India exploring investment opportunities in Ethiopia
A delegation of Indian investors from various sectors came on a three-day visit here during the course of which they met Ethiopian officials to discuss multi-sector projects that would benefit the two countries and strengthen the long standing Ethiopian-Indian diplomatic and socio-economic relations.
The 24 business delegates came from sectors including IT, infrastructure, hospitals, power and natural gas, paper and industries, plastic, mining, stainless mills and, for the first time, from the entertainment industry.
“The delegation members received positive response and information that will be able to help them establish the kind of business they would like to invest in and they would like to come back in a month or two to investigate more on the opportunities and business environment,” said Ishwarya Lakshmi, editor in chief and publisher of World Reflections Magazine, who organised the visit along with the Ethiopian embassy in Delhi. she told IANS.
“This is a mutual benefit because it will help create job opportunities for both nations,” she told IANS.
For most of the delegates, this was their first visit to Ethiopia. They understand that Ethiopia is the fastest growing economy in Africa and the infrastructure development is suitable for new opportunities compared to other African countries they have been to, says Ishwarya, adding that Ethiopia is exceptionally open to investment and development potential.
“The investment opportunity is already there in place to be explored by the Indian businesses and government’s investment policy as India went through the same growing process. Though the Indian businesses and investors have already invested in almost every sector, there is opportunity for more areas of investment.”
The delegates met officials from the ministry of health (MoH), ministry of mines (MoM), ministry of water, irrigation and energy (MoWI), ministry of foreign affairs (MoFA), and ministry of information, technology and communication (MoITC) among others. The Indian embassy here helped them with the guidelines of the business environment and provided them relevant information, according to Ishwarya.
Among the delegates, she also states, some of them would like to come back in a few weeks or months to plan and go ahead further with their investment plans. In order to help them get an insight as well as information about the country, delegates from the Ethiopian Investment Commission made a presentation about Ethiopian investment policy, investment and market opportunities and showed the priority areas for Indian investors.
Questions raised by the business representatives were answered and finally they agreed to work in the areas of mining, health and other investment areas.
A printing company would like to establish a new technology paper and printing plant. The printing sector in Ethiopia is monopolised by the government and is of no good quality, according to an owner of a small printing enterprise who requested anonymity.
“We would like to benefit from outside technologies as the government has monopolised this area of investment that is not so much open for others but the Indian press people who came said they can give better support to this local printing press and provide better quality products,” he said.
Others like the hospital sector said they would also like to understand the healthcare sector in Ethiopia and the kind of technologies that would be required and would be back.
An interesting member of the delegation was Mohammod Ali, who has acted in movies in Bollywood and Tollywood movies in collaboration. Mask Productions and BTV are also planning to invest in the nascent Ethiopian movie industry.
250 mln Birr improvement project on Jimma Abajifar Airport inaugurated
The Premier noted on the occasion the airport will boost import export trade and enhance the growing economy of the country. The airport will enable local agricultural produce to be swiftly transported to their destinations while maintaining their freshness. It would also increase tourist flow to the historical Abajifar Castle located in Jimma, he added.
Research in the region is also set to benefit from the newly improved and inaugurated airport, it was noted.
President of the Oromiya Regional State Muktar Kedir said the airport will allow residents of Jimma and its environs to have access to a modern mode of transportation.
The airport has a standard runway and passenger terminal. The Ethiopian Airports Enterprise has now increased its airports to 20 from 17. The enterprise is working to reach 25 airports in the second Growth and Transformation Period, set to begin next Ethiopian year.
Antonoil Wins New Technical Services Project in Ethiopia
The contract value totals approximately RMB200 million for an effective period of 2 years, consisting of RMB130 million of cementing services and RMB70 million of drilling fluid services. The project is expected to commence operation in the second half of 2015, and shall be completed in two years.
The signing of this contract signifies Antonoil’s efforts to establish strategic cooperation with Chinese non-SOE investors in overseas markets. The Group’s drilling services have expanded further into new overseas markets, which will provide new impetus for its growth.
Ethiopia Plans Manufacturing Hub With $10 Billion Factory Parks
Repi Wilmar Alleges Seven Billion Birr Investment on 14 Factories
This significant investment will contribute to diversification of the manufacturing sector and boost exports.
Establishing a Grade-1 construction firm or negotiating a deal with a Chinese construction firm – both in four weeks – are the options for the businessman who had Prime Minister Hailemariam Desalegn laying a foundation stone last week for what is claimed to be a seven billion Birr investment on 14 new factories.
Construction will begin on June 15, 2015, said Kamil Sabir, the managing director of the Repi Wilmar Manufacturing Complex on May 10, 2015, when the Prime Minister graced the huge tract of land, 100ha, which the company leased in Sebeta, 25kms south of Addis in the Oromia regional state. But as of now the company is yet to decide who will undertake the construction work.
Repi Wilmar is a company established by Repi Soap & Detergent Factory and Wilmar International Ltd, a Singapore company, with 50pc share each.
Repi, a company in the Alsam Group, is one of the major importers of edible oil in the country. It formed Repi Wilmar in August 2014 after eight of its executives visited the different factories of Wilmar.
The first phase of the construction, which will be conducted with an investment of 3.5 billion Birr, will build 10 of the total 14 factories. The factories to be constructed in the first phase include a palm oil refinery, soap detergent factory, and a sodium silicate melting and packaging plant. These are planned to be completed within 18 months, according to Kamil.
The second phase of the factories will see the construction of a wheat milling factory, fertiliser factory, pasta factory and a soybean oil refinery.
“The products to be produced by the complex are intended to supply the Ethiopian consumer market as well as for export to surrounding countries,” said Kamil.
The planned export destinations are Sudan, Somalia, Yemen and Kenya, with the anticipated operation of Ethiopia’s railway projects to facilitate transportation.
The transformation of traders to manufacturers in their particular fields, is one of the major considerations of the coming Growth and Transformation Plan (GTP II), said Hailemariam who was with Muktar Kedir, president of Oromia as well as other officials.
The first of the 14 factories, which will be the palm oil refinery, will come in two year’s time and will have the capacity of producing 420,000tn a year, which is intended to cover 80pc of the total market share. This factory will use crude oil imported from Singapore and Malaysia, which will be transported on Wilmar’s ships.
Wilmar, which currently processes and merchandises palm oil, is the owner of oil palm plantations in Asia, an oilseed crusher in China and manufacturer of the oil brand named Viking for the Ethiopian market.
“We are not strangers to the Ethiopian market,” said Kuok Koon Hong, chairman of Wilmar International. “We intend to duplicate many of our manufacturing plants in Ethiopia.”
For the simplification of transporting crude oil, Repi Wilmar will also construct a depot in Djibouti on a 60,000sqm plot of land.
According to Kamil, soil testing will begin this week, for the coming construction. Kamil did not say, however, how Repi Wilmar could establish a Grade-1 construction company and be ready to begin construction in four weeks. However, he said that if the construction company is not established, then they will talk with CREC, the Chinese company undertaking the construction of the light rail transit in Addis Abeba.
Ethiopia targets $6 billion revenue from tourism sector in second GTP
Ministry of Culture and Tourism said that Ethiopia has targeted to earn six billion USD revenue from the tourism sector in its second Growth and Transformation Plan.
Public and International Relations director with the Ministry, Gezahegn Abate told WIC that the ministry plans to earn six billion USD revenue per year from the expected six million foreign visitors to the nation in the GTP II period.
The contribution of the tourism sector to the country’s GTP so far is about 1.2 percent, Gezahegn said, adding that it is now planned to raise its contribution to 5 percent.
According to Gezahegn the influx of foreign visitors to Ethiopia has shown an average growth of 10 percent in the past seven years, the average tourist staying period rose up to 16 days.
According to Gezahegn, the tourism sector has created 783,638 jobs for citizens in the last four years of the first GTP.
Standardization of 400 star ranked Hotels has begun in the nation to increase the service quality delivered for the foreign visitors, said Gezahegn, adding that International accredited standardization activities so far conducted on 50 hotels in Addis Ababa city.
After the downfall of the Dreg regime in 1991, Ethiopia has been attracting a huge number of foreign tourists visiting a variety of magnificent natural, cultural, historical and religious heritages found in the country.
Addis Ababa – Mieso Railway commences test ride
Part of the Ethio-Djibouti railway, the Addis-Sebeta-Mieso rail had been successfully laid over the past few weeks.
The Corporation’s Communication Services Head Dereje Tefera told fanabc.com that the commencement of the test will be attended by several high ranking officials.
The project is expected to be completed by October, boosting the country’s import-export fright moving capabilities.
Awash Melkasa to Begin Hydrogen Peroxide Production at 234m Birr Plant
Awash Melkasa Aluminum Sulphate & Sulfuric Acid S.C. will begin production of hydrogen peroxide, a major input in the textile industry, by the end of June, 2015 at a plant it established at a cost of 234 million Br.
The factory is located on 9,000sqm at Awash Melkasa, around 107Km from Addis Abeba. The state-owned company currently produces around 13,000tn of aluminum sulphate and 17,000tn of sulfuric acid annually, which are used in the production of leather, car batteries, cotton, and for water treatment.
In the 2013/14 fiscal year, the company generated revenue of around 80 million Br, which was followed with a plan for 100 million Br for 2014/15.
The company signed a turnkey contract with Nuberg Engineering Limited for the construction of the hydrogen peroxide manufacturing plant, which will have a production capacity of 4,500tn annually. The project is based on findings of a feasibility study conducted by Industrial Project Services, which is under the Privatization & Public Enterprises Supervising Agency (PPESA). Construction started in August 2013.
Nuberg Engineering Limited, established in 1996, is an Indian maker of manufacturing equipment for various chemical plants, according to its website.
Currently, Awash Melkasa’s plant is going through a pre-commissioning process, said Admassu Kabeto, the company’s CEO. On the first of June, it will start the commissioning process, which will take about one month, followed by the completion of the project, he added.
Awash Melkasa Alumunium Sulphate & Sulphuric Acid S.C factory, which produces sulphuric acid and alumunum sulphate, is located 107Km from Addis Abeba at Awash Melkasa.
The demand for hydrogen peroxide in Ethiopia can reach up to 900tn annually on average, according to the study by Industrial Project Service. In the 2014 fiscal year, around 678tn of hydrogen peroxide, worth 908,258 dollars, was imported into the country, according to the Ethiopian Revenues & Customs Authority.
Awassa Textile, which is owned by Dukem Textile Plc, uses imported hydrogen peroxide for bleaching cotton. The textile factory, established in 1989, had been under state ownership but in 2011, the ownership was transferred to Dukem Textile Plc at a cost of 37 million Br. The company uses 400Kg of hydrogen peroxide monthly at a cost of 7,600Br to produce four tonnes of textile on a daily basis, said Tariku Assefa, purchasing head of Awassa Textile S.C.
There are 130 medium and large scale textile factories in Ethiopia, of which 37 are owned by foreign investors. For the first Growth & Transformation Plan (GTP) period, the government has earned around 427 million dollars from the textile export trade, less than half the one billion dollars it had planned.
In addition to use in the textile industry, hydrogen peroxide can also be used in the production of pulp, paper, milk treatment and cosmetics.
In the international market hydrogen peroxide is sold for around 20 Br per kilogram. Admassu says their company will break into the market with a price of 14Br a kilogram.
Adama II wind farm inaugurated
The project, an extension of the Adama I wind farm, generating 51mw power, have 102 turbines each with an installed capacity of 1.5mw.
The government has planned and engaged in developing energy from renewable sources, including hydro, wind, solar and geothermal.
The Adama II project will raise the country’s power generating capacity from wind to 324mw combined with Adama I and the 120mw, 84-turbine wind farm in Ashegoda, which is Africa’s biggest.
The country plans to boost electricity generating capacity from 2,000mw to 10,000mw within the coming few years, much of it coming from the 6,000mw Renaissance Dam under construction on the Nile.
Experts put Ethiopia’s hydropower potential at around 45,000mw and geothermal at 5,000mw, while its wind power potential is believed to be Africa’s third-largest behind Egypt and Morocco.
Ethiopia expanding road link with neighboring countries
More than 750km roads are being undertaken to link the nation with neighboring countries.
The road projects will provide Ethiopia additional access to ports and increase trade ties with the countries, said Sisay Bekele, acting Director-General of the Ethiopian Roads Authority.
Some of the roads are part of the Trans-Africa Highway system, a continental initiative aimed at linking the continent with road.
The 499km Addis Ababa-Nirobi-Mombasa road is among them. This project is part of the 10,228km Cairo–Gaborone–(Pretoria/Cape Town) highway.
The road linking the country with South Sudan and Djibouti are also being underway, he said.
Construction of the ongoing roads will increase the total length of roads that connect the nation with neighboring countries to more than 2,000km
Yara applies for large-scale mining license
Yara Dallol BV, a subsidiary of Yara International, which has been prospecting for potash mineral deposit in the Dallol depression in the Afar Regional State, two weeks ago submitted its application for a large-scale mining license to the Ministry of Mines.
Yara has finalized its exploration project that costs USD 100 million. The company completed the definitive feasibility study and submitted it to the Ministry of Mines.
The company, which discovered a vast potash deposit in its concession in the Dallol depression, proposed to produce 0.6 million tons of potash annually by applying solution mining.
Tolossa Shagi, the Minister of Mines, told The Reporter that Yara presented the application for a large-scale potash mining license to the ministry two weeks ago. “We are evaluating the proposal. Once we finalize the evaluation we will grant them a large-scale mining license,” Tolossa said.
After finalizing the evaluation, the ministry will remand the draft mining license to the Council of Ministers for endorsement. Once endorsed by the council, the ministry and Yara will sign the mining agreement.
The board of directors of Yara has approved the project proposal. According to the company, the estimated capacity for the Dallol project is 1-1.5 million tons potash per year, with resources of more than 30 years’ mining. Yara hopes to supply ten percent of the current global potash market.
Yara plans to build a potash mine in the Dallol depression. It will also construct a potash fertilizer factory. The total cost of the project is estimated at USD one billion.
Yara started drilling activity at the site in 2010, and most drilling and drilling related activities were completed in 2012.
Yara International is an agricultural chemicals giant that has been supplying fertilizers to Ethiopia.
Yara, Circum Resources and Allana Potash are the three international mining companies engaged in potash exploration and development projects in the Dallol depression.
Though potash is not yet mined in Ethiopia, studies indicate that there are huge potash mineral deposits in the Dalol depression. Allan Potash has confirmed a proven reserve of 3.2 billion tons. The UK company, Circum Resources, last week announced that it proved a potash reserve of 4.2 billion tons. Potash is primarily used to produce fertilizer.
The Ethiopian government annually spends more than USD 150 million on fertilizer imports. If these projects come to fruition, the country could save a substantial amount of foreign currency. Potash export could also be a major foreign currency earner.
You have not just purchased a pair of shoes.
You have contributed towards the development of sustainable leather production in Ethiopia.
You have invested in improving the livelihoods of skilled Ethiopian factory workers.
You have helped to raise the profile of East African design.
You have added your voice to a growing chorus of people around the world who are ready to see Africa in a new light.
The shoes also happen to be really nice.
Enjoy them responsibly.
Founder, Sam Imende gives no further instructions on how to enjoy them responsibly, but one can imagine that it might have something to do with walking in someone else’s shoes or becoming more conscious of what you wear on your feet. Having “Made in Ethiopia” stamped on your sole might also be a good start. Long time friends Azariah Mengistu, Jawad Braye, Christian Ward and Imende (pictured above) spent their student days scattered around the world, returning to establish Enzi Footwear in their homeland Kenya. Their travels had exposed them to luxury leather goods and they couldn’t see any obstacles as to why East Africa couldn’t produce leather goods to a similar standard. The Enzi team are still in their 30s and are driven to change the perceptions the world has of their part of the world. “Most people don’t think of Ethiopia as having the highest quality leather in the world, “ says Imende. “They think of stereotypes established decades ago.”
“We saw a lot of potential, creativity and enterprise in the region,” he continues. “Jawad had studied footwear at the London School of Fashion and we decided to build a shoe brand that reflected the standards and quality we knew existed here.”
Africa is known as a resource rich region but much is exported and sold in to higher end markets without the source getting any recognition. Imende and his team set out to turn the spotlight back on Africa. Their neighbour, Ethiopia, seemed to offer the best manufacturing facilities with surprisingly good tanneries. The best thing about quality Ethiopian leather is how beautifully it ages and Enzi’s entry leather sneakers, starting at $125, are a serious fashion investment.
Imende easily found the talent and excellence in Ethiopia to get their venture off the ground; indispensable artisans such as seamstresses and pattern cutters; but underestimated the need for a production line manager, someone to constantly supervise the overall quality. If you’re selling shoes at a premium price into developed markets you need more than just a catchy “African tale.” Your products must be flawless.
One of Imende’s survival strategies has been to collaborate with established companies. A French-Canadian company based in Ethiopia shared information on labels and soles with him and a factory in London was open to forming an incubator-type relationship with Enzi. One of the biggest incentives has been from the government itself. A long-time exporter of high-grade raw leather to Japan and Italy, the Ethiopian government wanted to retain a higher margin at home and introduced a tax of up to 150% on raw exports, whereas the export of finished goods attracts a tax of 0%.
From the start Kenzi has run their business in a way that creates social impact. Going beyond fair pay, they pay factory workers a percentage of profits and strive to operate a completely transparent supply chain. Imende has a background in microfinance and has considered ways in which the company can evolve into a lending circle for the benefit of workers. A pop up shop they created in Nairobi saw 10% of proceeds going to school students who couldn’t afford their fees.
“It’s been trendy for a while now to be green and integrate social enterprise into your business,” muses Imende. “But we’ve found that these types of considerations actually go hand-in-hand with delivering a quality product. For us, this should be the norm.”
The tannery Enzi works with recycles a lot of their water, and highly toxic chemical by-products, such as chrome, are being effectively filtered to avoid poisoning local waterways. Luckily, fashion trends have also swung onto a more natural aesthetic and the more natural leather treatments they use have become the norm. The touch and feel of Enzi shoes hasn’t been lost on their customer’s either, who value the authenticity of leather that hasn’t been pickled to death.
Imende’s vision for a more sustainable business hasn’t been without its pitfalls. “Many factory managers can’t understand why there should be any incentive for workers at all,” he says. “They expect the goods to be made to a workers best ability regardless of whether they will be paid more or not.” The retail industry works on slim margins and by default has low paying jobs. Imende has seen some workers leave to become housemaids because it paid more. India and China have also established large production factories around the capital Addis Ababa, taking advantage of the aforementioned tax breaks, adding to an increasingly crowded market.
Yet, despite the challenges it’s sometimes not monetary incentives that work with employees. “It’s about creating a cooperative ownership scheme and finding ways to make staff feel valued,” says Imende. “For example, on each box we send out, we have an employee sign their name, “as made by…” and they take a lot of pride in that. It’s their handcraft that’s being exported to London and Hong Kong and sometimes a subtle thing like this can go a long way in fostering loyalty and pride.”
Richard Branson and brands such as Nike inspire Imende. “They both take a bit of risk and are very driven to build their brands,” he says. “The teams they work with are incredibly talented and I love the way they connect with consumers, particularly Nike’s relationship with athletes, skaters and musicians. You’ll occasionally see a campaign that looks completely off-brand, but they’re building a brand that really resonates with the market and pushes boundaries. They’re in touch with their end-user,” says Imende.
Perhaps Enzi might take their slogan “Made in Ethiopia” one step further by adding “Pride Inside” to each of the boxes that now ship to Paris, London, Hong Kong, Sydney and New York.
First Herbicide Factory to Begin Production with 27m Br Investment
Ethiopia will reduce herbicide imports when Ethio 24-D supplies a larger share of current demand
The factory, which cost 27 million Br for construction and machinery acqusition and installation, has been under construction in Butajira town, around 110Km from Addis Abeba on 3.4ht of land. Its operation is dependent on the Chinese company, Tianjin Bohai Chemical Industry Group Corporation, which will supply it with the chemicals and chemical processing recipe for the production of the herbicide called 2,4-D (2,4-Dichlorophenoxy acetic acid).
Adame Tulu agreed to buy the chemicals as well as machinery from this company alone in exchange for the process and will distribute the herbicide in Ethiopia with the brand name Ethio 24-D.
Tianjin has also provided Adame Tulu with the machinery, worth six million Birr. The two have signed a 10-year agreement.
Adame Tulu presently produces insecticide to prevent the spread of yellow fever at another plant it has in Ziway, obtaining the inputs it needs from the same Chinese company, which has been in the chemical industry since 1986.
The 24-D is used for weed control on various crops, including teff, sugar cane and wheat, said Simeneh Altaye, CEO of Adame Tulu Pesticide Processing S.C. The herbicide is effective in broadleaf weed control in the agricultural industry and is one of the most widely used herbicides in the world, according to Fikremariam Abebe, pesticide inspector at the Ministry of Agriculture. The product is available at a lower cost than other herbicides, at 80 Br a litre.
Adame Tulu, which has been being administered under the Privitization & Public Enterprises Service Agency (PPESA) since 1990, is the sole producer of various insecticide and fungicide chemicals in Ethiopia.
The new factory will have the capacity to produce 500,000lt of 2,4-D, reaching 1.5 million litres in two years.
Currently, in Ethiopia, around 200,000lt of 2,4-D are imported from abroad while the demand for the chemical is estimated to reach two million litres.
This is expected to increase as the quantity of land used for crop production increases, said Simeneh. In 2013/14 Meher season, the Post-harvest Crop Production Survey by the Central Statistical Agency indicated that a total land area of about 12.4 million hectares of land was covered by grain crops – cereals, pulses and oilseeds, slightly up from 12.3 million hectares the previous year.
Transporters to import 500 buses with 70 percent bank loan
Transporters to import 500 buses with 70 percent bank loan. In a bid to curb the longstanding transport woes in Addis Ababa, the government pledges to provide financial requirements for private commuters to enable them to import 500 buses for public transport.
Kassahun Hailemariam, the Director General of Federal Transport Authority (FTA), said at a press conference on Thursday that the government has reached a decision to help transport associations to solicit 70 percent of bank loans so that they can import buses once they form share companies.
They will then set up a committee that will facilitate the import of modern buses.
The director also indicated that the decision is aimed at easing the longstanding transport shortage in the capital and will pave a new way to introduce a modern transportation service.
He also noted that the introduction of the new buses would not affect the existing taxi service, which employs thousands of taxi drivers and co-drivers.
Kassahun explained that apart from the infrastructure, the government also strives to facilitate the loan service for the association.
He further indicated that the government will also provide tax-free incentives for when the vehicles are imported and will provide spaces for parking as well.
According to the authorities, some fifteen taxi associations, three Higer Bus associations and Alliance Transport Service have been identified as the first to take the latest advantage and import the first 500 buses in six months, in keeping with the proper procedure set by the government.
Yabibal Addis, Head of Addis Ababa City Transport Bureau, indicated that for the 2.3 million daily commuters in the city, the introduction of the new buses would contribute its share of easing the sour transport burden that affects the social and economic activities of the capital.
According to him, 800 city buses and 8,000 taxis are currently in service across Addis Ababa’s roads. He expressed his belief that the new buses will never affect the existing taxis and buses.
Arjo Didesa Sugar factory inaugurated
Federal and regional higher officials, along with factory workers were present at the inauguration ceremony.
The factory had recently started production on trial basis. During the first stage of factory’s construction, it will produce 8,000 quintals of sugar per day. When fully operational, the factory will have a daily output of 12,000 quintals.
The sugar development project was transferred from a Pakistani company to the government, according to Sugar Corporation.