18 May 2014

Ethiopia: MOI Partners Up With a Chinese Company to Establish an Industrial Zone

The Ministry of Industry and Zhejiang Jinda Flax Llc, a Chinese textile company, are going to establish an industrial zone designated for textile factories, around Bole Lemi area in the Bole District, according to the Memorandum of Understating (MoU) the Ministry of Industry (MoI) and the Chinese company signed on Tuesday, May 13, 2014.

The formal Investment Agreement is expected to be signed by the end of July 2014, when the land needed for the project is available. The two parties have agreed to work jointly for the establishment, development and construction of the coming Kingdom Linen Textile Industrial Zone in Ethiopia, a new company that will be established by the two parties for this purpose.

Zhejiang Jinda is a subsidiary of Chinese Kingdom Holdings Limited and produces textile decoration fabrics such as weave fabrics, yarn decorated fabrics and calico (not fully processed fabrics) printing fabrics which are widely applied to clothing sofas, curtains and bed appliances in its factory in China.

The MoI is expected to provide the Chinese company with the Red line and Coordinates Graph of the land and the soil analysis report of the future site of the industrial zone within two weeks after signing this MoU, according to the document.

Within two months after the signing of the Investment Agreement, Kingdom shall be granted all the necessary registration documents of the newly formed company in Ethiopia and the certificate of approval of investment of the project.

Before June 2015, the Chinese company will commence the construction of phase one of the industrial zone project. In addition, the Chinese company will train 50 Ethiopian recruits in industrial park production facilities.

For industrial purposes the Ministry has allocated a total of 5,130ha in four cities and towns across the country, including Addis Abeba, Dire Dawa, a self-administered city about 515km east of the capital; Kombolcha, 376km to the north of the capital in Amhara region; Shillabo, 1,140km from the capital in the Somali Regional State; Hawassa, 273km south of the capital in the Southern Region.

Eastern Industrial Zone in Dukem, 37km southeast of Addis Abeba on 200ha of land, is the only private operational zone that was implemented by Chinese investors. Eleven companies are already involved in the manufacture of leather and leather products, textile and garments and car assembly at this zone.

Bole Lemi is the only other functional industrial zone which was constructed by the government. It has five sheds which are constructed by the Ethiopian government, each on 5,500sqm of land with a total cost of 2.5 billion Br, and given to investors. The remaining 10 shades each on 11,000sqm are under construction financed by a loan, which the government has obtained from the World Bank (WB).

There are also projects of industrial zones in different levels of execution in Sendafa, Akaki Kaliti, Legetafo, and Mekanisa Lebu.

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