. This work verifies this as one of the largest potassium sulphate resources globally.

“It is also appropriate that we change our resource grade reporting from % KCl to % K2O at this juncture, due to the combination of salts in the resource which favour the production of potassium sulphate (SOP) and is the focus of our pre-feasibility study.”


Resource highlights include 97% in the Measured and Indicated categories:

– Mineral resource of 1.289Bt, average grade 10.76% K2O;
– Contained K2SO4 (Potassium Sulphate) equivalent1 of 260Mt;
– Resource uplift of 210Mt mineralised material; and
– 97% of mineral resource in Measured and Indicated categories.

The Colluli deposit comprises:

– Measured mineral resource: 303Mt at 10.98% K2O;
– Indicated mineral resource: 951Mt at 10.89% K2O; and
– Inferred mineral resource: 35Mt at 10.28% K2O.

Colluli is a very large, long life, at surface deposit, that is highly amenable to open cut mining methods and is in close proximity to the coast.

The project hosts one of the largest potassium sulphate resources globally, with a Pre-Feasibility Study for Potassium Sulphate (SOP) production on track for completion in February 2015.

South Boulder and the Eritrean National Mining Company (ENAMCO) are equal shareholders of the Colluli Mining Share Company (CMSC) which will develop the Colluli Potash project.
Colluli resource composition

The resource comprises three potassium bearing salts; sylvinite, carnallitite and kainitite.

These salts are suitable for the production of potassium chloride and/or potassium sulphate and potassium magnesium sulphate.

Potassium sulphate and potassium magnesium sulphate are high quality potash fertilisers that carry a price premium over the more common potassium chloride.

Potassium sulphate and potassium magnesium sulphate have limited production centres globally.

Substantial upside for the project exists from the exploitation of other contained products within the resource such as high purity rocksalt, kieserite (magnesium sulphate), gypsum and magnesium chloride.
Colluli located 75 kilometres from port

The Colluli potash project is situated in the Danakil region of Eritrea, 300 kilometres south-east of the capital city, Asmara, and 180 kilometres from the port of Massawa, which is Eritrea’s key import/export facility.

The project intends to construct an export facility at Anfile Bay which is located 75 kilometres from the Colluli mine site.

The Colluli resource is located around 70 kilometres from the coast making it one of the most accessible potash deposits globally.

It is favourably positioned relative to key growth markets for potassium-bearing fertilisers, commonly known as potash, and is the shallowest known potassium bearing evaporite deposit in the world with mineralisation starting at 16 metres.

This makes the resource amenable to open cut mining methods.

Recent Activity

Earlier this month, South Boulder completed metallurgical testwork for the project, which eliminated the need for fine grinding from the process plant circuit.

It also identified a number of internal plant configurations and the company kicked off optimisation work to further enhance DFS process design and internal plant configuration.

Potassium recoveries of over 85% have been modelled from optimised PFS flotation tests, and incorporation of solar recovery ponds.

Mini piloting has commenced, with key areas of focus including reducing plant water and infrastructure requirements, minimising reagent consumption, and maximising potassium recovery.

Plant commissioning and ramp-up profiles have been established, and preliminary results of the advanced metallurgical testing indicate potential improvements in plant configuration, equipment requirements and product mix for the DFS.

A technical review team is currently being assembled to conduct a final review of the process plant and solar pond design, underlying assumptions and testwork results before finalising the DFS process flow diagrams.

Cashed up

South Boulder had $7.5 million in cash as at the end of December 2014 and has raised $2.05 million in January through the placement of 10 million shares at a 6% premium to market.

Next key catalyst

– The PFS for potassium sulphate production is on track for completion in February 2015.

Milestones ahead

– The Maiden Reserve which will be completed by AMC Consultants.
– Completion of a high quality DFS in Q3.



Addis Hosts Argus FMB Africa Fertilizer Conference

 argusArgus FMB Africa Fertilizer Conference was held in Addis Abeba from February 18 to 20, 2015.

The conference attracted over 400 delegates from across the fertilizer supply chain in Africa and internationally. Representatives from over 50 different countries attended the conference, which focused on the steps needed to boost production and consumption of fertilizer in Africa according to Mitiku Kasa, state minister of Agriculture during his opening speech.

The conference, which is said to provide a platform to meet and do business with leading global producers, traders and distributors of fertilizers, has made the participants visit the fertilizer blending factories that the country is now building.

Ethiopia, which had embarked on soil fertility assessment and identified the contents that are missing in the specific areas is constructing four fertilizer blending factories which will bring the number of fertilizer blending factories in the country to five.

A fertilizer-producing factory is also being built in Yayo, in western Ethiopia Illubabur Zone, which is one of the five factories that the government plans to construct with 2.8 billion dollars.



Ministry of Health focuses on quality, equity in GTP II


Addis Ababa, 25 February 2015 

The Ministry of Health said that it will work its level best to ensure quality and equitable health service in the second Growth and Transformation Plan Period, GTP II.

It also stated that the nation has achieved 95 per cent of the envisaged health service coverage in the first GTP period.

In an exclusive interview with The Ethiopian Herald, Health Minister Dr. Kesete Birhan Admassu said that Ethiopia has done very well in terms of translating its Growth and Transformation Plans into reality and achieving goals and targets in the health sector.

The prominent target, the Ministry set for itself at the launching of GTP I, was to achieve the Millennium Development Goals. Ethiopia was hence well on track in achieving all the three health related MDGs. In fact, it has achieved MDG-4 which is about reducing child mortality. Thus, the Ministry has achieved the set goal three years ahead of schedule, he added.

Dr. Kesete Birhan further said: “We are also doing well in terms of arresting communicable diseases. Ensuring access to health facilities is the other target we set for ourselves. Therefore, today, Ethiopia has achieved 95 per cent health service coverage. That means, we have built and furnished around 3,500 health centers. We have also multiplied over the number of primary hospitals in the country. In the course of the GTP period alone, we have constructed around 200 hospitals which have become operational. This has tremendously increased access to hospital services,” he added.

Recalling that the country was beset by the dearth of manpower in the past, Dr. Kesete Birhan said that the other target the Ministry eyes at is increasing the number of health workers in the country.

“In this regard, we have redoubled efforts particularly in areas where we have acute shortage of human resource.” Regarding midwives for instance, over the last four years, the Ministry has given midwifery courses to 6,000 health workers that have been deployed at the various health centers and hospitals around the country.

“We have also a plan to increase the number of medical schools. We have now 28 public medical schools that train medical doctors. Currently, the number of medical doctors stands at the 6,000 mark. The steps taken in this regard have significantly improved the doctor-population ratio. Pertaining to new graduates, who are expected to join the task force down the road, starting form 2015, we will have at least 3,000 medical doctors graduating every year, he added.”

Justifying that the Ministry would give special emphasis to ensuring quality and equity of production in the next GTP, Dr. Kesete Birhan said: “While we improve access to health service, we believe fine-tuning accessibility with quality is mandatory. Therefore, in the upcoming five years, the focus will shift to improving the quality of health care service starting from the community level and the health post up to tertiary hospitals. We will have key performance indicators that would show whether the service we are providing to the public is of acceptable quality,” he added.

And the Ministry will also focus on equitable treatment, it will narrow down the disparity between urban and rural areas (even far flung corners of the country) as well as between the poor and the rich segments of the community. The Ministry is thus gearing up to outreach all Ethiopians with an unprecedented stepped up effort, the Minister said.



Plan to raise daily individual water consumption to 100L to be implemented

Plan to raise daily individual water consumption to 100L to be implemented Addis Ababa: February 24, 2015 –
A reformed plan for clean drinking water distribution will be implemented.

Minister of Water, Irrigation and Energy Alemayehu Tegenu said the individual daily water consumption will reach 100 liters in the second phase of Ethiopia’s Growth and Transformation Plan.

The plan categorizes cities in the country into five based on their population size. As such, cities with a million plus population will receive 100 liter of water per day on an individual basis.

At the end of the second phase of the GTP, the country aspires to have a 95% coverage of clean drinking water in all urban areas in Ethiopia.

State Minister of Water, Irrigation and Energy Kebede Gerba said activities aimed at sustaining water service institutions and taps will be carried out. He added a strategy to manufacture equipment locally has been devised to save hard currency.



Ethiopian women cooperative increases incomes thanks to FAO-Eataly partnership


Ethiopian women cooperative increases incomes thanks to FAO-Eataly partnership Addis Ababa: February 25, 2015  –
A cooperative of women in Ethiopia is set to reach the international market thanks to a partnership between Italian gourmet food store Eataly and FAO.

The two joined forces in 2013 to support family farmers around the globe in boosting their production and finding ways to reach new overseas customers. The work with the women’s cooperative is one example of this collaboration.

For a few years Tsega Gebrekidan Aregawi ran a small kiosk in the northern Ethiopian town of Mekelle, where local university students would stop by to purchase fresh fruit juice, biscuits and homemade marmalades on their way to and from class.

It was a small operation. At that time Tsega could hardly imagine that some of her own products might someday fly from Africa to reach international markets.

But things changed last year when FAO and the Italian food chain Eataly reached out to her and her five-woman cooperative with a challenging offer.

Founded in northern Italy in 2007, Eataly has grown into a global, high-quality food and beverage chain that combines culinary excellence with tradition — with a special focus on small-scale production, sustainability, and fair trade.

FAO and Eataly offered Tsega and her colleagues support in producing more cactus pear marmalade, which would be then bought and shipped to European tables.

The group rose to the challenge. So far, they’ve produced 4,000 jars of marmalade and are now looking at using the revenues to even expanding their output and the variety of what they produce.

To help them in this effort, trainings were organized to help them improve their performance during harvesting as well as to increase their quality standards. The Ministry of agriculture has been providing technical assistance throughout.

Over the last few months, Tsega and her colleagues have been working hard to produce over 1,500 kg of jam that meet Ethiopian and European food safety standards. The cooperative has also benefited from Eataly’s knowledge sharing on best practices for packaging and marketing and their 4,000 jars of jam are now ready to travel to Rome, where they will soon reach the shelves.

The cooperative’s working space consists of a closed compound with separate spaces for raw fruits, production and the storage of glass jars. The raw fruits, purchased from local growers, are washed and cleaned in an outdoor space.

In this pilot phase, daily production has reached 200 jars. Each of them will be bought at 3.50 EUR, a price considered in line with local market standards and which covers production costs and guarantees significant revenues for its members.

Some of the women in the cooperative are still quite young, but those who are mothers see in this work an opportunity to guarantee an education and a better future for their kids.



Insurers Seek Central Bank Approval to Form Reinsurer Firm


Currently, local insurers cede up to 30pc of premiums to foreign reinsurers


reinsuranceThe Association of Ethiopian Insurers has submitted a request to the National Bank of Ethiopia (NBE) two weeks ago for the approval of the formation of the first reinsurance firm with a one billion Birr subscribed capital.

The establishment was initiated following the issuance of the Reinsurance Company Establishment Directive by the NBE in April, 2014, according to Kiros Jirane, president of the Association of Ethiopian Insurers and CEO of Africa Insurance SC.

After the issuance of the directive, the Association established an organizing committee that is chaired by Kiros for the establishment of the reinsurance firm. The committee has 15 members composed of 13 chief executive officers of the insurance firms and two from the Ethiopian Bankers Association (EBA), including the presidents of Addis International Bank and Bunna International Bank.

Reinsurance, which is also known as “insurance for insurers” or “stop-loss insurance”, is a practice of insurers transferring portions of risk portfolios to other parties by some form of agreement in order to reduce the likelihood of having to pay a large obligation resulting from an insurance claim. The intent of reinsurance is for an insurance company to reduce the risks associated with underwritten policies by spreading risks across alternative institutions.

Reinsurance companies will be formed as share companies, wholly owned by Ethiopian nationals and organizations. No shareholder shall have more than a five percent share in the company. The capital of the company will be at least 500 million Br, which ought to be fully paid up in cash and deposited in a blocked bank account, according to the directive issued by the central bank.

The company will have 100,000 shares with a pure value of 10,000 Br each. The initial investment cost of the project, including fixed investment, preoperational expenditure and working capital is estimated at 32.6 million Br, according to a feasibility study conducted by the Ethiopian Insurance Corporation (EIC).

The absence of local reinsurers means that 25pc to 30pc of the premiums collected by domestic insurers had to be paid up to foreign reinsurers in the form of reassurance premium, according to the feasibility study by the EIC. The study by the EIC includes organization of the company, underway capacity, and implementation schedules.

In the 2012/13 fiscal year, the 17 insurance firms in the country paid 1.2 billion Br premium for the reinsurers from the 4.8 billion Br they collected from their clients, according to a data from the NBE.

“Members of the association have already promised 620 million Br for the establishment and the remaining money will be raised from availing shares to the market,” Kiros told Fortune.

The four new insurers including, Berhan Insurance S.C, Lucy Insurance S.C., Tsehay Insurance S.C and Bunna Insurance S.C are not included in the establishment of the reinsurance firm as they are not members of the insurers association; they have been told to be members before the end of February 2015.

“We are awaiting board approval to be a member of the insurer association and become the founding members of the company,” Alemseged Abreham, the CEO of Lucy told Fortune.

The organizing committee requested the NBE for the approval of the firm and to open a closed account for the firm two weeks ago, which will be used to collect the establishment capital and it is waiting for a response from the NBE, according to Kiros.

The organizing committee is also in the process of establishing an office to run the project and to update the feasibility study that was conducted by the (EIC) and Public Finance Enterprise Agency, on July, 2012 about the prospects of reinsurance firm establishment. From 13 individuals who submitted their CVs for the manager position of the project office, we will select and hire one after evaluating the documents in the coming two weeks, said Kiros.

The insurance industry had an aggregate capital of two billion Br by the end of 2013/14 fiscal year, an increase of 500 million Br from the preceding year. The number of insurance firm branches has also grown to 332 by adding 59 new branches during the last fiscal year, 55pc of which are located in Addis Abeba, according to data from the NBE.

The major global reinsurers include Munich Re, Swiss Re, Hannover Re, and so on. Ethiopian insurance companies mainly rely on Munich Re, Kenya Re and Swiss Re.

The company will be fully operational in the coming six to 12 months, according to Kiros.



Indian Denim Factory Begins Yarn Production


Factory expects to start denim fabric production in a month for local and export market


kanoriaKanoria Africa Textile Plc, established by Indian owners, began yarn production last week in preparation for the planned commencement of denim fabric manufacturing in May 2015 at its plant in Bishoftu (Debre Zeit) in Oromia.

The company obtained on investment license two years ago and built its factory on a 155,000sqm plot in Bishoftu with installed capacity of 10 million metres of fabric peryear. The factory, which Jay Soyanter, Marketing Vice President of the company, says will employ 600 people, and will produce both yarn and denim for textile and garment factories. It is the factory established with a capital of 35 million dollars.

The factory will sell its products in Ethiopia as well as export to African, Asian and South American markets, says Soyanter. Kanoria will use cotton procured from the local market and imported from Indian and Pakistan.

“There is a big potential for the investment of garment and our company wanted to meet the denim fabric demand of the country, which were mainly imported from Pakistan, Bangladesh, Turkey and Sri Lanka,” said Soyanter.

The company is looking forward to the commencement of operation over the next four to five months of the five textile factories, among those are A.N.F Garment Factory, established by Pakistani owners and Atraco Textile Factory, both located at the new Bole Lemi textile zone in Addis Abeba.

In Ethiopia, there are 130 medium and large-scale textile and garment factories, of which 37 are owned by foreign investors while the remaining are owned by domestic investors.

From the foreign textile factories, Ayka Addis, established with a capital of 140 million dollars by Turkish owners, has the largest production capacity with 20tns of yarn and 40tn or 70,000 pieces of garment a day. Ayka Addis employs 10,000 people.

The second largest textile factory, Almeda Textile Plc, established in February 1996 by the Endowment Fund for the Rehabilitation of Tigray (EFFORT), with a capital of 594 million dollar, employs 2,500 people. It has a yearly production capacity of 7,020tn of yarn, 16,751,100tn of grey fabric, 15,387,000tn of processed fabric, and about one million pieces of basic shirt equivalent garments, says its owner, EFFORT.

Another garment and textile factory , MAA garment and textile factory, owned privately by Kebire enterprises under Midrok Ethiopia Plc, has a production capacity of 10 tones of spun fiber per day and 6,000 kilogram of dyed products per day. MAA garment was established in June 2004 and has 1,300 employees.

“The new denim factory is beneficial in terms of transferring technology advancements and knowledge to the country, saving foreign currency, meeting the high demand for denim fabric and creating employment opportunities,” said Bantihun Gesese, Ethiopian Textile Industry Development Institute Corporate communication Director.

Ethiopia’s textile and garment sector has been a poor performer over the past years, with one of the major problems being the poor supply of cotton, and others being poor planning and management, according to earlier government reports.

In 2013/14 Ethiopia made 111.3 million Br from the export of textiles and garment, which showed an improvement of 12.5pc over the previous year, although it was just 31.8pc of the target of 350 million dollars. Bantihun says that the 14 million dollars earned from export during the month of January 2015 was a result of the increased attention from the government.



FAO launches new project to support Ethiopia’s livestock sector

Addis Ababa, 24 February 2015 –
The United Nations Food and Agricultural Organization (FAO), in collaboration with the Ministry of Agriculture, has today launched a project that aims at enhancing the livestock sector in Ethiopia.


The project, Improved Animal Health Service Delivery- Pursuing Pastoral Resilience (PPR), is designed to boost the social and economic importance of livestock at the household and national level by improving animal health service delivery.

Ethiopia is rich in livestock resources which constitute an important asset and livelihood base for the majority of the population engaged both in mixed crop-livestock farming and pastoral production coupled with very insignificant commercialized systems. However the sector’s input to the country’s food security and poverty alleviation is minimal compared to its potential. It has always been affected by disease related constraints.

Speaking at the launching workshop, Dr Gebreegziabher Gebreyohannes, state minister of the Ministry of Agriculture for Livestock Development, said that Ethiopia has given due attention to the sector in the first phase of country’s growth and transformation plan (GTP), which will come to an end this year. MoA “is using different strategies to develop the sector in the coming GTP,” he said adding the second phase of GTP will also contribute to the government’s effort to develop the sector.

The project is funded by the European Union under its SHARE program amounting 9.3 million Euros to implement a progressive control program for peste des petits ruminants (PPR), also known as sheep and goat plague, a highly contagious animal disease affecting small ruminants.

The project, which will be carried out for 42 months period during 2014-2017, is expected to build the capacity of federal, regional and district level public veterinary services and the private sector service sector along with the public private partnership (PPP) approach.



French Firms Recommend Several Urban Centres for Ethiopia

worldbankFrench firms, hired by the government, reported that the existing urban system in Ethiopia was dominated by the primacy of Addis Abeba and characterized by low urban infrastructure and services, poor housing and weak governance; secondary cities played a minor role in supporting regional development.

The Ministry of Urban Development, Housing & Construction (MoUDHC) has hired an international firm to conduct the first national urban study, the study which costs 51.9 million Br will be finalized in the coming three months.

The 51.9 million Br study, financed by the World Bank, is titled “National Urban Development Spatial Plan”. It is being carried out by a French consultancy, Egis international, in association with IAU-IdF and Urba Lyo. Egis is a French based company that is engaged in engineering and consulting in the sector of transport, urban development, building water, environment and energy, having 12,000 employees over 100 countries. The company has been giving various consultancy services on road construction, design and supervision in Ethiopia for the last 20 years.

The plan endeavours to assess the existing problems and anticipate opportunities, challenges and problems the future might convey regarding location, size and function of key urban settlements across the country, how they are linked together, how they interact with their hinterlands, according to Gabriel Deribe, country manager of Egis International.

The company submitted part of the study titled “The Existing Situation and Diagnostic Report” in December, 2014, to the Ministry of Urban Development, Housing & Construction (MoUDHC). This study incorporated 12 cities, including Addis Abeba, Mekelle, Bahir Dar, Komblocha and Welkite. The study was presented to the Prime Minister and regional authorities for discussion on January 31, 2015.

In order to break the trend of the dominance of Addis Abeba and the secondary importance of other urban areas, the study suggested a polycentric urban development scenario where few major urban areas will be the base for the growth of their respective hinterlands with a focus on manufacturing and service economic activity.

“The urban scheme is supported by complementary corridors that connect the main secondary cities so facilitating the inter-regional exchanges of goods and services. These cities are expected to be providing services for their large hinterlands supporting rural/agricultural development. Combined with higher productivity, this scenario allows Ethiopia to accelerate the process of reaching middle income status,” Gabriel said.

The study is conducted based on the Urban Planning Proclamation No. 574/2008, which considered National Urban Development Plan Scheme in order to bring balanced and integrated development, stated member of the study technical advisory committee. Regional urban studies have been conducted taking into account their demography and hinterland, infrastructure provision but this study is the first to be conducted at the national level, he added.

The Study took the existing urban organization of the country, the demography and economic trends, committed and planned projects, and the policy regime and targets of the government into consideration, explained Gabriel. Various ministries participated in the study which will be an input and drive to their policy and strategy focus as well as the country’s next Growth & Transformation Plan. But for the successful implementation of the study key challenges in poor designing, rudimentary physical planning, ineffective management should be addressed, the Egis’ study cautioned.

Egis was among the 21 companies that had responded to the expression of interest notice announced on September 29, 2012. Six were shortlisted, including Khatib & Alami Consulting Engineering, which is a 50 year-old Lebanese company and Niras International, a multi disciplinary consultancy company established in Denmark in 1956. After winning the technical and financial evaluation, Egis signed the contract on January 9, 2014.



Alisha establish marble processing plant


Addis Ababa, 24 February 2015 –

Alisha Mining Plc, an Indian mining firm, established a marble processing plant in Ethiopia at an outlay 2.5 million US dollars. The plant is set up at Burayu city, Oromia State, which is located west of the capital city and sits on 20,000 square meters.

General Manager of the Indian firm, Ahan Shailesh Hingrah, noted the company imported latest marble cutting machine (Gangsaw) and polishing machines from India and China.

According to The Reporter, the company has finalized the construction of the processing plant and already installed all the machineries.

According to the manager, the plant started production on Tuesday, February 3, 2015. The plant is said to have a capacity of producing 360,000 square meters of polished marble in a year. The factory produces marble slabs that have the size of 2.52 meters by 1.37 meters.

Hingarh commented, “We are producing high quality marble slabs and have started storing it for potential customers. Once we start promoting the company we will have many customers and we do not want to run out of stock. We already have 2000 square meters of marble slab in stock.”

Two years ago Alisha Mining acquired a marble quarry near Mendi town, Benshangul Gumuz State. Currently the quarry is producing 2,400 to 3,000 cu.m of marble blocks every month. The marble blocks are then transported to Buray where they will be cut into slabs and refined by a 16 head polishing machine. “Our marble quarry is of high quality. So we are producing very high quality marble,” Hingarh commented.

Other than marble slabs, the processing plant manufactures marble floor tiles that are of different size. “We are producing high quality marble products which can be supplied to hotels, real estate and residential houses. The marble quality is so high that it resembles the materials that the Taj Mahal is made of. So buyers in India have shown interest to buy our products,” Hingarh explained.

He furthered the aim of the company is to generate six million US dollars in a year. The company intends to export 40 percent of its production and channel the rest 60 percent to the local market. According to the general manager buyers in Spain, India, Saudi Arabia and China have already shown interest. “We have started receiving orders,” he said.

Currently the company has employed 30 Ethiopian nationals and the management intends to increase the number to 100 in three months of commencing operation.

Alisha has a future expansion plan. Hingarh explained the company is going to import two additional Gangsaw machines. “We also have a plan to install machines through which wastage of marble can be used for raw materials for paint and we want to install machines which can make monument from marble which have a huge demand in Europe.”

In addition the marble manufacturing business the Alisha’s parent company is intending to invest in real estate business, the general manager explained. It is already in the process of constructing high rise building in the capital of Ethiopia. It has occupied a plot of land around Wollo Sefer in order to construct 15 storey multipurpose building. The building is going to be commercial center and apartment.

In addition to this Alisha Mining is keen to invest in coal and iron ore exploration and production investment projects.

Hingarh noted the total investment in Alisha Mining has been done by its shareholders and no loan has been taken from banks.


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