Capital Ethiopia Newspaper

Giant US agribusiness nabs state farm

The Privatization and Public Enterprises Supervising Agency (PPESA) has approved the privatization of Bilito Siraro farm to a US based company.
In the past week the agency has approved transferring the farm after it identified that Morrell Agro Industrial Company had another investment in the country.
The agency board had approved the transferring of seven enterprises including the sale of Bilito Siraro farm, which produces cereals under Awassa Agricultural Development Enterprise two weeks ago. But the board, chaired by Aster Mamo, Government Whip at the House of Peoples Representatives, with a ministerial portfolio, had decided to approve the farm transfer with a precondition: the American firm must have other investments in Ethiopia to acquire the state farm.
According to the agency’s regulation, foreign firms should have other investments in the country to benefit from a differed payment option, unless the company can pay the full amount to secure the deal.
Following the board’s decision, the agency experts verified that the US firm has other investments in the country.
The US Company introduced dry farming to Ethiopia about two years ago and has set up offices in the country that focus on agricultural work.
The US based farm Morrell Agro Industrial offered six million dollars (103.2 million birr) with a 50 percent upfront payment and the balance to be paid in three and half years.
Meanwhile, PPESA has also approved the transfer of five enterprises to Sheik Mohammed Al-Almoudi’s firms for the total amount of 1.3 billion birr.
The Ethiopian born Saudi business tycoon Al-Almoudi’s companies; Saudi Star, MIDROC and Horizon Plantation have collected four state agricultural industries and a mining enterprise. The enterprises are Upper Awash Agro Industry, Ethiopian Coffee Processing and Warehousing Enterprise, Abobo Agricultural Development Enterprise, Gojeb Agricultural Development Enterprise and the Ethiopian Marble Industry.
The board also gave a pre-condition concerning the privatization process of the Kality Metal Factory. At the bid that was opened six weeks ago, Tsehay Industrial Share Company offered 555.5 million birr to buy the metal factory with a 35 percent upfront payment and the rest to be paid in five years. But the board decided that Tsehay must provide assurance that the 65 percent balance payment will be paid on time. The agency is requiring the company to have additional investments in order to assure they will make good on their promise. So far the company has not responded.