23 December 2012

Ethiopia: Govt Grants Land for New Industrial Zones

The Ministry of Industry (MoI) has made 10 plots available for eight local and foreign manufacturing companies, who have requested land for the building of industrial zones.

These plots are part of the 13, in total, that Addis Abeba's City Administration has reclaimed from developers, in July 2012, who were reportedly failing to use them adequately.

Each plot covers an area of around 2,800sqm, and all are located in Akaki Kality and Mekanisa Lebu districts. The companies selected for the plots, on a lease, are involved in the garment, shoes, agro-processing and metal manufacturing sectors; industries the government is considering as a priority. Half are engaged in the garment sector, three in shoe manufacturing, one in agro processing and one in the metal industry.

Four of the plots have been designated to four local companies; Son Mool, Aziza, Mimon and Pissel garment factories, four to Kingson Leather Shoes Company, another local firm, and two to foreign shoe factories, the Turkish, Global Leather, and the Indian, Pior Loti Shoes. Of this, Global Leather has been awarded a total of two plots.

The local based, Eliana Coffee, from the agro-processing sector, and EFESOL Technology, from the metal sector, were also granted one plot each.

These companies were selected from a total of 69 local and international companies that submitted business proposals, in response to the Ministry's call for bids. A total of 259 companies had initially shown interest.

It is only the eight companies, however, who have managed to pass the technical evaluation of the Ministry. A committee composed of experts from the Ministry, Textile Industry Development Institute (TIDI), Ethiopian Leather Industry Development (LIDI), and chaired by Hagos Kiros, director of industrial zones, conducted the evaluations. Factors included; experience of the companies, financial capability, the type of machineries used and business proposals. Companies with a desire to invest in the priority sectors and export their products were also preferred.

Some of the bidders were disappointed to see the Ministry granting three less plots than it had originally offered. The mishap came after the committee carried out assessment, in July, for three plots mistakenly reclaimed from developers.

Nonetheless, senior officials at the Ministry reassured such companies that they will be given plots in Oromia Special Zone, as the committee has undertaken assessment of industrial zones designated there, according to a committee member, who spoke to Fortune anonymously, for he was not authorized to speak to the media.

The Oromia Regional State comprises of two industrial zones, including the Eastern Industrial Zones, which Chinese companies developed near the town of Dukem, 34Km south east of Addis. The federal government is keen to develop additional industrial economic zones in Addis Abeba, Dire Dawa and Kombolcha towns also.

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