Tepi Coffee Plantation became a fully private company in a 733.2 million Br deal which saw the transfer of the 49pc government share to Green Coffee Agro Industry Plc, which already held a 51pc share.
The company signed an agreement on Friday August 14, 2015 at the Hilton Addis Hotel, with Green paying 266 million Br upfront. The rest will be paid in a five-year period.
In 2011, the two had formed a joint venture, with Green committing to improve the productivity of the plantation from four quintals per hectare to 12ql. It is said to have exceeded target and achieved 13ql. The transfer was based on this agreement.
Tepi plantation was one of three coffee plantations administered by the Coffee Plantation Development Enterprise. The other two are Bebeka and Limu plantations, which are also now privately owned. Bebeka Coffee Plantation occupies 10,000ha of land in Bench Maji zone of the Southern region. It was operated under a joint venture agreement between PPESA and Horizon, a MIDROC company, until the latter fully took over Bebeka and Horizon Addis Tyres for a total of 667.2 million Br. Horizon also owns the six plantations that make up Limu Plantation.
“We did not want to sell the plantations as an Enterprise, because the capital requirement would be so high that the local investor would be driven out of the competition,” said Beyene Gebremeskel, head of PPESA.
Following the total transfer of ownership, the company will immediately be engaged in replacing old plants with new ones, planting new coffee plants in vacant spaces, and pruning existing ones to be more productive.
“We are importing different machinery from Colombia and Brazil for pruning and collection of coffee,” Tadelle Abraha, the general manager and the major shareholder of Green, told Fortune.
Tepi Coffee Plantation straddles the Southern and Gambella regional states, with 70pc of it found in the latter. It has a plan to cover 20,000ha of land with irrigated coffee plantations in the next five years.
Green plans to invest 450 million Br more to start roasting and packaging ground coffee and to replace aging washing machines, imported from India and England, with new ones from Brazil, Tadelle says.
The plantation currently produces 60,000ql to 70,000ql of coffee a year.
With the addition of Tepi, Green Coffee now has three plantations, including two in Kaffa, one covering 1,500ha and the other, 1,000ha. It employs around 7,000 people, according to Tadelle. The Tepi plantation also has 25 smaller farms with 100 bee hives, spices and palm trees. It has acquired additional 3,000sqm of land in Gambella for the palm plantation.
The company will recruit consultants from Kenya and Colombia for experience sharing and increasing yield per hectare.
Starbucks is the major buyer of Green’s coffee, according to Tadelle, who says that he is also looking forward to selling coffee honey (a type of honey bees make from the nectar of coffee flowers), to that company. Starbucks is reputed for sourcing the highest quality of C. arabica on the planet.
Tepi Coffee Plantation has a collection of awards including Rain Forest Alliance, Bird Friendly Certificate, Cafe Practice Certificate and Organic Coffee Certificate, in recognition of its environmental concern and commitment to produce coffee sustainably.
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