Having reached a strategic partnership in Washington on February 4 two global companies – GeoPoll and Control Union – have announced that they are seeking partners in here after having already launched mobile surveying and agricultural certification, The Reporter learnt.

Roxana Elliot, communications head at GeoPoll responded to The Reporter via email that Control Union has been operating in Ethiopia for almost ten years, and GeoPoll and Control Union are now developing practical strategies to learn what Ethiopia’s smallholder farmers need to better produce and benefit from the products consumers love, especially its coffee. “We are currently seeking partners in Ethiopia who can utilize this program to connect smallholder farmers,” Elliot said.

Ethiopia is one of the six African countries that is set to implement the project for its world-known coffee and other agricultural products. Kenya, Uganda, Ghana, Tanzania and Nigeria are the five countries included in the program while Indonesia and Philippines made the way through the Asian continent for their rice, tea and palm oil. According to Elliot, partnering allows Control Union to tap into GeoPoll’s multi-modal mobile platform and database of 200 million users, giving them access fastest and most cost effective data collection method available in emerging markets.

Together, GeoPoll and Control Union will utilize mobile survey to engage and utilize and educate smallholder farmers in emerging economies, with the goal of reaching 1million farmers by 2020 via SMS and voice messaging. With consumers demanding increased transparency, target value chains include coffee, cocoa, cotton, palm oil, rice, tea, tobacco, and fresh fruits and vegetables.

Colin Coleman, managing director, Goldman Sachs South Africa told The Reporter that emerging African markets have been enormously viewed by many global companies across the world, and the infrastructure in Africa has to be made up to standard in order to win their interest.

The panelist, in the Emerging Africa Summit 2015, held in Addis Ababa last week also pointed out that Ethiopia’s determination in unleashing its potential of boosting economy should be led with consistent infrastructure development including the telecom industry. GeoPoll is a mobile surveying platform with a database of nearly 200 million users in emerging markets. It connects researchers, businesses and aid organizations directly to mobile phone users in just about every country in the world.

 [TheReporterEthiopia]

Chinese workers mingle with Ethiopians putting the finishing touches to a metro line that cuts through Addis Ababa, one of a series of grand state infrastructure projects that Ethiopia hopes will help it mimic Asia’s industrial rise.

Brought to its knees by “Red Terror” communist purges in the 1970s and famine in the 1980s, Ethiopia has been transformed in the last quarter century, becoming one of Africa’s fastest-growing economies.

At the heart of the state’s “Growth and Transformation Plan” are railway, road and dam projects to give the landlocked nation cheap power and reliable transport, as well as the metro line – the first urban light railway network in Sub-Saharan Africa.

“This is the future,” said Abate Yaye, 27, from the poor south as he helped complete the $475 million system being built by China Railway Engineering Corp, much of it on concrete stilts to keep it above the crowded streets of an expanding capital.

“We will become an example for the whole of Africa.”

Hefty state-led investment has kept the economy of Africa’s second most populous nation growing at more than 8 percent a year for over a decade, but economists say Ethiopia’s rulers need to relax their grip and give room for more private enterprise to maintain momentum.

Foreigners cannot invest in banking and telecoms and foreign retailers are barred, while Ethiopian banks are directed to buy low-yielding government development bonds.

“This is a country where, relative to rest of Africa, there is pretty good state capacity and a commitment to a development mission,” said S. Kal Wajid, the outgoing Ethiopia mission chief for the International Monetary Fund.

But he said private business needed room to grow and generate income so the economy could reap greater benefit from the new projects. “Where you are making a lot of infrastructure investment, there is a risk that the pay-off may not be as big as you thought,” he added.

DEBT LIMITS

Others in Africa have looked with envy at Asia’s inexorable rise but few governments, if any, have proven as single-minded as Ethiopia has in mobilizing its resources in a bid to turn an agrarian nation of 96 million people into a manufacturing hub.

Yet it comes at a cost. The IMF said last year Ethiopia was “on the cusp” of shifting from low to moderate risk of debt distress. Total debt at about 50 percent of gross domestic product was still manageable, but tougher if it rises much more.

“In the next five-year plan, there should be a clear indication of a change of emphasis and a significant emphasis on the private sector,” said Wajid, referring to the next Growth and Transformation Plan starting in July.

The government insists it will not rack up unsustainable debts because funds are used to finance infrastructure and other projects such as sugar factories and industrial zones.

Investors also say Ethiopia benefits from better security than others in a region blighted by Islamist militant attacks. And few executives cite corruption as a big hindrance in business, although it can be elsewhere in Africa.

But Ethiopia is no model for political and media freedom – there is just one opposition party member in the 547-seat parliament and international rights groups say the authorities muzzle critics. The government insists politics is open to all and that it allows free speech.

The current five-year growth program ends in June and the government has given little away about the next plan. But it remains clear about its economic goals.

“Without investing in infrastructure, it is now abundantly clear that Africa cannot sustain growth,” Finance Minister Sufian Ahmed told Reuters in December.

Sufian’s deputy Abraham Tekeste said this month the new plan would likely continue “most of the priorities” of the last one.

The government can point to a list of investors suggesting its formula works. Clothes retailer Hennes and Mauritz is starting to source supplies from Ethiopia, consumer goods maker Unilever is building a factory, Diageo and Heineken have bought breweries.

U.S. private equity giant KKR invested in a flower farm last year while an Ethiopian winery is among the investments of 8 Miles, an African-focused fund chaired by singer Bob Geldof who launched Live Aid to help Ethiopian famine victims.

LIMITED ROOM

The government’s ban on foreign retailers is aimed at encouraging local manufacturing, to cut back on imports, not wanting a consumer culture that could drain foreign exchange.

Central bank foreign reserves barely cover two months of imports – an inadequate level, according to the IMF. Other east African states have at least four months.

The government says it wants to keep banks in the hands of Ethiopians and telecoms controlled by the state as the sectors provide funding for national projects such as infrastructure. Earnings from the state telecoms monopoly are helping fund a railway linking Addis Ababa to a port in Djibouti, for instance.

But that leaves few domestic funds available in the market for businesses that could create jobs in future.

“If they are looking at achieving their goal of being a middle-income country and getting employment, you must enable access to financial options,” said James Kanagwa of pan-African lender Ecobank, one of half a dozen foreign banks with representative offices in Addis Ababa but barred from commercial work.

Ethiopia, with average annual per capita income of $470, aims to reach middle-income status by 2025, which the World Bank says starts at $1,046.

For now, even Ethiopian banks have limited room for maneuver. They must invest the equivalent of 27 percent of their loan portfolio in the development bonds, hindering their ability to lend to the private sector.

“The lending capacity of banks is growing very slowly,” said Mulugeta Asmare, president of Bank of Abyssinia, one of 16 private banks in a sector dominated by state-owned Commercial Bank of Ethiopia.

Banks must rely on equity and deposits for funding, in a nation where only one in 10 people have a bank account, because there is no developed capital market.

After launching a debut $1 billion Eurobond in December, Prime Minister Hailemariam Desalegn said tapping international markets did not herald “liberalizing the financial sector”.

“If you have an efficient effective state development model, great,” Colin Coleman, managing director for Goldman Sachs based in South Africa, told a conference in Addis Ababa last month.

“But you must allow businesses to develop in order to get the dynamism in the economy.”

[Reuters]

[Image Source: www.reuters.com]

The Ministry of Mines is going to grant a large-scale gold mining license to Ascom Mining, an international mining firm engaged in primary gold exploration project in the Benishangul Gumuz Regional State in south-west Ethiopia.

ASCOM is a multinational mining company involved in prospecting for gold in Benishangul Gumuz Regional State, Assosa Zone, Sherkole Wereda, Shungu and Nazali localities since 2009.

The firm made a discovery of a large amount of primary gold in the license area covering 268.17 sq.m. of land in a mountain commonly known as Dish Mountain. It was in March 2014 that ASCOM’s experts made presentation about the gold discovery to officials of the Ministry of Mines in Addis Ababa. The gold deposit is projected to be more than 70 tons.

The Minister of Mines, Tolossa Shagi Moti, told The Reporter that experts of Ascom presented progress report to the ministry twice. “We have informed them to expedite work on the feasibility study,” Tolossa said. According to the minister, once the company finalizes the feasibility study the ministry will review the study and grant the large-scale mining license to the company.

“They have confirmed the presence of the resource. They are now working on the final feasibility study. Once they have submitted the final study we shall grant them the mining license,” the minister told The Reporter.

It was on November 20, 2008 that ASCOM secured a gold and base metals exploration license after Ariab Gold Mining Plc, Sudanese and Ethiopian JV Company, transferred it to the former.

Shareholders of ASCOM Mining Ethiopia Plc are ASCOM Precious Metals BVI, holding 96 percent of the company, and Ariab Gold Mining Plc, owning the rest, 4 percent. Shareholders have different nationalities and are from Sudan, Egypt, the Middle East and other North African countries. In addition to the Benshangul Gumuz site, ASCOM has another exploration license in Ethiopia, in the Gambella Regional State.

Thus far the only company engaged in a large-scale gold mining in Ethiopia is MIDROC Gold. Nonetheless, two years ago in 2012 another firm, Ezana Mining Plc, secured a large-scale gold mining license from the Ministry of Mines.

[TheReporterEthiopia]

The first Ethio-Swedish Agro Technology Forum for the dairy, sugar and energy sectors was held at Sheraton Addis yesterday with the presence of Ethiopia’s State Minister of Industry, Dr Mebrahtu Meles and Ambassador of Sweden to Ethiopia Jan Sadek.

The Forum was organized by the Ethiopian Embassy in Stockholm and The Ministry of Foreign Affairs of Ethiopia in Addis Ababa, in collaboration with Valley International Projects (VIP), founded by Swedish businessman Carl Gustafsson and his Ethiopian partner Akal Mamo.

The Swedish business delegation consisted of companies TetraPak, AlfaLaval and DeLaval. Ethiopian stakeholders of diary, sugar and energy sectors and the Swedish business delegates made their respective presentations, followed by business-to-business meetings in the afternoon.

The forum was attended by about 50 people engaged in the sectors.”

[FBC]

The Boston Partners Plc, the Ethiopian company known for building Kuriftu Resorts, is going to construct a resort in Moucha Island, a small island off the coast of Djibouti with a bid to expand the establishment of Kuriftu resorts to East Africa.

Ethiopia’s Prime Minister HaileMariam Desalegn and Djiboutian President Ismail Omar Guelleh were present during the inauguration of the construction of the resort.

The resort, which is an extension of the Kuriftu Resort and Spa, will consume 7 million USD, according to the owner Tadiwos Getachew Belete.

Upon completion after a year, the resort will have 30 presidential suites, two villas and 120 rooms.

This island will help to provide full service for tourists who want to visit Ethiopia and Djibouti by combining natural, historic and cultural heritages of Ethiopia with a “blue sea, white sand and sea food” in Djibouti, he said.

This is the first resort outside Ethiopia for Boston Partners that has six resorts in various parts of the country including in Addis Ababa, Debre Zeit, Bahir Dar, Burayu, Adama and Ziway.

Boston Partners plans to enter into the hospitality industry of every African country and expand the establishment of Kuriftu resorts to East Africa, he added.

It had concluded a 50 million USD agreement with a US-based company, Fairfax Africa Fund, back in August 2012 to pursue this goal.

The agreement was said to help Boston Partners achieve its plan to build, own and operate several hotels and resorts in East Africa including Ethiopia, Kenya, Tanzania and Djibouti.

[ENA]

Ethiopia is in negotiations to finalize a deal with a Chinese firm Dongfang Electric Corporation to construct a 120 Mega Watts (MW) wind farm in place called Ayisha near the Djibouti Border.

Miskir Negash, External Communications Director at Ethiopian Electric Power (EEP), told newBusinessEthiopia.com that with the country embarking on a green economy strategy, wind power is one key component.

“while our main focus in on hydro electricity generation, we’re also seeing other options prominent among them being wind, and as such we’ve inaugurated so far 171 MW of wind energy” stated Negash adding that Ayisha project is estimated to have a current power generation capacity of 300MW.

Ethiopia has so far managed to commission two wind power projects built by French and Chinese firms respectively in the northern and central part of the country.

The first project to be commissioned the 51 MW Adama I wind power project, 95 kms south east of Ethiopia’s capital Addis Ababa, constructed jointly by Hydro China and CGOC at a cost of $117 million and completed in 2012.

85 percent of the project’s funding was from the China Export Import Bank while the rest 15 percent was solicited from local sources.

The two companies have subsequently started construction on 153 MW Adama II wind power project, with according to Negash the project 82 percent complete and set to be finished this year.

The wind farm has a budget of USD 345 million and has reached 82 percent completion rate. 85 percent of the total cost is covered by the Chinese Exim Bank, while the Ethiopian government pays for the rest.

The second project to be commissioned the 120 MW Ashegoda wind farm located in Northern part of the country was inaugurated in October 2013.

The Project costing $ 289.7 million was built by French firm Vergnet SA with concessional loans from BNP Paribas and the French Development Agency (AFD). The Ethiopian government covered 9 percent of the cost.

Germans showing interest

Negash who refused to put an exact figure on the project said funding for the project is being looked in local and international financial sources, although the Ethiopian government estimates the total 300 MW project will need $ 536.6 million1.

He also stated that power generation ranging from 120-300 MW in total is under discussion with a German firm Laphto Technology Private Limited Company (PLC), potentially breaking the mold with projects that are increasingly being dominated by Chinese firms. The Ethiopian government has aims for the Aysha wind farm project to eventually be able to generate up to 1,000 MW of wind energy eventually.

“Ethiopia is embarking on a second phase of its five year Growth and Transformation Plan (GTP) starting from late 2015, and the Aysha project, will be part of the plan” Negash stated before surmising that there are other projects in the pipeline like the 100 MW Assela wind farm project.

The GTP a brainchild of the late Ethiopian Prime Minister Meles Zenawi launched in 2010 envisages Ethiopia achieving power generation capacity of 10,000 MW or more at utmost five years’ time from the current 2,200 MW.

The majority will come from Hydro energy, followed by wind power, Geothermal, with small contribution from waste energy and co-generation.

The Country also hopes for the renewable energy projects, to being a much needed hard currency by way of power exports to neighboring and regional countries.

Ethiopia so far has started limited power exports to Djibouti and Sudan of 60 and 100 MW each. It has also signed power export deal with Kenya to export electricity reaching 400 MW by 2016, as well as signed a Memorandum of Understanding with South Sudan.

The country which has invested heavily in renewable projects as part of its green economy strategy hopes to partially achieve its 2025 goal of net zero carbon emission, with investments in clean, renewable energy like wind, hydro and geothermal.

[NewBusinessEthiopia]

Ethiopia’s Ambassador to the United States, Ambassador Girma Birru, has welcomed the decision of the US Department of Commerce to organize a “Business Development Conference and Trade Mission” to 8 African countries in September 2015″.

According to the Ministry of Foreign Affairs, he said the Trade Mission would offer a unique opportunity to explore, first-hand, the vast business and investment opportunities that exist in Africa in the various areas.

Ambassador Girma noted the recent economic performance of the East African region has been remarkable by international standards. The region is one of the fastest growing regions in the continent, with average GDP growth of 5 per cent in 2013-2014, compared to the sluggish global economic performance of 2.4 per cent during the same period and cited Ethiopia as the third growing success economy in the world.

Ambassador Girma was speaking at “Doing Business in East Africa,” an occasion organized by the Embassies of Ethiopia, Kenya and Tanzania in collaboration with the US Commerce Department, as an opportunity to exchange information and network with US trade officials and members of the African diplomatic community.

Ambassador Girma also referred to the importance of the African Growth and Opportunity Act (AGOA) which he said has served as the cornerstone of U.S.- Africa commercial relations. AGOA is due to expire at the end of September, 2015 and it is important that it is reauthorized by Congress.

African governments and the private sector are concerned about the delay in reauthorization of AGOA which could result in unnecessary disruptions in commercial transactions.

He called for action to ensure uninterrupted continuation of AGOA and said “I would like to take this opportunity to express our continued commitment to collaborate with the U.S. Government and the private sector to make the September Trade Mission to Africa a success, thereby contributing to the strengthening of our economic ties.”

The occasion was attended by the Ambassadors of Kenya and Tanzania to the US, the Deputy Assistant Secretary of Commerce for US Operations and the Deputy Assistant Secretary of Commerce for Europe, the Middle East and Africa as well as the Chairman of the Virginia-Washington DC, District Export Council, and representatives of the Corporate Council on Africa and businesses.

[TheEthiopianHerald]

African heads of state and government passed a resolution on the establishment of a single air transport market in Africa by 2017 at the 24th Ordinary Session of the African Union held in Addis Ababa from January 30 to 31 at the headquarters of the union.

In 1999 African ministers responsible for civil aviation gathered in the Ivorian city of Yamoussoukro and adopted the Yamousoukro Declaration (YD) that calls for the liberalization of African skies for African airlines. The declaration is aimed at establishing a single African air transport market by avoiding market restrictions imposed by bilateral air service agreements.  The decision was adopted by African heads of states in 2000 with a two-year grace period. However, to-date African states have not been able to fully implement the declaration.

African skies are not open to African airlines. The African air transport market is still restricted by protectionist bilateral air service agreements. This has enabled non-African carriers to dominate African skies. Currently, non-African carriers carry 80 percent of the passenger traffic on the intra-African routes.

The African Airlines Association (AFRAA) has been working with the African Union and the African Civil Aviation Commission on market liberalization. Ethiopian Airlines has also been closely working with AFRAA on the possibility that African states could fully implement the YD.

On January 30, the AU passed a decision on the immediate implementation of the YD and the creation of a single African market by 2017. The resolution expressed “commitment to the immediate implementation of the Yamoussoukro Decision towards the establishment of a single African air transport market and open our air transport market to each other;” It also entrusted “the AU Commission to coordinate and facilitate the process of operationalization of the Single Air Transport Market in Africa; and to report to the Conference of Ministers of Transport.”

The governments of Benin, Cape Verde, Congo Republic, Côte d’Ivoire, Egypt, Ethiopia, Kenya, Nigeria, Rwanda, South Africa and Zimbabwe have committed themselves to the immediate implementation of the YD to the establishment of a single African Air Transport market by 2017. According to the AU, these countries will constitute as a working group at ministerial level in order to achieve this goal and it will remain open to those that will join later.

The implementation of the YD has been a very controversial issue. While some countries like Ethiopia, Kenya and South Africa who have strong national carriers have been strongly advocating the importance of the YD, others with weak airlines expressed their fear that their airlines will be crushed by the strong African carriers. However, the sad truth is that these small African carriers are being swallowed by mega non-African carriers, especially those that are coming from the Middle East.

At AFRAA’s 46th annual general assembly held last November in Algiers, Algeria, the Ethiopian Airlines Group CEO Tewolde Gebremariam said African states have been very slow in implementing the YD. “African states often speak of African economies integration but ironically most African states deny traffic rights to African airlines and grant it to non-African carriers, mostly to Gulf carriers,” Tewolde said. “This has to change,” he added.

“Africa must become one single unified market without any restriction for African airlines. The continued fragmentation of our skies is only benefiting foreign carriers and will lead to our certain demise. African governments must act now and fast to unify African skies, which would also give great impetus to the continent’s economic integration,” Tewolde added.

A recent study commissioned by IATA lists the benefits African states could reap by liberating their air transport market. The study was conducted by an independent consulting firm,  InterVISTAS, on 12 countries. The study indicates that the 12 countries could generate additional 1.3 billion dollars to their GDP and create extra 155,000 jobs by liberalizing their markets. The study indicates that Ethiopia could open additional 14,800 jobs and generate extra 59.8 million dollars GDP.

[TheReporterEthiopia]

Mondelez International Inc., the maker of Oreo cookies and Ritz crackers, is seeking to boost African coffee output 50 percent by mid-2017 as part of a $200 million global program aimed at farmers of the bean.

The project, called Coffee Made Happy, began this month in Africa with assistance for 24,000 Ethiopian small-holder farms, the company said on Wednesday. Deerfield, Illinois-based Mondelez’s initiative gives training in agronomy, financial literacy and promoting coffee farming to youth and women, he said. It plans to reach a million farmers worldwide over the next five years.

“What we want to do is move away from just certification and paying premiums for certified crop,” Roland Weening, president for coffee at Mondelez Europe, said in an interview in Nairobi on Feb. 12. “We want to make sure that coffee farming is a profitable business and that farmers and farming communities thrive and develop.”

Mondelez, which says it’s the world’s second-biggest coffee company by sales, buys the bean from African nations including Ethiopia, Tanzania, Rwanda, Burundi and Kenya, according to Weening. The continent has at least 21 coffee-producing countries, accounting for 11 percent of 2014 global output, according to data from the International Coffee Organization.

Outside Africa, Mondelez began similar initiatives in 2012, according to the project’s website. It currently covers Vietnam, Peru, Indonesia and Honduras, while the addition of Ethiopia increases the tally of farmers supported to 300,000, Weening said.

Extending Program

The program will be extended to other East African nations which haven’t yet been identified, he said.

“There is great quality coffee in Africa and we see the productivity levels in Africa are relatively low so there is a great opportunity to improve the business,” Weening said.

Mondelez, which sells about 80 percent of its products outside North America, is boosting output abroad as the stronger dollar increases domestic costs and lowers the value of international revenue.

The company buys about 5 percent of all the coffee produced globally, Weening said.

[Bloomberg]

Tetra Pak, one of the world’s biggest foods packaging company, is looking for investment opportunities in Africa. Ethiopia is on the list of countries the company is keen on exploring for a possible venture.

The company will send a high level delegation to assess opportunities the coming May 2015, Capital learnt.

Tetra Pak made its ambition known during the first Ethio-Swedish Agro Technology Forum of the dairy, sugar and energy sectors that was held at the Sheraton Addis Hotel on Tuesday, February 10. The event brought together major actors in the agro processing, dairy and energy sectors such as Tetra Pak, De Laval, Alfa Laval and Valley International Projects (VIP).

The Swedish company currently has two production facilities in Africa, South Africa and Kenya. “The government is ready to support industries that are linked to the agricultural sector. The raw commodities that we are currently exporting are expected to go through a transition to become processed and value added so that they can be linked to the global value chain,” stated Dr. Mebrahtu Melese, State Minister of Industry when addressing participants of the Ethio-Swedish forum.

He also stated that companies such as Tetra Pak should really consider investing in the country to take advantage of the opportunity in the market as well as to enable the agro-processing sector export value- added products.

Swedish Ambassador to Ethiopia Jan Sadek said farming, food production and food packaging have been one of the most important pillars for Sweden’s economic development. He also said that innovation, invention and research within agro-techniques, in particular by companies such as Alfa Laval, De Laval and Tetra Pak, were instrumental in developing Sweden’s agro business and related services.

“I believe that agriculture and dairy here in Ethiopia, as it was the case in Sweden, have a potential for the domestic economy, livelihood, biological diversity, energy production and more. We know that these areas have an important role in the current Ethiopian Growth and Transformation Plan and they are also likely to remain important in the future to come,” the Ambassador stated. He further said that the forum was an occasion to share experiences, create ties between Ethiopian and Swedish stakeholders and the beginning of a mutually beneficial business opportunity.

“Today, our cooperation is more about development, environment, peace and stability, of course trade and investment. Sweden wants to encourage a broader cooperation with Ethiopia with increased trade and investment relations and knowledge transfer,” the ambassador said.

The Forum was organized by the Ethiopian Embassy in Stockholm, the Ministry of Foreign Affairs and Valley International Projects (VIP).

VIP, a company that is also engaged in Agro-forestry stated that it has an interest to invest in the forestry sector in Ethiopia. The company has a plan to launch a project called a Paulownia Forest Project involving a fast growing tree that can provide a byproduct for energy. According to estimates, the project could cost around USD 200 million and is planned to be carried out in Oromia; Amhara; Tigray, and Southern Nations, Nationalities and Peoples Region.

[CapitalEthiopia]

The first denim factory in East Africa has begun trial production in Ethiopia.

Kanoria African Textiles Spinning Manager, Dina Karen, told ENA that the factory built in Bishoftu has started trial production.

The manager said the factory is the first of its kind in East Africa in terms of using modern technologies and producing fashionable jeans.

The factory fully owned by Indians is being built with over 43million USD, the manager said, adding that the construction of the factory that began a year ago has started its trail production with 70 workers. It plans to increase the workers to 350 on going operational.

The favorable investment atmosphere in Ethiopia and the wide market have encouraged the owners to invest in the country, Karen stated, adding that expansion would be carried out next.

Senior Industrial Engineer and Representative of the Ethiopian Textile Development Institute that supporte the factory, Teklay Gebre-Egziabher said the factory will have huge contribution in boosting the foreign currency of the country and popularizing its national brand.

The factory has the capacity to produce 12 million meters of denim annually, he added.

Another factory that produces inputs for this one will be built soon around the capital city, and the produces will be mainly exported, according to Teklay.

There are more than 130 big and medium textile factories in Ethiopia.

[ENA]

New energy-efficient facility will have a Czech brewmaster

The firm ZVU Potez, a Czech-based supplier of technology for the chemical, food and energy industries, has completed the implementation of a brewery in Maychew, Ethiopia. The contract is worth €27.6 million.

The modern facility for Raya Breweries will be inaugurated Feb. 15 with the participation of senior representatives of the Czech Republic.

The brewery has a capacity of 600,000 hectoliters per year. The project included the delivery of complete technology for the brewery plant as well as a boiler room, transformer stations, water treatment and sewage treatment plants, and a diesel generator serving as a reserve energy source.

The overall implementation lasted 24 months from the signing of the contract. “A first phase included the training of local personnel, and other phases will continue after the opening of the brewery,” Vladimir Čepelík, CEO ZVU Potez, said in a press release.

“We will acquaint them with our modern facilities and also we also offered them our specialist for further consultation.”

The brewery in the northern Ethiopian town of Maychew, approximately 650 km from the capital Addis Ababa, will create approximately 150 to 200 new jobs.

Czech master brewer Ladislav Pařízek will remain there to oversee production.

The technologies used are among the most advanced energy-saving solutions in the field of brewing, according to ZVU Potez. The plant captures CO2 during fermentation for further processing and also includes a system for reducing energy consumption. Energy created during the production process will be used to heat water. ZVU Potez subsidiary DIO Hradec Králové was also involved in the project.

“The African continent is very interesting for us. Currently we are developing additional business opportunities there and evaluating the potential of each individual investor. … Our extensive experience in the brewing industry … allows us to penetrate the markets from South America to East Asia,” CEO Čepelík said.

ZVU Potez is based in Hradec Králové, East Bohemia, with around 500 staff. Since August 2014, the company has been part of Swiss-based Safichem Group.

[PraguePost]

The most aromatic coffee, which emerges from the wild forests of Ethiopia, is making its way to Japan and this time around, bullet train passengers are sipping some 10 thousand cups per day, which is said to be the highest turn out so far.

Ueshima Coffee Co. (UCC), one the biggest Japanese coffee and tea manufacturers, together with the Japan International Cooperation Agency (JICA) have organized a promotional event in Japan where bullet train commuters would have the chance to taste Ethiopian forest coffee originating from the southwestern part of the country: namely Belete-Gera forestry in the Oromia Regional State.

According to Fumiaki Saso, head of JICA’s agricultural division, the event is getting momentum in Japan where commuters increasingly are expressing their interest to taste the coffee’s flavor which is grown in a wild forest naturally.

Next to quality and affordability, many consumers in Japan give priority for environmentally friendliness. Following suit, UCC and the likes prefer to ship commodities that meet such requirements labeling the cups with the origins of the coffee.

In his recent visit to Belete-Gera area, Naomi Nakahira, coffee advisor and cupper at the UCC, said that Ethiopia’s forest coffee has the potential to become one of the major global brands.

So far, the country sells Yigachefe, Harar and Sidama coffees as branded commodities internationally. Nakahira is certain that if branding procedures are dealt with, Belete-Gera forest coffee could become one of the leading brands in the specialty category.

A US-based NGO called Rainforest Alliance is behind the forest coffee certification activities internationally. It has been certifying Belete-Gera forest coffee annually since 2007. That has prompted Japanese firms and government agencies to take part both in the conservation and coffee buying businesses. Currently, UCC buys some two containers or 36 tons annually from farmers’ cooperatives in Belete-Gera forest coffee.

Saso of JICA said that branding the Belete-Gera forest coffee as the best specialty requires the attention of the government.

In a conserved 3,290 hectare of forest, farmers cooperatives such as Shabe-Sabaka are chosen for their best quality coffee harvest and are mentioned in the coffee cups sold in the fast edging train that connect the two Japanese cities of Tokyo and Osaka.

Selling Ethiopia’s finest coffee in the bullet train has some historical backgrounds, Saso notes. After the horrific devastation of the Second World War, the gradually emerging Japan was able to host Olympic Games. During the 1964 Tokyo Olympics, the legendary athlete Abebe Bikila, still highly regarded by Japanese people, won the men’s marathon competition. Japan is bidding to host the 2024 Olympics. Aimed also at commemorating the legendary athlete, both UCC and Japan Railway Company are promoting Ethiopia’s Arabica organic coffee among commuters.

Moreover, Belete-Gera coffee is set to be contestant in one of the coffee brewing championships in Japan. Annually, Specialty Coffee Association of Japan (SCAJ) organizes numerous coffee related competitions. In one of the categories called “Siphonist Championship” a Japanese contester was acclaimed for wining high prizes by brewing Ethiopian origin specialty coffee from Belete-Gera area. In September, a barista competition is scheduled to take place which, according to Nakahira, is planned to include Ethiopian coffee.

[TheReporterEthiopia]

The continuous criticism cotton producers and textile factories throw at each other regarding the very low price offered for locally produced cotton has led the Ministry of Industry to set the price.

Previously, the government imported cotton to fill the gap in supplies and to stabilize the price, but the new option encourages farmers to produce more and supply it to the textile factory at a fair price.

The textile factories, who are major buyers of local cotton, lament the inconsistent prices.  Consequently, they were forced to change their production cost several times. Producers  argue that the cost of labor, the high price of agriculture machineries, uncertainty in market, and weather conditions have  deterred them from  offering consistent prices to local producers.

The supply chain of cotton to market is also elongated resulting in lower earnings by farmers and channeling significant profits to brokers.  Brokers buy a kilo of cotton under 30 birr from farmers and sell it to factories from 40 to 60 birr.

“It is right for the government to stabilize the cotton market,” Tadesse Haile, State Minister of Industry said at a meeting with cotton producers held at Ghion Hotel on February 9. “We are aware of brokers who set the price of cotton randomly and that discourages textile factories which causes them to incur additional costs. If it has not been for that interference, we sometimes may experience cases where farmers produce plenty and find few buyers.” So we have to mediate the situation by setting a price that is fair for both farmers and factories. And we don’t want to keep on importing cotton. We need all locally produced cotton to be consumed by our factories. And setting a price will help us realize that.”

Tadesse further noted that his Ministry is in discussion with stakeholders to draft a regulation prohibiting the involvement of brokers on the delivery line of agricultural products to the market, because that interference has significant impacts on the industry.

“Our agricultural products, especially those that are used as inputs for other industries, must be supplied at a fair price. Otherwise our effort to transform agriculture into an industry will face a big challenge. So we have to move the brokers who disturb the price. We only need producers and factories to deal with the products.”

According to Tadesse, his ministry commissioned a research on BT Cotton, one of the different genetically modified cotton variety that is reputed to rendering high yields.  The industry ministry has submitted a draft bill along with a synopsis of the research for ratification by parliament.

“We need more cotton to maintain our growing industry, and using GMO is one of the alternatives to boost production,” he stated.

Though producers do not agree on the notion of shorter cotton supplies, the current bulk demand for cotton in Ethiopia is estimated around 100,000 tons while the supply is around 65,000 tones. Second rate quality of local cotton, lack of modern agricultural methods, poor irrigation systems and shortage of labor hampered the cotton industry from expanding. The Ethiopian Cotton Producers, Ginner and Exporters Association (ECPGEA) Vice President Abreham Tadesse criticized the government for not giving proper attention to the industry.

“There is 250,000 hectares of land available for cotton plantation but only 10 to 15 percent of it has been cultivated so far, and this shows  underutilization of  the resource,” the vice president corroborates his argument.

He argues that GMO cotton is not the solution to increase production.  “We can still manage to scale up production without GMO cotton if government gives proper attention to cotton farming like it did to sugar farms.’’

Yet an agricultural researcher, Dr Million Belay, Capital requested to give scientific views on the issue opposes the Ministry of Industry’s plan to allow the use of BT Cotton.

Dr. Million Belay, Director of Melka Werer Agricultural Research Station told Capital, “the Industry Ministry tells us the experience of Sudan and other cotton producers who made a good production by applying BT Cotton, and they argue that the chemicals that are used to kill cotton pests demand more finance while BT Cotton has its own immune system to combat pests.”

“However, my institution disagrees as the condition in other countries and in Ethiopia is so different; the soil type and other related and relevant matters must be studied.  No one gives an ear to our suggestion and the bill is in the final stages of ratification,” Dr. Million sadly commented.

[CapitalEthiopia]

Rearing milk producing animals has long been a traditional part of Ethiopia’s agricultural culture. At 49m head, its cattle herd is Africa’s largest and cow milk accounts for 92% of total milk production. However, most milk is still produced for own village and own household consumption. Linking producers and consumers is particularly challenging in Ethiopia. The dairy market suffers from a seasonal mismatch between supply and demand, the former fluctuating because of climate, the latter because of religious fasting.

Specializing in dairy sciences, Binyam Kassa worked for a government organization as a researcher and an independent dairy production/processing consultant for over a decade. He resigned to start his own business because of his strong vision to produce and market quality dairy products and capitalize on the strong relationships he had built with milk producers, input and equipment suppliers over the years.

Soon after entering into the dairy processing business, Binyam learned about the Ethiopia Sustainable Agribusiness Incubator (ESAI) project under Precise Consult International PLC in partnership with USAID. The three-year project works with start-up businesses, provides technical assistance to agribusiness entrepreneurs, supports innovative private sector actors, facilitates the start-up process for entrepreneurs and connects smallholder farmers to global markets. Although Binyam was well versed in the dairy sector, he saw working with the ESAI project as a great opportunity to gain the support he needed to start and manage a successful agribusiness that could tap into the untouched value-added dairy market and empower smallholder dairy farmers in Ethiopia. With the help of ESAI, Binyam was able to quickly develop a business plan that gained the interest of 9 banks who were willing to give Binyam the start-up capital he needed to fulfill his vision.

Lactal Creamery PLC raised 1.7M Birr in capital funds and established 3 shareholders as partners in the company. One prominent shareholder of Lactal Creamery is the Addis Ababa Livestock Production and Productivity Improvement Services (ALPPIS). Lactal Creamery is categorized as a manufacturing agro-industry engaged in the production of yoghurt, cheese and cream at its first phase, with future plans to diversify its product line to milk powder

after its second year of operation. The company’s head office is located in Adama but Binyam specifically chose to set up his milk processing plant in Asella in the Arsi milk shed zone of the Oromia region (175 km from Addis Ababa) due to the immense amount of opportunity in the region where currently there are no milk processors and raw milk prices are fairly low. There, he rents office and working space where within the first month all machinery was fully assembled and ready for production.

Binyam works closely with the Asella community. The Arsi Dairy Cooperative Union is the main milk supplier for Lactal Creamery, while Arsi University works with Binyam to transfer technology useful in the manufacturing of milk products. Aside from the strong relationship Binyam has built with local partners, he also reached out to other dairy incubatees in the ESAI project to sustain both his innovative efforts and to support theirs. Ethio-Feeds PLC will supply Lactal’s milk suppliers with animal feed to ensure that the cows are producing the high quality milk that they can and Hirut Dairy Product Distribution Company (HDPD) will assist with the packaging and distribution of the produced milk products.

If all goes as planned, Lactal will hire 27 employees once the factory is up and running at full capacity. Binyam has already secured clients ready to buy Lactal products: these clients include Beemnet Restaurant and My Burger. Lactal Creamery’s target market includes wholesalers, supermarkets, hotels and restaurants where milk products like cream cheese, ricotta, feta cheese, mozzarella, provolone, parmesan, gouda, and pasteurized and powder milk will be made available.

Although Binyam was well versed in the dairy sector, he saw working with the ESAI project as a great opportunity to gain the support he needed to start and manage a successful agribusiness that could tap into the untouched value-added dairy market and empower smallholder dairy farmers in Ethiopia.

A feasibility study, carried out on behalf of Yara International confirms significant potential to extract potash in the Danakil depression in northeastern Ethiopia.

The independent study identified an annual production of 600,000 metric tons sulfate of potash (SOP) over 23 years from reserves (Kainite, Carnallite and Sylvinite) at Yara`s Danakil concession. The company, which aims to begin mining activities in 3Q, 2018, is now seeking equity partners to develop the project.

The reserves will be mined using solution mining technology. The brine produced at the mining sites will be evaporated utilizing high solar radiation. The harvested salts will be processed and re-crystalized to SOP. Both standard and compacted SOP will be produced.

The product will be trucked 790km to Tadjoura, Djibouti, where the project includes a product storage and handling terminal at the new port currently under construction by the Djibouti Port Authority.

Capital expenditure of the project is estimated at USD 740 million, while operating expenditure is expected to amount to USD 167/metric ton FOB Djibouti.

The combination of a unique geological structure and an extreme climate in the Danakil depression required adjustments in the production process. Yara developed new technologies to fully utilize the local advantages.

Yara`s Danakil mining project has received the backing of the Ethiopian government, which has committed to providing electric power by building a 130km long power line. The government will also construct a new lowland transportation road to support mining operations. Sustainable water availability has been confirmed through a water exploration campaign, while an environmental and social impact assessment study confirms that the future activities comply with Ethiopian environmental legislation and international guidelines and standards.

[YahooFinance: UK&Ireland]

[Image source: eco-opia.org]

Ethiopia’s shoes export to Europe, Middle East, and East Africa is not bringing in a fair price as producers are not able to sell their products directly to buyers. Currently, the majority of Ethiopian shoe exporters sell their shoes to brokers at a price between USD 5 to USD 7 a pair.

The poor price offered for Ethiopian leather shoes slashes the foreign currency income the country should get from the sector by a significant amount.

Export of leather shoes fetched  USD 21 million in the past six months of this budget year, falling too short behind from the projected income of USD 70 million.

A number of factors are said to have reduced the earnings. Lack of raw material, smuggling out the products, illegitimately brokered sales, second rate quality of the products, and poor marketing strategy are some of the factors that add up together for the low performance. Yigzaw Assefa, President of Ethiopian Leather Industries Association (ELIA) told Capital that reaching the end users is the major factor hampering the sector.

“We are not getting the real buyers, our products pass through many brokers before they reach the consumer. Because of this, we don’t make good profit” he said.

Yet, Yigzaw is optimistic that the market prospect for the products is not overcast entirely. “The solution is in our hands, producing quality shoes that match global standards, using better technologies, and getting our way in to the end market are issues that we must focus on to solving our problems.”

He added that the government’s initiative of freeing the tax levied on imported raw materials is an important decision to revitalize the sector.

Berhanu Serjabbo, Public Relation Head of the Leather Industry Development Institute suggested that the government is about to set up a price floor for exported leather shoes to increase incomes. “We are not getting the proper income but now we are about to set a price floor, at least to cover the production cost. Before putting into work the minimum price, we have to raise awareness for the manufacturers to produce good quality shoes using modern technologies,’’ Berhanu said about the remedial supports.

With an approximate 35 million cattle, 39 million sheep and goats, 8.6 million equines and one million camels, Ethiopia is first in Africa and ninth in the world for its livestock population. However, the leather shoe factories are not giving the nation an acceptable volume of earning that could be reaped from this potential wealth.

[CapitalEthiopia]

Ethiopia seems well positioned to continue to grow and garner foreign investment, according to Seeking Alpha.com.

Ethiopia averaged 10.7 % economic growth rate over the last 10 years, more than double the annual average of countries in Sub-Saharan Africa which was 5.2%.

Tangentially, Ethiopia’s growth has not been tied to the development of mineral resources like oil and gas but it depends on infrastructure developments.

The Ethiopian government has put a great emphasis on infrastructure INVESTING in road and dam projects in order to provide reliable transport of goods, and also to provide cheap power to its inhabitants.

Its single focus (infrastructure) has led the nation to be one of the fastest growing in Africa and a future hot spot for investment, Seeking Alpha.com noted.

Over the last several years, Ethiopia has seen the likes of Hennes and Mauritz source supplies from Ethiopia, consumer goods maker Unilever is in the process of building a factory, and both Diageo and Heineken have bought breweries.

The recently purchased Heineken brewery in the outskirts of Addis Ababa is part of a 310 million euro investment in the country since 2011. Heineken’s brewery complements the already existing breweries in Ethiopia.

Other more speculative investment opportunities involve capitalizing on recent increase in exports of mineral resources.

Ethiopia’s tremendous growth has not been the result of a great discovery of natural resources, but due to an emphasis on infrastructure and government expenditure that is transforming Ethiopia’s economy from agriculture based to manufacturing intensive. Another step in diversifying the Ethiopian economy and further increasing growth prospects is the growing exports of mineral resources.

The mining sector in Ethiopia has grown significantly with government estimates stating there are roughly 1 million employed miners in the country, making it an important source of foreign currency. According to the World Bank, “In 2012, mining was responsible more than 19% of the total value of exports, and up to 10% of foreign exchange earnings. Gold makes close to 100% of mining exports and most of it, about 2/3, comes from artisanal mining.”

[WaltaInformationCenter]

Ethiopian Airlines is enhancing its offering to the UK business travel market with an improved business class product and the introduction of two new programs designed to win loyalty among corporates and individual business travellers flying with the airline on business.

UK business travellers who regularly fly with Ethiopian are invited to join the new ‘’Corporate Bonus Program’’. Through this scheme both the business and employee, will benefit every time an employee of the company travels. When an employee who is a member of Ethiopian’s frequent flyer program (ShebaMiles) travels with Ethiopian they will accrue 100% of the miles associated with their route. Companies that have opened a Corporate Bonus Account will also earn additional miles. These bonus miles will be calculated in relation to the frequency of the company’s travel with the airline.

Miles that are earned can be redeemed for flight tickets or upgrades (subject to the miles requirements of the program).

In addition to the new Corporate Bonus Program Ethiopian is also introducing a new “Corporate Incentive Program”. This will offer incentives in the form of upfront discounts or cash incentives at the end of the deal or in the form of complimentary tickets. With both schemes businesses can continue to have their travel needs managed through their own dedicated travel management companies.

Business passengers can also make the most of priority and online check-in, extra baggage allowance, fast track through security where available and full lounge facilities at a selection of airports globally. For those departing from Addis Ababa Ethiopian’s inflight catering provides authentic Ethiopian cuisine in addition to the regular inflight meals providing executive passengers with a taste of genuine Ethiopian hospitality. For executives needing to travel between Addis Ababa, Dublin and Los Angeles, a new route serving these destinations, three times weekly, commences in June. Addis Ababa serves as a hub for over fifty African destinations so connecting the west coast of the USA, with the continent of Africa.

[www.incentivetravel.co.uk]

[Image Source: www.borkena.com]

Ethiopia’s indigenous grain teff is garnering global interest as a new super food, while Ethiopia’s government tries to ensure local prices don’t rocket for Ethiopians.

Every six days a week an Ethiopian Airlines flight departs Addis Ababa for Washington in the US with a fresh batch of 3,000 injera on board. This pancake-shaped grey spongy bread is a centuries-old Ethiopian staple made from teff, a tiny grain now making a health food name for itself globally. “For the future this company is planning to distribute Ethiopian traditional food all over the world,” said Hailu Tessema, founder of Mama Fresh, Ethiopia’s first large-scale factory producing teff-based products.

Inside the factory there are several tall blue barrels full of teff flour mixed with water. The mixture is left there for four days to ferment. Afterwards the fermented mixture is moved next door where women scoop out small jug-sized amounts to pour onto a heated clay surface where it sizzles and turns into a pancake like bread which is called injera.

Calcium, iron, protein, amino acids

Teff’s tiny seeds are high in calcium, iron, protein and amino acids and it is also gluten-free. Even before the modern state of Ethiopia existed, Ethiopians have been grinding teff into flour to make injera, remaining unaware of the nutritional gem in their midst. But increasing global demand for healthy food along with Ethiopia’s large diaspora in cities like Washington has put teff flour in the spotlight. Teff flour can also be used to make any flour-based food such as bread, pasta, tortillas and cookies.

Mama Fresh has also eager customers in Europe. The company flies injera to Sweden three times a week, to Norway twice a week and to Germany three times a month, with demand increasing by about 10 percent every month, Tessema said. “Predominately it’s Europeans buying teff bread; those who cannot eat wheat or who are heath conscious,” said Sophie Kebede, owner of Tobia Teff, a UK-based business firm specializing in the grain. “When we started in 2007 nobody knew when we said teff whether it was a Christmas pudding or a banana split, but I’m very happy to say we’ve come a long way from that now,” Kebede said. “It’s not yet a household name but at least many people know what teff is.”

Protecting teff for the masses

Kebede gets her teff from farms located in southern Mediterranean countries. This is due to the Ethiopian Ministry of Trade strategically restricting exports of its increasingly sought-after grain to protect the country’s food security.

Evidence would suggest the government has a right to proceed cautiously, because teff’s global debut comes after a super grain quinoa hit a global market, rising consumption in more affluent countries. This made quinoa too costly for some locals in the countries growing it. “The government has to cover the daily consumption of its own people before it exports outside, which I can appreciate,” Kebede said. “But at the same time it is much better for us if we can get teff from an Ethiopian farmer, because who is better than an Ethiopian farmer when it comes to teff.”

The consensus among those involved in the teff industry appears to be that the ban will eventually be lifted, although when and how the government goes about it will require significant coordination. “Obviously you’ve got the risk of driving up domestic prices of teff, and nobody wants that at all”, said an American Matthew Davis, a partner at Renew Strategies, an early stage venture capital company based in Addis Ababa investing in Mama Fresh’s plans. “So I think the government is going to be very cautious about that, and the way they’re going to control that is by giving licenses to a select, controlled number of companies or exporters.”

Davis notes that already much teff is leaving the country illegally across borders to Djibouti, Somalia and beyond to the West. “If it’s going to happen, you might as well control it and get some tax revenue from it, and everybody’s happy.”

Wrestling with demand

Despite all the praise for teff’s amazing nutritional properties it does have an Achilles heel. Due to teff previously being limited to growing in Ethiopia, it hasn’t benefited from international agricultural research. Consequently, Ethiopian farmers haven’t had access to modern farming methods or techniques available to other crops.

Such constraints have kept the crop’s yields low and unable to keep pace with Ethiopia’s increasing population, thereby driving the price of the grain beyond many Ethiopian families. The Ethiopian Agricultural Transformation Agency is focused on increasing teff production to at least match domestic demand, after which exporting it should be more palatable. “The opportunity this presents to the country is significant and the benefit over the long term will far outweigh the risks”, Davis said, while noting the industry would have to commercialize and professionalize to export effectively, and take measures not to undermine the local market.

During the teff harvest, oxen are still used to stamp teff seeds out of the grass, followed by pitch forks to winnow. That hipsters in New York and Amsterdam are suddenly after a teff fix, might well perplex some of those 6.3 million Ethiopian farmers producing it.

Those at the forefront of teff’s global march, such as Hailu Tessema at Mama Fresh, appear content with the current trajectory. “I’m very happy, Ethiopia is the founder of teff, so like coffee our teff is becoming important all over the world,” Tessema said.

[www.dw.de]