1 March 2016 Business News Briefs


Leading German food processing, packaging companies seeking partnership in Ethiopia


Leading German food processing, packaging companies seeking partnership in EthiopiaAddis Ababa, February 29/2016  – 
Some 14 representatives of international leading German food processing and packaging companies have expressed interest to do business in Ethiopia.

Speaking on behalf of the German delegates today, Managing Director of VDMA Food Processing and Packing Machinery Association Richard Clemens said Ethiopia is one of the most important markets in Sub-Saharan Africa.

At the opening of a symposium where the companies are displaying and discussing their products, the managing director stated that the German manufacturers of food processing and packing machinery will present their expertise and experience in the sector.

He added that the visits and meetings with local entrepreneurs will help the representatives to better understand the local market and their potential, the investment climate, the current demand for technology as well as the requirements for training and qualifications.

State Minister of Industry Mebrahtu Melese said on his part the foodstuff processing and packing industry is taken as a key element in the Growth and Transformation Plan, and the ministry encourages investment in modern foodstuff processing as well as packing industry.

“I would like to assure you that you have chosen to come at the right time to present, discuss and invest in Ethiopia,” the state minister reiterated.

Mebrahtu stated that the government has given special attention to agro-processing sector to enhance both quality and quantity of produce through value addition in GTP-2.

The government provides necessary support for investors, he said, adding that four national integrated agro-industry parks are being built at a cost of 30 billion birr and would become operational in September, 2016.



Ethiopian firm to execute first overseas project

Ethiopian firm to execute first overseas projectAddis Ababa, February 27, 2016  – 
A local firm, the Ethiopian Construction Works Corporation, has taken its first overseas project as it concluded agreement to execute irrigation infrastructure in Rwanda.

The corporation is confident that its first overseas engagement will create further knowledge and capacity for similar projects to be executed locally over the coming five years.

The corporation today organized a farewell ceremony for project supervisors of the 3.6 billion Rwandan Frank project.

Hailemeskel Tefera, Chief Executive Officer (CEO) of the Ethiopian Construction Works Corporation on the occasion revealed government’s five-year plan to shore up domestic capacity in handling huge construction projects.

The merger of the former Ethiopian Road Construction Corporation and the Ethiopian Water Works Enterprise is part of the government plan to raise local capability in construction, he said.

Besides the company’s wide mission, the proper accomplishment of the Rwanda project is a national mission, the CEO said.

According to Agonafir Zewde, Head of the Rwanda Project, the overseas project is vital in getting essential experiences to carry out similar projects at continent level.

The head promised to make an all-out effort for the success of the project.



Moroccan fertilizer company eyes $500mln investment in Ethiopia


Moroccan fertilizer company eyes $500mln investment in EthiopiaAddis Ababa, February 27, 2016  –
The Morocco-based OCP Group, which specializes in fertilizer manufacturing, is conducting talks with Ethiopian authorities to set up a manufacturing plant in Ethiopia at a cost of half a billion dollars.

OCB Group is considering Ethiopia as an option in Africa taking into account the country’s gas resource and potential, Tarik Choho, chairman of OCP Group, told The Reporter during an event held in Marrakesh, Morocco from February 25-26.

According to him, OCP has been conducting feasibility studies and had identified which types of fertilizers it plans to manufacture in Ethiopia depending on the soil type.

Hence, the company will erect a urea and potash processing factory and if things turn out as expected, the plant will require some 530 million dollars, Choho said.

A similar plant has been recently built and inaugurated in Morocco with the same amount of money, he said.

The recent gas pipelines Ethiopia is planning to construct has paved the way for OCP Group to consider setting up a plant in the country.

In addition to that, Ethiopia is preparing to mine and export potash, which the fertilizer manufacturer said is another advantage.

The plant, which will be erected in Ethiopia, will be manufacturing fertilizer from Nitrogen, Potassium and Phosphorus.

The chairman said that discussions are well under way but pacing the time is what he needs to see from the Ethiopian side.

Currently, a task force is to be set up to look into the prospects of how the fertilizer business can be implemented in Ethiopia.

According to OCP Group, Ethiopia is the largest single buyer of fertilizer from the group as well as the largest consumer in Africa next to South Africa and Nigeria.

As a major buyer, Ethiopia stands top in Africa for OCP, Imane Belrhiti, vice president of sales for Africa at OCP Group said.



Ethiopia set to host 2016 Pan-African Executives Summit


Ethiopia set to host 2016 Pan-African Executives SummitAddis Ababa, February 25, 2016  – 
Business leaders from 35 countries across Africa and the globe are set to gather in Addis Ababa, Ethiopia, for the 2016 Pan-African “Executive” Summit, one of Africa’s most ‘unique and high impact conference’.

Out of the 110 plus guests, 90% are Executives and experienced investors Africa who are expanding partnerships, co-investors and with investments including in Ethiopia, according to the organizers of the summit that will take place at the Sheraton Addis Hotel from March 15-16, 2016.

The summit is known for its unique track record of delivering tangible results with more advanced, effective, direct executive and investor engagement, » said Lisa Lambie – Managing Partner, Satatt Holdings and President of the summit.

The key business areas of the 2016 includes, Power & Renewable Energy; Agribusiness, Husbandry & Aquaculture; Real Estate & Hospitality; Consumer Goods & Manufacturing; Healthcare; Education; Tourism; Technology, Impact Investing & Entrepreneurship, the organizers said.

Participants from the Middle East Investment Partners from Saudi Arabia, Yemen, Lebanon, Oman, Qatar, Kuwait, UAE and Turkey, among others are set for the summit, according to the organizers.

The two days summit includes events such as Ethiopia Investment Segments for Investors and Executives including Investor Deal Forum.

The summit deals with investment capital segments most relevant to Ethiopia and Africa’s evolving investment landscape in 2016. These include Family Office & Direct Investing, Angel Investing & Venture Capital, Private Equity, Mezzanine, Pension & Sovereign Wealth Funds, the organizers said.



Engine manufacturing plant to begin trial production


Engine manufacturing plant to begin trial productionAddis Ababa, February 25, 2016  –
The construction of an engine manufacturing plant, which is the first in its kind in Ethiopia, has been finalized, according to the Metals and Engineering Corporation (METEC).

The plant has the capacity to produce up to 30, 000 engines per annum for water pumps, vehicles and machinery, Major Asefa Yohannes, general manger of the Ethiopian Power Engineering Industry said.

Through process the plant will manufacture tank and jet engines, he said.

In addition to accelerating Ethiopia’s industrialization development objective, the engine plant will serve as a center of excellence for other engineering factories existed in the country, he said.

The engine plant, erected in Mekele town, Tigray regional state, is expected to begin trial production within a few weeks.

Upon going operational, it is expected to create jobs for 1, 500 people.



Ministry set to create 4.7 mln jobs


Ministry set to create 4.7 mln jobsAddis Ababa, February 24, 2016  –
The Ministry of Farming and Natural Resource plans to create jobs for 4.7 million women and youth living in rural areas over the coming five years.

The Ministry announced the plan here today at a job creation workshop it organized in partnership with international institutions and stakeholders.

More than 1.5 million jobs will be created this budget year alone, it said.

According to the Ministry, it created jobs for 936,000 women and youth last fiscal year.

The jobs were created mainly in the areas of crop, vegetables and fruit developments as well as apiculture sectors.

According to Tefera Deribew, Minister of Farming and Natural Resource, some of the youth are transferring to agro-processing level.



Maersk Oil acquires 50% of Africa Oil’s share in Ethiopia


Maersk Oil acquires 50% of Africa Oil’s share in EthiopiaAddis Ababa, February 24, 2016  –
Maersk Oil completed the acquisition of 50% of Africa Oil Corporation’s share in two contiguous licenses in southern Ethiopia and three onshore exploration licenses in the Turkana region of northern Kenya.

According to the company, the transaction was recently approved by the Ethiopian and Kenyan governments.

The licenses cover about 100,000 sq km and include nine recent oil discoveries. Exploration and appraisal activities are ongoing.

Tullow Oil operates four of the blocks, while Africa Oil operates one.



 Ethio-telecom reduces internet tariff


Ethio-telecom reduces internet tariffAddis Ababa, February 23, 2016  –
Ethio-telecom has reduced the tariff on internet services as of today.

The tariff reduction was made on 2G, 3G and 4G mobile internet services.

Hence, the tariff for 4G mobile internet has been reduced to 35 cents per megabyte from the previous 55 cents, showing a 35 percent reduction.

Moreover, with a 24 percent decrease, the cost for 3G and 2G mobile internet service has been reduced to 35 cents per megabyte from the previous 46 cents,  it said.

The tariff for all 2G, 3G and 4G mobile internet services has been reduced to 35 cents per megabyte.

A reduction was also made on the cost of 3G and 4G sim cards, it said.



Atlas breaks ground on Ethiopia bottling plant


Atlas breaks ground on Ethiopia bottling plantAddis Ababa, February 22, 2016  –
Atlas (AIM, NSE: ADSS), has commenced ground clearing at its ‘Chancho Project’ in Ethiopia, a new state-of-the-art facility 45km north of the capital, Addis Ababa, which will have capacity to produce 105 million 330ml bottles per annum.

To commemorate this landmark development, an official ground breaking ceremony was held on 15 February 2016 and attended by local dignitaries and members of the Board.

Levelling of the 5.5 acre Chancho Project site has begun and the top soil has been stripped. The work is being conducted through the Company’s newly formed industrial division, which is focused on consumer based industrial projects in Africa, in conjunction with the Company’s joint venture company, Orchid Group (‘Orchid’).

The Chancho Project site is located in an established industrial area that is serviced by excellent road infrastructure as well as power. It is also within trucking distance of the intended mine sites for the materials needed to produce high quality bottles, being silica sand, limestone, dolomite, feldspar and soda ash. Preliminary assessments of potential sources and studies of local mining operations carried out confirm appropriate grades of silica sand and limestone are available in deposits 30km away from the site.

An initial pre-feasibility study has been completed at the Chancho Project, which has returned highly positive results. A full feasibility study is now being conducted in tandem with local and international engineering consultants, which is close to completion. Commissioning of the facility has been scheduled for 2018, with full production targeted for early 2019.

Chief Executive of Atlas, Carl Esprey said, “We are delighted to have broken ground at the Chancho Project, our state-of-the-art glass manufacturing facility neighbouring Addis Ababa. The Project has been an excellent acquisition for us, giving us a foothold in the burgeoning Ethiopian consumer market and positioning us at the forefront of advancements in the East African manufacturing sector. We are delighted with the progress that has been made so far and the ground breaking ceremony marks another momentous step in our transition into exciting new territory. We can now look forward to commencing development of the project site over the coming year and updating the market on our progress in due course.”

Market Opportunity

For the last five years, due to increasing consumer demand and a young demographic, Ethiopia has been attracting significant investment from international beverage companies, with over $500 million invested to date. Beer production has been growing at a CAGR of 14.3% over the last 14 years with an additional 47% capacity currently under construction. The demand for glass bottles is largely unmet by local production and is at present mainly satisfied by expensive imports. There is strong demand for locally produced glass bottles in Ethiopia which Atlas aims to meet, through the development of the Chancho Project.

The Ethiopian government has designated manufacturing as a top priority, and support via development debt funding is, in principle, available for projects that substitute imports. Ethiopia represents one of the fastest growing economies in the world, as a result of rising income, population growth, well managed infrastructure spending, and stable government policies.


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