Twelve manufacturers of electrical equipment have formed an association and registered with the Ministry of Industry.
The new Ethiopian Power Generation, Transmission & Distribution Equipment Manufacturers Association became operational on November 2, 2018, and formed a governing five member board, joining the ranks of 30 other professional associations in the country.
Formed with the technical assistance of the Ministry, the association, currently only represented by cable and transformer manufacturers, has set goals to help members specialize, utilize new technology, search for solutions to challenges in the industry, establish a training institute, conduct different studies and facilitate with the government.
Six member companies of the association - Advantage Industrial, Abay Energy, Elsewdy CablesEthiopia, BMT Energy Telecom Industry & Trade, Belayab Cables and Euro Cable - are cable manufacturers.
Six others - Adorn Transformer; Abay Transformer; Erkabna Transformer; Elolma Power Transformer Manufacturing; Adiss Transformer & Switchgear; and Power Engineering Industry, a subsidiary of the state conglomerate formerly called METec - are engaged in the manufacturing of transformers.
The establishment of the association will support the power generation industry in the country, according to Yohaness Dinqayehu, state minister for Metal and Chemical Sector at the Ministry of Industry.
The formation of the association will aid the government's mega projects, particularly in power supply, by bringing the many manufacturers together in one central place.
"By assisting local manufacturers, the country can save the expenditure of foreign currency that would otherwise be allocated to import these products," Yohaness told Fortune.
During the formation of the association, the founding members elected Wondosen Belay, CEO of Belayab Cable, as president; Dawit Belay, deputy manager of Advantage Industrial, as vice president; and Momona Hailemariam, general manager of Elolma Power Transformer, as secretary.
The association also created a cable manufacturing team and a transformer manufacturing team led by two team leaders selected from each team to oversee the association's work regarding each group.
Mohit Sarda, general manager of Abay Transformer, was appointed as team leader for the transformer manufacturing team; and Saad Ibrahim, general manager of Euro Cable, leads the cable manufacturing team.
The association will be funded through regular membership and by means of fund raisers held throughout the year.
"Working and organizing together is more desirable than doing it alone," Wondosen told Fortune.
The association will play a pivotal role in overcoming the challenges the Association members face - mainly procurement of raw material such as copper and steel, according to Dawit, vice president of the Association.
A legal expert commended the formation of the Association but warned that it should not lead to market monopolies.
"As a group, the companies can cooperate for a better outcome," Mesfin Tadesse, a principal attorney, said. "But the companies should refrain from any temptation involving price-gouging and price-fixing led by the Association."
Tegenghe Zergaw, a lecturer at Bahir Dar University with more than a decade of experience in business and corporate law, also believes the establishment of the Association is a positive impact for the improvement of the sector as well as the country.
Tegenghe stressed that the Association should avoid engaging in price fixing, reflecting a general concern about alleged monopoly practices by trade associations in the country. "So to eliminate such problem, the Trade Competition and Consumers' Protection Authority must monitor all the Association activities attentively."