1 June 2019

Ethiopia: Huajian Takes Over Jimma Industry Park

opinion

Agrees to install coffee processing plant, TVET center

The Chinese shoemaker Huajian Group has taken over the management and operational activities of the USD 61 million Jimma Industry Park.

During the signing of the Memorandum of Understanding (MoU) on Thursday, between the Huajian Group and the Industrial Parks Development Corporation (IDPC), Girma Amente (PhD) vice president of the Oromia Regional State told reporters that a relatively well-established Huajian in Ethiopia is likely to succeed in its acquisition of Jimma Industrial Park's undeveloped part that encompasses a plot of some 40 hectares.

The vice president told The Reporter that Jimma is home to, and one of the major sources of coffee. Hence, the processing plant under consideration will not be facing supply shortages of grain coffee.

Zhang Huarong, president of Huajian Group also said that, after an intense negotiation with IDPC and Ethiopian Investment Commission (EIC), a deal to take over the full management and operations of Jimma Industry Park and to set up footwear and a new coffee processing plant among others, was done. Zhang added that the agreement includes setting up a Technical and Vocational Education and Training (TVET) center. The Jimma Industry Park, according to the company's president, will consider construction materials, apparel and textiles and the like, that the local market demands. The phase by phase development and operation will seek foreign investors mostly from China anchored by Huajian Group.

The first phase of the operation will focus on running the already built nine manufacturing sheds inaugurated back in November. Within one year, the first phase of investment and manufacturing activities are expected to commence in full operation. Throughout the second phase, the coffee processing plant that adds value and perhaps roast and pack coffee, will be exported to China as the country has become entwined with the coffee culture in recent years. The president said that the processed coffee will entirely be export oriented.

Lelise Neme, CEO of IPDC said that Huajian has leased all the nine sheds and expected to create 12,000 to 15, ooo local jobs. The leased out Park remained vacant for more than half-a-year until Huajian came to its rescue, in which the government has invested USD 61 million for the construction and infrastructure development, a manufacturing plant would require. So far, 12 industrial parks have been built while seven have been finalized and readied for operations, Lelise added.

Abebe Abebayehu, commissioner of EIC told The Reporter that Huajian with its seven years of track record in Ethiopia will commence operations at the park, at most, in four months or so. Stretching on more than 30 hectares, the Park has a total footing on 75 hectares and Huajian is expected to plant coffee processing segment on 40 hectares.

Entering the Ethiopian manufacturing landscape in 2011, Huajian Group has been able to run two factories. One of them is built at the outskirts of Addis Ababa. Currently, the shoemaker is exporting to key US and European markets. It has been generating an average revenue of USD 30 million per year.

Huajian's own early estimates, however, indicated that in its first ten years of operations, it would land on USD four billion in its export earnings. Its investments would swell up to USD two billion in ten years. According to Zhang, the overall size of Huajian investment in its seven years of operations remains to be USD 100 million with 8,000 jobs created.

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