Addis Fortune (Addis Ababa)

31 August 2014

Ethiopia: Indian Firm Finalising U.S. $9 Million Purchase of Modjo Abattoir

This is the Indian company's first investment in Ethiopia - Africa's leader in terms of livestock numbers

Allanasons Group - an Indian based meat processing plant - has been finalising a deal to purchase Akshakar Export Abattoir for a total cost of around nine million dollars.

The two companies have settled on the price and signed an agreement, which has to be authenticated by the Documents Authentication & Registration Office (DARO).

The process is being delayed due to a disagreement on whether the authentication of the agreement be held after performing audits on the status of Akshakar. This has, however, been solved through the intermediation from the officials of the Leather Industry Development Institute (LIDI). They have helped the parties to come to terms in order to go ahead with the registration and authentication of their deal by DARO, after auditing the financial status of the purchased abattoir.

Accordingly, auditors from the Ethiopian Revenue & Customs Authority (ERCA) are finalising the auditing process, the findings of which may result in modifications in the previously agreed price of the abattoir, said a source with the Dairy & Meat Development Instititute. Akshakar Abattoir rests on a total of 2.5ht in Modjo, 73mm south-east of Addis Abeba. It had asked for an additional 10ht, but was said to have been rejected

Allanasons secured 75ht of land, a year ago, from the Oromia Regional Government to erect a meat processing plant around the Adami Tulu area in Ziway town, 163kms from Addis Abeba. The Company is set to build its facility by investing 20 million dollars, with a production capacity of 70tn of meat products a day. This will include an abattoir that can handle 400 cattle and 5,000 sheep and goats a day, according to data obtained from the LIDI.

Upon completion, the plant will become Allanason's first investment in Africa. The Mumbai based producer claims to be India's largest exporter of processed food and commodities, as well as one of the leading meat processing industries worldwide, exporting meats to more than 70 countries, according to its website.

It commissioned the design of its meat processing plant to the Ethiopian ETG Designers & Consultants Plc in January 2014. The design has now been completed, while the construction work is soon to be commissioned to contractors, who are making a price adjustment. It has also effected an undisclosed amount of payment to the Ethiopian Electric Utility (EEU) for the supply of 250KVA electric power, necessary for the export abattoir it will operate.

It is also under process to secure additional land in the Somali and Oromia regions, and has submitted a request to construct another export abattoir around Borena in the Oromia region.

It is expected to finalise its construction process and begin production this fiscal year, according to information obtained from the Ministry of Industry (MoI).

Out of the 15,704tn of meat and dairy the country has planned to export for the 2013/14 fiscal year, the performance of the year stood at 34pc, earning the country 76.2 million dollars against its plan for 250 million dollars. This is from the exports made by the 13 export abattoirs, including Akshakar. Which is the sixth best performer in the export of meats and dairy. By exporting 815tn of milk it has earned 2.3 million dollars. However, compared to its plan for the year, its performance stood at 14pc, out of the 5,856tn in amount, and 7.3pc out of the 31.4 million dollars it had set to collect in the year.

Shortage of supply and reliable market access were among the reasons pinpointed by the MoI for its low performance in processing and exporting the by-products of slaughter houses.

Akshakar has the annual capacity to process 6,000tn of cattle meat and a similar amount of meat from sheep and goats. It also has the capacity to process 3710tn of slaughter houses by products, according to data obtained from the MoI.

Ethiopia's livestock population is estimated to be 49 million cattle, 25 million sheep and close to 22 million goats, making it first in Africa and 10th in the world.

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