“It is not like the old time,” said Mekdes Zerabza, manager of Waakan Hotel while describing how breweries are performing now in terms of distributing their products. Her hotel, established two years ago, is one of the busiest among its peers along Sierra Lone Street (Debre Zeit Road). Except for Raya and Meta Beer, the hotel offers all the other brands available in Ethiopia.

With internationally renowned beer companies and new brands entering the market, existing brands such as Dashen and St. George, a product of BGI, have become better at making their products available to customers, the manager explained.

“The introduction of Walia Beer into the market was like a wakeup call for them,” she said.

Previously Waakan used to get a maximum of 20 crates of Dashen Beer, she recounted, but the supply was irregular, with the hotel sometimes waiting for months to get the product. “But now they provide us as per our demand,” she added.

Breweries commonly use agents to distribute their beer and other drinks, serving particular routes. BGI Ethiopia, the pioneer of such distribution began in the late 1990’s. It divided the country into nine regions based on socio-economic profile and proximity. These regions included North (Tigray), West (Gonder & Gojjam), West 2 and Central. These regions were sub-divided into territories and each territory is partitioned among agents. The regions get the products directly from plants in Kombolcha, Addis  Abeba and Hawassa.

Addis Ababa can be looked at as a case study as the city by itself is considered a separate region for which six agents have signed contracts with BGI. These contracts are renewed annually incorporating daily and monthly reports from sales coordinators and promoters of BGI. In managing these channels, area managers at executive levels control the regions, coordinators operated at territory level, and promoters and sales managers at route and line levels.

Agents are evaluated through this chain of command.

“We have a much decentralized channel of distribution,” Gebreselassie Sifer, deputy sales director for BGI Ethiopia told Fortune at his office near the African Union headquarters.

Agents need to have experience in the brewery sector; they must be socially active and resident in the areas they intend to cover. They are also required to have adequate manpower, storage and supervision systems. The agreement with agents includes factory price, market price, and quotas.

“We give them the distribution map,” Gebreselassie said.

The same goes for other breweries, although they declined to discuss their distribution in detail.

“In general we work with distributors but other than that, the detailed questions asked are confidential,” said Serawit Bezabeh, communication head of Heineken, which produces 2.5 million hectolitres a year.

A stockist at Lideta, Mulugeta Muhaba, who distributed liquors, beer and soft drinks, said that one brewery required a three million Birr deposit from prospective agents, irrespective of their experience in distribution.

On its entry, Walia Beer quickly dominated the market. But now it seems that Walia, produced by Heineken, and Dashen Beer are in short supply, while St George is more or less delivered on demand, according to both Mekdes and Mulugeta.

While breweries mainly supply to their distributors, there are also the stockists like Mulugeta who get the products from the agents and informally distribute to end users.

Seyum Melaku, sales director for Dashen Breweries S.C. agrees that stockists have the role of balancing the supply but accuses them of inflating prices.

“The shortage in our product will be solved as the plant in Debre Berhan becomes fully operational,” said Seyum. He too declined to give details about relationships with agents on basis of confidentiality.

Altad Ethiopia Plc is one of six agents BGI has in Addis Abeba. It covers Mexico, Lideta and all the way to Burayu and Siga Meda, along the way to Tatek. Its territory is known as territory three, and is segmented in to nine routes for beer distribution, covered by 533 sales points.

It controls the distribution using its own coordinators.

“The competition has brought creativity to sell more,” said Andualem Mulugeta, sales manager for Altad.

Since January 2016, Altad has sold 130,000 bottles of beer, whereas last year during the same period, 40,000 bottles were sold, according to Andualem.

Not to be outdone, BGI’s Gebreselassie spoke in terms of the breadth of distribution.

“We have a beer that can be accessed anywhere in the country, from north down to the southern valley of the country,” he said.

Waakan’s manager concurred, observing that even at times of scarcity BGI’ s agents know how to balance and make the product available for all.

Meta Beer is also in short supply, but Blayne Tesfaye, communications head at Meta Abo Brewery, said that happens only occasionally.

There are now seven breweries with production capacity of 10.5 million hectolitres a year. From this BGI and Dashen take the lead with a capacity of three million hectolitres each. Data from the Ministry of Industry, show that Heineken and DIAGEO Meta follow by 2.5hlt and 1.1hlt, respectively.

Speaking of distribution Raya has come up with a new approach, establishing a company that can handle transportation to a certain level. A company called RaAZ Transport S.C. carries Raya’s bottles in a five-market region from the Maichew area in Tigray Regional State, to Weldeya, Addis Abeba, Meqelle, Shire and Maichew town. Beyond those points, agents handle the transportation.

At Waakan Hotel, Raya beer was delivered only soon after it came into the market, but not anymore.

“We are still working on fulfilling the demand of our customers. We don’t think we have reached to the point that we are able to satisfy the demand,” said Tiquabo Gebreselasie, corporate social responsibilities manager of Raya.

The company, with production capacity of 600,000hlt, has four agents in Addis Abeba that covers major market spot areas of Piassa, Haya Hulet, Tekle Hayimont, Gerje and Suluta. The minimum standard is to have at least three trucks. The agents know their borders from the maps provided.

Raya entered the market in March, 2015, recording 124.3 million Br in sales. Despite this the company experienced a loss of 82 million Br.

“Nowadays it is not only about the distinctive taste of the beers,” said Mulugeta. “Effective distribution is giving BGI an edge.”

[addisfortune.net/]

East African Aviation, a private company, has inaugurated Ethiopia’s first ambulance transportation service.

The Company owned by Captain Mulat Lemlemayehu, a former commercial pilot at the Ethiopian airlines, also inaugurated its newly established aviation school and air charter service at a ceremony later Thursday in Ethiopia’s capital Addis Ababa.

East African Aviation has become the first aviation company in East African region to provide air ambulance transportation, flight training and private charter services all in one place.

Officials of the company have told reporters that East African Aviation has introduced the first air ambulance service in Ethiopia with aircrafts that are equipped with state-of-the-art medical equipment and licensed medically trained personnel to provide a safe and efficient air transportation for those requiring prompt medical attention in East Africa.

The inaugural ceremony has taken place in the presence of senior government officials of Ethiopia, diplomats, and other prominent personalities among others.

Speaking on the occasion, Demeke Mekonnen, Deputy Prime Minister of Ethiopia, has hailed the air ambulance service introduced by East African Aviation.

The deputy prime minister noted that new investments are being introduced in Ethiopia due to the economic growth witnessed in the country.

Speaking during the inaugural ceremony, Mulat Lemlemayehu, Owner and CEO of East African Aviation, said,:

“With the state-of-the-art medical equipment fitted in the air ambulance, we specialize in transporting patients with the same level of care that would be expected from a hospital ICU.”

“Air ambulance has been non-existent in our country Ethiopia with over 90 million people, a tourist hub in the whole region of Africa and, above all, with a city like Addis Ababa that is the diplomatic capital of Africa where we have a big international community,” he noted.

He told reporters that East African Aviation has a team composed of accomplished, knowledgeable, and qualified pilots who have served Ethiopian Airlines for many years.

East African Aviation flight school has the first full motion simulation for a private school in Ethiopia, he said, the trainer aircrafts such as the Cessna 172 Sky Hawk glass cockpit are well tailored providing user friendly interface for the student and are known to be the best trainer aircrafts in its class.

East African Aviation said its aircraft for private charter, is the King Air 350 which is one of the most durable and comfortable aircrafts in its class.

With its capability of landing on short and gravel runway, the aircraft reaches cruise speeds of up to 578 km per hour and will get passengers to their destinations quickly and efficiently, according to the company.

Lemlemayehu has founded the company after having served the Ethiopian Airlines commercial pilot for 39 years.

With over 27,000 flight hours, Captain Mulat has the experience of flying aircraft ranging from DC-3, DH-6, ATR 42, Boeing 707, 720 upto to Boeing 777 and 787.

[www.coastweek.com/]

The 2016 Pan-African Executive Summit-one of Africa’s most ‘unique and high which draws Business leaders from 35 countries across Africa and all around the globe is set to convene in Addis Ababa, Ethiopia, March 15-16. Ms. Lisa Lambie – Managing Partner, Satatt Holdings and President of the summit said the event is “known for its unique track record of delivering tangible results with more advanced, effective, direct executive and investor engagement.”  According to the organizers, the key business areas of the 2016 include, Power & Renewable Energy; Agribusiness, Husbandry & Aquaculture; Real Estate and Hospitality; Consumer Goods and Manufacturing; Healthcare; Education; Tourism; Technology, Impact Investing and Entrepreneurship.

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’.

The summit deals with investment capital segments most relevant to Ethiopia and Africa’s evolving investment landscape in 2016, under which the event comprises Ethiopia Investment Segments for Investors and Executives including Investor Deal Forum. Summit attendees among others include business and investment firms from the Middle East Investment Partners, Saudi Arabia, Yemen, Lebanon, Oman, Qatar, Kuwait, UAE and Turkey. The official website of the Summit reads, ” Join Africa’s leading regional and international investors, executive game-changers, Ministers, industry titans, and award-winning entrepreneurs for one of Africa’s most unique, “high impact” Pan-African Executive Summits with Africa’s leading investors and executives challenged to deliver “game-changing business intelligence” and the “money points”  to peer investor audience on closing investment partnerships, optimizing operational value, 2016 financial returns, and impactful business leadership in 2016!”

[geeskaafrika.com/]

The Egyptian cable maker company called Elsewedy Electric Group is set to establish industrial zone in Ethiopia within the upcoming two years. This was stated at the African International Business Forum which was held in Egypt recently.

According to Egyptian Amwal Al Ghad English website, Elsewedy’s Chairman Ahmed El Sewedy said that the group is set to be the industrial developer for the zone in order to attract Egyptian investors to establish their projects in Ethiopia. Thus, the Ethiopian government on its part would start procedures of allocating two million square meters of land.

The Chairman said that African markets are always on the top of group’s investment plans. It was learned that the annual investments of Elsewedy Electric in African countries are estimated at around US$500 million in energy and power fields.

Meanwhile, the Egyptian Company for Solid Waste Recycling (ECARU) announced that it would supply alternative solid fuel to replace fossil fuels, notably coal, for the Ethiopian cement factories.

ECARU has signed a preliminary agreement with Messebo Cement Factory of Ethiopia on the supply of alternative solid fuel in Egypt recently, Amwal Al Ghad reported.

Moreover, ECARU CEO Hisham Sherif has as well signed a five-year memorandum of understanding with East African Mining Executive Director Basso Sodere of Ethiopia which would enable to establish a new joint venture in the near future.

The CEO further noted that the alternative solid fuel is one of the renewable energy resources since it has been extracted from agricultural wastes.

[www.ethpress.gov.et/herald/]

Export abattoir built by nine Ethiopian Diasporas in Somali State has gone operational. The abattoir, whose capital investment is 172 million Birr, has the capacity to slaughter 2000 cattle per day.

The abattoir was inaugurated by Livestock and Fisheries State Minister, Gebregziabher Gebreyohannes (PhD) and President of Somali State, Abdi Mohammed.

According to Gebregziabher, power lines and roads leading to the facility were constructed by the Somali State at a cost of 6 million Birr. He further noted that USAID extended 40 million Birr support for the project.

Patricia M. Haslach, US Ambassador to Ethiopia, on her part noted that the US Embassy is working to improve the development partnership between Ethiopia and the US.

The abattoir’s plan for the export of high quality meat was reviewed by Dr. Faisel Abdikadir, manager of the abattoir.

According to Fortune the institution creates 200 permanent jobs and 1000 others will benefit from supplying cattle for slaughtering.

[addisfortune.net/]

Around two million or more Ethiopians and foreign nationals of Ethiopian origin are believed to be residing in foreign countries. Directly or indirectly, through the remittances which they are sending to their families at home, these large Ethiopian Diaspora communities have so far been playing their part in boosting the nation’s foreign exchange reserves.

Capitalizing on the fast double digit economic growth for over one decade, the Ethiopian government more recently has issued Diaspora engagement policies aiming at encouraging and attracting many more Diaspora in the nation’s various golden investment opportunities.

Above all, the Diaspora engagement policies have been put into place in a bid to bring about everlasting and strong social and economic ties between the Diaspora communities and their homeland in an organized manner more than ever.

Indeed, with ever increasing international money transfer agents in the country, the amount of remittance income has been steadily increasing for obvious reasons lately. Unlike ten year backs or more, there are a huge number of Diaspora investors mostly in the service provision sector.

Also a sizeable number of Diaspora who have in depth knowledge of various field of studies, rich experiences and skills are often seen coming to their homeland and offering training as well as giving lectures to their fellow countrymen and women for free. This good gesture and noble deed of the Diaspora must be appreciated and encouraged as the saying goes give credit where credit is due.

In contrary of the aforementioned worthy acts of the Diaspora, some members of the Diaspora sometimes knowingly or unknowingly have been found operating in counterfeiting businesses and taking advantages of Diaspora tax exemption on certain goods for their own personal gains through immersing themselves in a crime of tax evasion.

Obviously, this malicious nature of fraud will sustain negative impacts on the economy of the country and more worse on those who pay tax candidly as well.

In addition to this, it will definitely open doors for various forms of bureaucratic red tapes so long as the government is forced to take precaution measures to prevent such fraud.

It is true that, on several occasions in the past, the government had allotted plots of land for housing construction for the members of Diaspora. It is an open secret many of them sold the given land automatically without building or having built houses overlooking the laws in this regard.

Thanks to the existing peace and stability in this country, enormous members of Ethiopian Diaspora are showing great interests in investing and living in their homeland than ever before. This great news will get the required momentum and benefit to the nation when the Diaspora engagement policies are used effectively with a view to safeguarding the interests of both the nation and members of the Diaspora.

In several organized meetings for the members of Diaspora here and abroad, they voiced complaints about lack of necessary infrastructure and rampant corruption and so forth.

Nowadays, lack of the necessary infrastructure is being solved once and for all as the nation is aggressively investing in light and heavy electric railways construction. This for sure would interconnect the states of nation as whole and open up vast investment opportunities in the near future.

Moreover, the nation is right now building the biggest hydro-power dam in its history. Hence, the recurrent power outage will certainly be a past history. Apart from the aforesaid mega projects and others, the nation has been putting in place every effort to modernize its financial and communication systems.

As to the fight against corruption, the government has been taking punitive measures against corrupt officials on several occasions. It would continue doing the same in the future in its efforts to ensure good governance.

In sum, it is high time for working towards effective utilization of Diaspora engagement policies in the country.

[www.ethpress.gov.et/herald/]

Ethiopian Statistics Agency (ESA) announced Ethiopia’s year-on-year inflation had declined from 10.2 percent to 8.7 percent in February.

ESA noted there was a slight decline regarding the price of food, especially cereals. Nonetheless, non-food inflation increased in the same time. This is because of the rise in khat, clothing and footwear, construction materials, firewood and household goods and furnishings price.

According to Fana Broadcasting Corporate, there is a rapid price increase in Addis Ababa when seen relatively.

[www.fanabc.com/]

On a visit to Addis Ababa five or six years ago, I heard the name of Arkebe Oqubay. He was being widely praised for, as mayor, transforming the capital of Ethiopia – in much the same way as Babatunde Fashola, then the governor of Lagos State, Nigeria, was credited with improvements to life in Nigeria’s commercial capital.

Oqubay’s fame has been further enhanced in that acclaim for this book was such that the wait for a paperback has been greatly shortened by the publisher. It is a book that has been described by Carlos Lopez, UNECA’s executive secretary, as ‘a good case study for other countries to emulate: a must-read for Africans engaged in structural transformation’.

It would be difficult to argue against that recommendation, but it has to be acknowledged that Ethiopia has certain advantages when it comes to developing and exploiting an industrial policy.

Firstly, it has exceptional energy prospects, particularly with hydroelectric generation. The Ethiopian Grand Renaissance Dam on the River Nile will be Africa’s biggest hydroelectric facility.

The ability to tap onto affordable and reliable energy resources is deemed a vital precondition for any successful move towards industrialization, and Ethiopia has that ability in spades – even before you consider the potential oil and gas, solar, wind and geothermal resources that might be developed.

One of the big lessons from Made in Africa is that countries must play to their own strengths. However, that is no watertight guarantee of success, as the example of Ethiopia’s leather goods industry illustrates. Despite Ethiopia having Africa’s largest livestock herds, Oqubay writes that ‘the performance of the sector has been disappointing.’

What is more encouraging is Ethiopia’s determination to learn from its mistakes. Oqubay writes that despite various failings, ‘recent policy on value addition and new entrants is helping to break the logjam in the sector. Moreover, there is recent evidence of more investment, better quality and increased exports of higher-end products.’

Floraculture is one sector where there is simply no doubt about the success of the industry. Oqubay states: ‘It emerged in 2004 and has since shown sustained growth.’ He says that cut-flower industry has generated close to $1bln in export earnings and created direct employment for about (higher than the combined employment in cement and leather sectors).

But the author does point out explanations for the sector’s growth and success do vary. ‘One widely shared explanation,’ he asserts, ‘has been the comparative advantage which emphasizes natural endowments as the key sector, rather than policies or the role of the state.’

Alternative views also persist, such as that expounded in the UNIDO/UNCTAD Economic Development in Africa Report 2011 that states: ‘In Ethiopia, state activism played a critical role in the development [of the industry].’

Value chain spin-offs also includes air freight, which comprises over 50% of floriculture’s cost component. With Ethiopian Airlines, that cost becomes mainly a domestic expenditure, valuable to the economy as a whole.

[African Business]

Spain yesterday expressed readiness to strengthen business partnership creating better business climate with Ethiopia. The Spanish Institute for Trade Promotion (ICEX) jointly with Spanish Embassy have launched multilateral trade mission.

Trade State Minister Ayane Zewde said on the occasion that Ethiopia has enormous investment potential for Spanish firms. The volume of bilateral economic and trade balance between the two countries is still modest. Thus, both countries should join forces to create an Ethio-Spanish commercial network and praised infrastructure, energy, renewable energy, water treatment waste management and urban development attained by that country.

Admiring Ethiopia for being among the ten fastest growing economies in the world as well as for its growth prospects, recognizing that these facts make Ethiopia attractive market for investors, Spanish Ambassador Borja Montesino on his part said that both countries have a number of common values.

Ethiopian Chamber of Commerce and Sectoral Association Secretary General Endalkachew Sime on his part said that the second Growth and Transformation Plan aims to encourage the involvement of the private sector constituting a great opportunity for foreign firms in Ethiopia.

In this first ever event which ends today, over a dozen big Spanish companies from the environment, energy and infrastructure sectors took this opportunity to explore investment opportunities in Ethiopia, it was learnt

[www.ethpress.gov.et/herald/]

Egypt’s agri-business leader Wadi Group targets expanding activities in Ethiopian poultry sector within the upcoming period through establishing fattening farms and other related facilities, CEO Tony Freiji said Monday.

Speaking to Amwal Al Ghad, Freiji added that over the last years, the group aimed at expanding in a number of African markets through establishing agricultural and industrial base to develop poultry, agricultural crops, and fodder industry sectors.

Wadi Group combines all of its agro-business activities including poultry and fish farming, as well as feed and processed food products.

It manufactures cooling cell pads and ingredients for animal, poultry and fish nutrition and covering the logistics services for merchandise through land and river transportation.

[amwalalghad.com]

Great Abyssinia announced it would invest more than 500 million Birr in the aim of expanding its existing production facilities of soft drinks as well as juice beverages in Ethiopia.

The existing facility, which was established at the cost of 188 million Birr in Sululta, produces Prigat Juice in mango and strawberry flavors. In addition to this, it produces carbonated soft drinks of Splash Brand series. This series includes flavors of coffee cola, orange, and passion fruit orange, malt pineapple, fresh lemon and apple. This facility has a capacity of producing 13,500 bottles per hour and it is operational for 22 hours with 400 employees.

Great Abyssinia’s new investment is going to be in Sendafa on 25,000 square meters of land and the expansion is going to be made in three phases. The first phase is expected to be concluded in a year time and expected to have a production capacity of 36,000 bottles in an hour.

Upon completion of all phases the company’s production capacity is going to increase to 100,000 bottles per day.

[www.thereporterethiopia.com/]

The 4th International Coffee Conference kicked off Monday in Addis Ababa, Ethiopia, at the United Nations Conference Center under the theme “Nurturing Coffee and Diversity.”The Conference attracted more than 1,000 international coffee producers, buyers, decision makers, private sector representatives and international agencies.

In his opening remark, Prime Minister Hailemariam Desalegn, said Ethiopia is ready to put in place coffee development and marketing system which guarantees the equal benefit of actors in the coffee industry.

Ethiopia, which is the origin of coffee Arabic, is the principal beneficiary from coffee export. Coffee accounts 25 percent of the total export earnings of the country, he said.

Ethiopia and Uganda are the only among the 25 coffee supplying African countries with no decline in coffee productivity; he said, attributing this to the due attention Ethiopia has given to the sector.

According to the Premier, Ethiopia has set a target of becoming the second largest coffee producing country in the world within the coming five to seven years.

Hailemariam expressed his hope that the Conference will discuss on how to solve the many challenges of the coffee industry.

Africa’s vulnerability to climate change and coffee price volatility should end, Deputy Chairperson of the African Union Commission (AUC), Dr Erastus Mwencha, said.

In a related development, some 53 companies and unions engaged in coffee production and processing staged exhibition at the conference.

[www.apa.org/]

Bahru Jemal, deputy manager of Feleke Trading PLC which is a manufacturer of Hamad foam relates the edible bread with the inedible foam when he tries to explain the manufacturing of foam. Just like a small amount of yeast rises the dough when bread is baked, so do a small amount of mixed chemicals, such as polyethylene, give rise to almost a one meter thick foam, says Bahru.

Hamad joined the market in 2007 on a 2,000sqm manufacturing land located at Nifas Silk-Lafto District. Unfortunately, a fire accident destroyed the factory in 2013 and it had to discontinue its production until 2014. In September 2014, the factory had joined the market again, establishing its manufacturing in Alemgena town, 26Km from Addis Ababa, with a 20,000sqm land with 20 million Br initial capital, stated Bahru.

The chemicals which are inputs for the production of foam, are mostly imported from China. The amount of chemicals and their combination will determine the density of the foam, which in return determines the quality of the foam. Foam, with a high density also known as HD foam products represents a high quality, having longer durability and comfort while medium density results an average quality and the lower density (LD/star) is known for being a lesser quality product.

Different factories use different standards of density level in accordance with the market demand however, there is no description or any other way a customer can differentiate between them. Most of the customers who come to purchase foam have a habit of pressing down the foams with their hands in order to find out the foam’s quality, stated Hana Nega, salesperson of Ethio-Foam. Samuel Tadese is one of the customers Fortune met with at Ethiopian Household & Office Furniture Enterprise (ETHOF) Stadium Branch while he was trying to find out the quality of the foam subconsciously extending his hands to press down on the product.

“I honestly do not know what I was trying to find out by pressing down up on the foams” he stated with a grin.

If the foam gets back up quickly to its place after you press down on it that means it has high quality. However, low quality products stay down or take a longer time to get back to their original shape, explained Bahru. The production of foam has a set standard by the Ethiopian Standard Agency, stated Shimelis Arega, public relations at the Ministry of Trade. However, the standards are not forced by law as they are not a mandatory standard, which has an immediate effect to health or environment, he added.

The production of foam will not end once it is baked. Next, the baked foam will be left for eight hours to cool down and maintain its shape. After that it will be slashed down to different thickness ranging from 12cm to 24cm. And the standard width will be 75cm, 90cm, one meter, 1.5 meter having 1.9 meter height. Factories also accept a customized order from an individual customer, stated Mulat Foge, general manager of Amaga PLC.

The final process of manufacturing foam involves wrapping and sewing the produced foam with locally produced sheet printed with the company’s brand. The sewing machine will require two people, one to hold down the foam in place while the other sews and operates the machine.

After it is wrapped, the foam will be ready for the market. Mostly, universities and hospitals buy the bulk of the products directly from the factory whereas wholesalers and retailers will take care of the individual market demand by providing various brands of foam from different factories. The market consists of older brands such as Kangaroo, Addis Ababa, Rainbow foam and newcomers like Tiger, New Flower and Metiket foam. Currently, there are 69 factories that are engaged in the foam manufacturing business, according to Ethiopian Investment Agency, including three from China and one from Yemen. However, in 1992 there was a sing company, Kangaroo Plastic PLC until it was joined by Rainbow Plastic and Foam Industries PLC a year later.

The price for foam in the market roughly ranges from 500 Br to 1200 Br depending on its thickness and size. However, the LD foams which make it to the market without a wrap can be sold for 200 Br to 300 Br. Factories produce LD foams with a low production cost in order to make the products available at lesser price possible, stated Mulat. Wholesalers spend a total of 70 Br to 100 Br for wrapping LD foams with sheet.

The other type of product that is in high demand currently as a result of its medical benefits is bonded foam. Bonded foam is hard as rock mattress, which is produced from grind and pressed, misshaped or chopped foams and people use it to get relief from back pain, explained Bahru. Bonded mattress is expensive compared to the other products ranging from 4,000 Br to 6, 000 Br depending on its thickness. And extra foam has a compromise quality between bonded foam, also having an average price between the two.

There are also used foam products if you go down to Merkato behind Raguel Church with a price of 250Br to 300 Br, which are bought for around 150 Br, according to Dawit Begas, used foam retailer. There, you will also encounter a kind of middlemen tirelessly asking if you are looking for foam. Eshetu Haile, 59 and a father of four, is one of these middlemen who will take you to foam shops if you are looking for one, getting paid by the shops for his services.

Even though the legal frameworks in Ethiopia do not forbid the manufacturer from participating in retail the market as long as it has a license for both wholesale and retail trade, there are upset retailers in the foam market over the manufacturer competing with them in the retail business. It is unfair for them to snatch an individual trader who comes looking for foam, stated a foam retailer in Merkato.

It is not only price but also older brands that lure customers to a certain product, according to Hana. But Bahru assures Fortune there is still untapped market for the product. Most of the market demand for foam comes from rural wholesalers, the urban market is shifting to spring products, she added, attributing the reason of an improved economic condition. Locally produced spring foams have a competition from exported products, mostly from Italy and Dubai, stated Senayit Gebrehiwot, salesperson of ETHOF.

[addisfortune.net/]

A heavy truck assembly plant, established in Meqelle town, Tigray Regional State, by Mesfin Industrial Engineering Plc in partnership with MAN Truck & Bus AG Company of Germany, was inaugurated on Friday March 11. The plant has the capacity to assembly 1,000 trucks per annum, by importing manufactured parts from Germany. The factory, which is the first of its kind in the country, will help to save foreign exchange, Habte Hadish, general manager of Mesfin Industrial Engineering Plc, said at the inauguration. During the ceremony. Chief Executive Officer of the Endowment Fund for the Rehabilitation of Tigray (EFFORT) Group.

[addisfortune.net/]

Almeda Textile Factory has finalized its 86 million Br expansion that took place over the past six months in a bid to increase its fabric production capacity by 100pc.

The expansion is the first of three stages and focused mainly on replacing machinery with the latest products. The company has imported Rieter brand C-70 carding machines, a New Draw Frame finisher machine and an Open End R-35 from Germany and Switzerland, as well as a Muratec winding machine from Japan. These are said to be easy to maintain, and demand fewer spare parts than the replaced machinery.

Energy saving was another objective as the machines the company changed, took a lot of time to power on and off.

“These are easily manageable,” said Tekelemariam Tesfu, general manager of the factory.

The company’s productivity will now be enhanced. Spinning, the production of thread, which used to yield 20,000kg per day will now increase five-fold. This will enable the company to fulfil its own production requirements, and also look for export opportunities, thereby saving 30 million Br to 40 million Br. These costs are incurred by Almeda annually for the purchase of thread from other factories.

For the remaining production processes, resources and capacity will be better utilized. Because of the increase in the production at the spinning stage, the weaving and fabric making will also increase, making use of existing machinery for the latter two. Weaving will reach 32,000m of textile roll from the former output of 24,000m a day – an increase of 33pc; while the fabric making will be doubled to 7,000kg.

The company’s technicians, in collaboration with three experts from the suppliers, handled the installation and commissioning of the equipment.

Almeda has at its disposal, 205 million Br in revenue collected from the local market and an additional three million dollars from exports in the past half year. It has secured all of its costs for the expansion from Development Bank of Ethiopia.

The plant lies on a 450,000sqm plot of land in Adwa, a town, 1,125km north of Addis Ababa; and was established two decades ago under the umbrella of the Endowment Fund for the Rehabilitation of Tigray (EFFORT),

Raw material, such as cotton, is sourced from its sister company, Hiwot Farm Mechanization, located in Humera, as well as from other farms in Afar, Gambella and the Southern Nations, Nationalities & Peoples Regions. The textile sector in general is said be performing beneath the actual quantitative and qualitative demands on the sector. In the 2014/15 harvest season, the total production was 43,000tn of cotton, produced from 60ha to 70ha while the demand was 100,000tn to 120,000tn.

To make things worse, areas in the western lowlands of Ethiopia, such as Metema, were affected by the ongoing drought. This fiscal year’s production has therefore been even more affected, said Bantihun Gessesse, communication director at Ethiopian Textile Industry Development Institute.

Quality of cotton was also said to have affected the sector which has been prioritized by government in the second Growth & Transformation Plan (GTP II).

Price is another factor. Imported cotton is significantly cheaper, with differences of 5,000 Br or 17pc on each tone. Low quality cotton makes thick, short threads, and can only be used to produce sturdier garments, whereas better quality cotton produces finer, longer threads and can be used to produce export standard garments.

The fact that most of the cottons cultivated in Ethiopia are dependent on rain and not on irrigation, is responsible for the lower quality and productivity. Had irrigation been used, more productive cotton bolls would have resulted.

All this adds up to poor performance in exports. During GTP I, the country had planned to export a billion dollars’ worth of products but only managed to export products worth only 456 million dollars. For this half year, 43 million dollars’ revenue was collected from exports out of the expected 60 million dollars.

Textile companies that were urged to be more export-oriented chose the other way around, focusing more on the local market, said Bantihun. Giant textile companies, such as MNS and Saygn Dima that were supposed to be sources of exports, were categorized as least performers, with production falling 50pc below expectation.

“The local market is more attractive,” said Tekelemariam.

In addition to its export destination in the USA, Canada and Europe, the factory is assessing opportunities in South Africa, India and China.

[addisfortune.net/]

Ethiopia’s first expressway, Addis Ababa – Adama Expressway, generated 78 million Birr income during the first six months of the current fiscal year.

According to the Tewodros Asrat, Finance Team Coordinator at Ethiopian Toll Roads Enterprise, currently, the expressway in average serves 14,000 vehicles per day and generates 450,000 Birr income in the mean time.

The coordinator further explained the expressway’s income might surpass previous year’s gross income.

It was back in 2014 that the toll road went operational with a 6 lane expressway and 7 toll stations. The road has eight toll booths and it is equipped with surveillance cameras, lights and fences throughout the entire 85 kilometers. It also has 48 gates, 8 large bridges and 77 smaller bridges.

The toll way was built at a cost of 11.2 billion Birr out of which the Chinese Exim Bank financed 350 million USD.

[addisfortune.net/]

Omani Products Exhibition (OPEX-2016) will be held in Addis Ababa, the first venue outside of the Middle East to host OPEX, in the middle of next month.

According to a press release sent to ENA, 100 Omani business companies engaged in agro industry, food, building materials and others will exhibit their products.

The exhibition will provide opportunities for business to business networking between the Omani businesses and their Ethiopian counterparts, it indicated.

Addis Ababa is selected as a venue for OPEX 2016 for the fast and double-digit economic growth it has experienced for over a decade, said the organizer, adding that Oman sees market and investment opportunities in Ethiopia besides considering it as a gateway into the growing African market.

The release stated that the exhibition is a result of the mutual efforts of Ethiopian and Omani Chambers of Commerce to make successful business to business relation.

Omani Products Exhibition (OPEX) is an annually organized event set to create a market for locally produced Omani products.

[www.ena.gov.et/]

According to the African Private Equity and Venture Capital Association, there were reportedly 158 private equity transactions in the East African region between 2007 and 2014, totaling approximately $1.5B (1). Now, with Ethiopia being the second most populous country on the continent with over 95 million people, one would expect for the majority of the capital to have been deployed to this country. Unfortunately, Ethiopia still has a ways to go. Only 4% of said 158 deals completed in the region took place in Ethiopia, accounting for only 7% of the impact capital distributed. Kenya, with less than half Ethiopia’s population, has attracted the majority of private equity transactions and has become known as the private equity hub of the region. In addition, according to the Global Impact Investing Network’s 2015 impact investing report on East Africa, “Ethiopia’s financial services sector – and particularly the financing options available to small and medium enterprises (SMEs) – lags that of other major East African economies” (3).

While it seems Ethiopia may have been receiving the short end of the stick in recent years, many in the investing world believe this will soon be changing.

FUTURE STATE OF PE IN ETHIOPIA:

There are several reasons why Ethiopia is becoming a rising star in the region, one being the country’s double-digit gross domestic product (GDP) growth rate over the past ten years, which is expected to continue over the next five years (4).

In line with Ethiopia’s economic growth, the country’s population is expected to continue to increase. If economic output advances faster than population growth, the country will see a broadening of its middle class. As real / disposable incomes rise, demand for higher quality goods and services will rise and the private sector will respond and compete for customers. The good news is that there are plenty of driven and professional Ethiopian entrepreneurs who are more than ready to meet this growing domestic and international demand by providing local value-chain addition across various industries.

The Ethiopian government is in favor of this new industry and has thrown its support and weight behind the small to medium sized enterprises that, with the right partners, could become the market leaders of tomorrow. The government’s Growth and Transformation Plan II seeks to make Ethiopia a lower-middle income country by 2025 through rapid (double-digit) economic growth, industrialization and structural transformation (5). The two pillars that will drive this major development will be manufacturing and agriculture.

Ethiopia is home to many promising investment opportunities in both of these key sectors, among several others, a fact that is not lost on international private equity investors. The agriculture industry is ripe with investment opportunities in major commodities such as coffee, honey, teff, sesame, flowers and livestock. And the manufacturing industry is just as plush with its ever growing market for fast moving consumer goods, textiles, etc. In fact, in 2014 a major private equity firm – KKR – invested $220M into an Ethiopian rose farm. While large deals by private equity firms and institutional investors are important and vital to the country’s continued growth, they unfortunately do not address the important issue raised before – Ethiopia remains one of the most capital constrained economies in the region for SMEs.

CUE THE RISE OF THE GLOBAL IMPACT ANGEL INVESTOR

High net worth individuals (HNIs) across the United States are looking to engage their personal wealth in ways that are different from the typical financial portfolio or fund. High impact (and at times higher risk) investments in frontier economies, such as Ethiopia, are increasingly becoming an important part of said investors’ financial goals. The reason? Investing in SMEs located in developing countries can provide investors with a double or even triple bottom line – financial returns, positive social impact and positive environmental impact. Every dollar invested has the potential to not only provide the company with the ability to scale, but also create jobs in the local community, pay workers a better wage, provide employees with healthcare, pay taxes, and so much more. Impact investing essentially combines the best elements of philanthropy and traditional investing.

Operating under the philosophy of “doing well, by doing good”, many governments and NGOs are seeing impact investing as the long-term development solution for emerging economies, as it sustainably contributes towards a country’s economic growth. In lieu of giving a hand out, investors and development organizations can, together, give these countries a hand up – empowering them to take over their own development stories.

[www.renewstrategies.com/]

The Economic Commission for Africa (ECA)’s Executive Secretary of Carlos Lopes said that although Africa has experienced unprecedented growth over the past decade, the continent remains home to the world’s highest proportion of poor people.

In his statement during the just concluded Africa Transformation Forum, held in Kigali, Mr. Lopes made a strong case for structural transformation in Africa saying that it is imperative that the continent focuses on the potential offered by industrialization.

He defined the structural transformation not only as a shift from a simple reallocation of economic activity across three broad sectors (agriculture, industry and services) that accompanies the process of modern economic growth but also as all that encompass issues of sustainability and inclusiveness.

Mr. Lopes said that the continent should industrialize through the expansion of commodities value chains, through the positioning for agro-business to act as the pull factor for agricultural to get out of the doldrums and through the capacity to attract low-value manufacturing production facing rising labor costs in Asia.

“We need to look at the industrialization as a multi-faceted way. It is not just producing the manufactured goods. It is about transforming the society’s structural production into much high gear”, he said.

Discussing what kind of industrialization we need, Mr. Lopes said that it is the one that is specific to our African conditions and that must be linked to agricultural transformation.

“Because our agriculture has the lowest productivity in the world, the only way we are going to be able to catch up with productivity is by linking it to agro processing. Not living it alone, but adding value to the chain”.

Mr. Lopes explained that because Africa has a huge population growth that comes with a huge middle class growth there is a huge demand for processing food.

“Africa imports 83% of its processed food from yoghourt to cheese to beef to chicken. Everything that is processed we are importing in a big number. If we industrialize part of agricultural outputs, we are satisfying our internal market and we are creating possibilities of increasing productivity. That’s is the link of structural transformation”, he said.

African Transformation Forum (ATF) came to an end with the formation of “a Coalition for Transformation”.

The meeting was organized by the African Center for Economic Transformation, which began operations in 2008 as a “think and do” tank, determined to help equip African countries with the knowledge and tools to pursue transformative growth.

[newbusinessethiopia.com/]

3. Rail Transport Construction in Ethiopia

Ethiopia has lately operated the first metro (light rail transit) in Sub-Saharan Africa that covers 31.6 KMs which also have the capacity of transporting 200,000 passengers daily. Ethiopia has also almost completed the Addis Ababa-Djibouti Railway which is a heavy rail system that extends from Sebeta (Ethiopia) to Djibouti-post covering 656 KMs.

This East African nation is building national railway network that connects the whole country.  Addis Ababa – Dewela – Durale, Mekele – Hara Gebeya /Weldiya, Addis Ababa – Ejaji – Bedele/Jimma and Weldiya – Semara – Elidar – Tadjourah lines are among the railway network that are under construction. Ethiopia has planned to set up the First Railway Academy in Africa within its Phase II of the ambitious Ethiopian Transformation Plan.

2. Largest Airport in Africa

Ethiopian Airports Enterprise is undergoing and expansion of the existing Addis Ababa Bole International Airport with a budget of  $350 million. This project is scheduled to be completed in 2018 and hoped to help the airlines handle 21 million passengers per year (three times of the current passenger capacity).

Ethiopia has announced its plan to build a mega-airport capable of handling up to 120 million passengers a year which will cost $ 4 billion. The Ethiopian Airports Enterprise announced in October 2015 that the mega-airport will be built within a radius of 100 kilometers of Addis Ababa.

Ethiopian airlines announced “Vision 2025”, a 15-year development strategy, in 2010. According to “Vision 2025” Ethiopian Airlines plans to increase its fleet to 120, the number of destinations to 90, carrying more than 18 million passengers and 720,000 tonnes of cargo, with 17,000 employees. ″Vision 2025″ also considers a fourfold expansion of the capacity building for trainees in the airline’s aviation academy. With Vision 2025 Ethiopian Airlines aims to become the largest and leading carrier in Africa by 2025 providing different aviation services.

1. Electric power and renewable energy projects in Ethiopia

Ethiopia is undergoing massive electricity and renewable energy projects that are mainly hydro-power but also in wind and geothermal energies.

Ethiopia has lately opened Adama and Ashegoda wind farm with its 153 MW capacity (the largest wind farm in sub-Saharan Africa) and 120 MW of electricity respectively.

Ethiopia has already started construction of a geothermal electric power generating capacity of 1,000 MW per year in the Rift Valley in two phases. The first phase that is under construction will produce 500 MW per year and scheduled to be completed in 2018 and the second phase will generate another 500 MW per year and planned to be completed in 2021.

Gilgel  Gibe III which has  the total generating capacity of 1870 MW will be operational within 2016.  Gilgel Gibe IV and V hydroelectric power dams which has combined generation capacity of 2050MW are planned to be built with this five-year national transformation plan.

Ethiopia is also building another ambitious hydropower dam that is the biggest Africa and one of the largest in the world, , Grand Ethiopian Renaissance Dam GERD, with a budget of $4.8 billion and planned to be completed before 2020. The grand Ethiopian renaissance dam is under construction on the Blue Nile River in Ethiopia and more than 50% completed as of March 2016. This dam will have the capacity of generating 6,000 MW power.

Ethiopia plans to boost the country’s total generation from the current 4,200MW to 17,300MW by 2020 which is at the completion of its’s Growth and Transformation Plan (GTP II). The long term goal of Ethiopia’s power generation is to reach a generation capacity of 37,000MW by 2037.

[hahudaily.com/]