Lifan Motors Plc signed an agreement with the Chinese-leased Eastern Industry Zone (EIZ) to relocate its plant to the area. The company will raise its production capacity to 5,000 vehicles a year, a five-fold increase, after the installation of new machines in six months’ time at the new factory.
About eight months ago, Lifan revealed its USD 5 million expansion plan to refit the plant with advanced technologies. This expansion, which was intended to increase its production capacity, to enhance its sales and after sales services, increase the availability of spare-parts, includes the relocation of its factory to Eastern Industry Zone (EIZ), around Gellan, on the eastern outskirts of Addis Ababa. Lifan has already ordered the machinery and will start installation as soon as it arrives to start production after six months on the new 20,000 sqm site. Lifan first planned to relocate the plant in January 2013. However, the agreement with EIZ was delayed for about five months, said Daniel Tamirat, Promotion Manager at Lifan. The factory is currently located in the Kaliti District on an 8,464 sqm piece of rented land.
Lifan and EIZ signed a USD 4.8 million agreement for the relocation. At the signing ceremony held at the Zone on Thursday, Liu Jiang, General Manager of Lifan, said that so far, the company has invested USD 4.2 million for the move along with the equipment on order. “This investment will enable us to transfer from Semi Knocking Down (importing parts and assembling a vehicle) to Complete Knocking Down (producing all the parts locally and assembling the vehicle) in the short term,” Liu said. According to him, Lifan’s annual production capacity will increase from the current 1,000 vehicles to 5,000. It is also preparing to introduce new models into the market which have better quality and a quicker delivery time. For Liu, this investment will contribute to the transformation of the automotive industry in terms of advanced technology and professionally trained staff, as well as generating increased revenue for the government, in addition to creating job opportunities. The General Manager said that the company has sold close to 3,000 vehicles over the past four years.
It has opened three branches in Mekelle, Hawassa and Dire Dawa to provide complete sales and after sales services to its customers. “This investment will pave the way for the future of Lifan which is committed to make Ethiopia its Eastern Africa manufacturing and distribution hub.”
At the signing ceremony, Qian Guojing, Deputy General Manager of EIZ, said the Zone is bringing millions of foreign currency earnings and billions in income for the government, raising the value of the surrounding area, aiding in fast economic development of the country and deepening the friendship and ties between the two countries.
“It will provide good support, good service and good assistance to Lifan,” he said.
The total area covered by the Zone is 5 square kilometers and divided into two. The construction of the first part (3 square kilometers) has been completed under phase one, while the second part (2 square kilometers) is under construction under phase two.
The overall development plan of the Eastern Industrial Zone strives to gradually become a functional area of integrated industry, commerce, residence and entertainment. The total infrastructure investment is USD 450 million; the first phase costs USD 270 million and the rest, USD 180 million, is slated for the second phase.