Ethiopia’s financial giant, the Commercial Bank of Ethiopia, had earned 7.9 billion birr, a record high gross profit in the just concluded Ethiopian 2011/12 budget year, over 4.2 billion birr more than last year.
Despite tough measures imposed on the lending capacity of private banks by the National Bank of Ethiopia (NBE), fourteen private banks currently operating in the country had amassed more than 3.5 billion birr gross profit. Dashen Bank took the lead by pocketing more than 880 million birr gross profit.
Hard Currency Shortage
Almost a year after Ethiopia claimed that an excess of foreign reserve was the reason for galloping inflation, the country faced a shortage of hard currency once again. This recent development is the first of such an occurrence in four years after the country suffered from hard currency shortage in last quarter of 2008.
Defunct bank dispute settled by court
The long legal saga of the defunct Horn International Bank seems over after a November 16 verdict by the Federal High Court’s ninth civil bench in their case against the National Bank of Ethiopia.
One of the first private banks in Ethiopia whose majority shareholders were Eritrean nationals was dissolved around the time the Ethio-Eritrea war erupted in May 1998. The National Bank of Ethiopia, which sets policy for all banks, ordered its assets to be liquidated.
The long court saga of Leikun Berhanu, former President of Awash International Bank (AIB), and his former advisor, Mitiku Abeshu, has finally come to an end after the Federal Supreme Court Cassation Bench ruled against their appeal reaffirming a lower court’s verdict on charges that found them guilty of abusing the bank’s foreign currency reserve in early July, 2012. They are to serve each one year and three months.
Tsehay Insurance Share Company, the newest entrant to the insurance market has formally launched its operations at a ceremony held in June. Tsehay Insurance which began operations when its first branch opened in mid May, had three branches located in Haya Hulet, Abune Petros and the bustling market area of Addis Ababa, Merkato as of mid June.
Oromia Insurance Company (OIC), one of the youngest financial institutions, launched a new micro-insurance product for pastoralists late last Ethiopian fiscal year.
A Turkish Textile company has received a huge loan from the Development Bank of Ethiopia (DBE). Sahinler Ethiopia Textile Investment Private Limited Company received 618 million birr to produce clothing, knitted items and other textiles in Adama, 99Km south east of Addis Ababa.
In February, DBE had provided one of its largest loans; 1.42 billion birr to another Turkish company, Saygin B.M. Technology Group LLC, for the construction of a cable manufacturing plant on 15hct of land outside Sebeta town, 24Km west of Addis Ababa in Oromia special zone.
The Leather Industry Development Institution (LIDI) has changed plans to import raw leather, opting instead to import semi-processed leather products. Italian, Indian, Chinese, German and British companies began operating nine leather product investments and three finished leather investments. The 2.5 billion birr projects will be able to produce around 27,000 pieces of finished leather, 16,000 pairs of shoes and 2,000 garments when it becomes fully operational.
Meat export and slaughterhouse
A goat supply shortage has led to dramatic price hikes for meat export. An illegal goat market along the border regions is one major reason given for reduced goat supply in the city, although the Ethiopian Meat Exporters Association said there are more reasons than that. Goat meat price has risen from 300 birr for 20Kg to 600 birr. Tasked with earning one billion dollars from meat exports by the end of the Growth and Transformation Plan (GTP), the Ethiopian Meat and Dairy Technology Institute (MEDTI) is setting its sights on China.
Elfora Agro-industry inaugurated a modern export slaughterhouse in Metehara, 200Km south east of Addis Ababa in the Oromiya Regional State. Elfora Agro-industry, part of the Midroc Ethiopia Technology group of companies, constructed the modern meat export facility at a cost of more than 15 million birr. The new slaughter house increased the number of slaughter houses owned by the company to six.
Mesfin Industrial Engineering Plc. introduced the assembly of three models of GEELY cars last year. The company planned to assemble the SL 1500cc model starting in June 2012 followed by the EC 1500cc and the 1300cc hunchback.
The Chinese car assembler, Lifan Motors, had made public its seventh model in Ethiopia, SUV X-60, at the newly built Conference Center of the African Union in May.
Cement Price decreases
The factory price of cement saw a significant plunge when the mega Derba MIDROC Cement factory began selling cement for less than 200 birr per quintal. The state-of-the-art cement factory has a capacity to produce 8,000tns of cement per day which translates to over 2.5 million tons per annum.
Though it was originally planned as a USD 351 million project, it has now consumed close to 600 million dollars after creating three more companies under its umbrella: Maya PP Bag Factory, Derba Lime and Chemical factory and Derba Transport. The project secured, all in all, USD 200 million out of which, USD 55 million is from the African Development Bank, USD 45 million from the European Investment Bank, USD 55 million from the International Financial Cooperation and USD 45 million from the Development Bank of Ethiopia. The Ethio-Saudi billionaire, Sheik Mohammed Hussien Ali al-Amoudi, owner of Midroc Plc and several other companies, contributed USD 151 million.
Moha Soft Drinks Industries Sh. Co. added a new production line to its Summit factory which boosted its capacity to four million cases per annum from 1.5 million cases earlier at a cost of 230 million birr.
Coca Cola announced that it will come out in plastic bottles at the end of last Ethiopian year. Bottling the product in plastic costs the bottling company over USD 50 million. Moha is also planning to invest USD 300 million in the country during the next five years.
Dalol Oil Share Company formally launched operations with its sixth fuel station in Suluta town, 25Km northwest of Addis Ababa in Oromia special zone. The new fuel stations situated on 3,500sqm is a joint investment of the company and a local investor. It will cost close to four million birr.
National Oil Ethiopia Plc (NOC), a company engaged in the retail of petroleum and related products, is in the final stages of branching to two of Ethiopia’s immediate neighbouring countries; Djibouti and South Sudan. NOC has also inaugurated the third ethanol and regular Benzene blending facility in the country at a cost of 45 million birr in Dukem Town of the Oromiya Special Zone, some 37Km to the south east of Addis Ababa.
Total Ethiopia, one of the oldest stakeholders in the fuel industry of Ethiopia, had showcased three types of solar lamps. The lamps have the capacity to light up the dark from eight to 100 hours non-stop.
The third quarter of 2012 has seen Ethiopia’s first well drilled by London based Tullow Oil after two previous wells were drilled in Kenya. The company’s exploration area is the South Omo block, in the south western part of the country in the Great Rift Valley.
Anbessa Bus granted the rights to supply fuel and related service for two years to the new kid in the block of Ethiopian oil retail business, Taf Oil. Taf Oil is supplying 26 million litres of diesel oil and 500 thousand litres of lubricants and greases at a cost 484 million birr.
Foreign Direct Investment (FDI) to Ethiopia plunged by USD 82 million to reach a disappointing USD 206 million, according to a World Investment Report released late last budget year by the United Nations Conference on Trade and Development (UNCTAD).
Radisson Blu, a subsidiary of Rezidor Hotel Group, built at a cost of about half a billion birr opened its doors last Ethiopian year. The nine storey hotel is located in Kazanchis, close to the Economic Commission for Africa (ECA) and the National Palace. It has 204 bedrooms including 44 business classes, 16 luxury suites and one presidential suite.
Sunshine Business Plc, a wing of Sunshine Construction, will be the fourth company to open an international chain hotel. The company signed a management contract deal with Marriott International for two hotels that it will open in late 2012 and 2015 respectively.
Ghion Hotels Enterprise
After a year of waiting, the Privatization and Public Enterprises Supervisory Agency (PPESA) is moving on and inviting interested parties to jointly invest in the Ghion Hotel. A September 2010 deal with Aklile Berhan Mekonnen, who calls himself Prince, an Ethiopian born Italian based investor and PPESA was terminated when he allegedly failed to make good on a promised deposit within six months.
Meanwhile the enterprise was yet again offered for another round of appeal for interested buyers, this time for a full acquisition in late July 2012. Surprisingly no potential buyer came forward with an offer.
The state owned Ethiopian Metal and Engineering Corporation (MetEC) signed a 792 million birr civil construction deal with Teklebirhan Ambaye Construction PLC for Yayu Fertilizer Factory.