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Plant will be the second to make paper from start to finish in Ethiopia
A prominent businessperson, Haji Ture, working under the company Ture Buisness PLC (ITB) and their Chinese partner, entered into an agreement with the Chinese Eastern Industry Zone to construct a paper and packaging plant at a cost of 986.5 million birr. The announcement, concerning the nearly one billion birr investment, which is a record amount of money, was made during an event held on December 13, in the presence of Fitsum Arega, Commissioner of the Ethiopian Investment Commission.
Mahir Ismail, General Manager and one of the four Ethiopian shareholders in the new paper producing business called Purewood Pulp Paper and Packaging PLC, told Capital that the company will begin operating in November 2017.
He said that building the factory and installing the machines, which use Japanese technology, will be finished within one year. When it begins production, Purewood Pulp Paper and Packaging PLC will be the largest paper factory in the country.
Currently state owned Ethiopian Pulp and Paper SC is the only company that produces paper from start to finish. Other paper factories do not have the capacity to do this and are forced to use imported roll paper. Purewood Pulp Paper and Packaging PLC will become the second Ethiopian company to make paper without importing roll paper.
The Ethiopian paper market is almost fully dominated by imports. With the growth of manufacturing in Ethiopia, more paper is needed to package products.
According to information obtained from the Ethiopia Revenue and Customs Authority, in 2015 Ethiopia imported 70,000 tons of paper worth two billion birr. The nation’s paper demand is growing 10 percent every year.
Even though the sector is a priority, according to government policy, because it requires a large amount of money to invest, people have been reluctant to start this type of business.
“Our most important investment agenda is to supply the numerous carton, packaging and paper cutting factories in the country so they can substitute their imported rolls with better quality products at reduced costs,” Mahir explained.
“Before we invited our Chinese partner we studied the sector for two years,” the general manager added.
When it commences production the local factory will supply high quality packaging and other paper products to meet the nation’s growing demand.
It will also help to provide import substitution of roll paper for production of different types of paper and packaging products. The company hopes to export about 40 percent of its product to neighboring countries.
Purewood’s documents indicate that the factory will rest on over 60,000 square meters and will produce 10,000 tones of napkin/soft paper, 15,000 tones of kraft paper and 7,500 tones of carton board per annum. The project is fully financed by the company’s equity.
He said that Purewood will take advantage of the growing amount of sugarcane cultivation in the country and partially use the cane waste for thermal energy.
“We use their bagasse (sugar cane residue) for paper production,” he said. “Besides the bagasse we will use recycled papers and imported pulp as inputs for our production,” he explained.
The Haji Ture family: Ismail Ahmed, Omer Ismail, Mahir and Kalid Omer are the Ethiopian shareholders in the paper factory, while Neoglory Group, which owns 55 percent of the total share is a Chinese company.
ITB and Neoglory Group are jointly invested in Fang Zhou Industries PLC that produces the Nano Pen and is in the process of introducing other stationeries.
Ecotopia Recycling Industries PLC, a factory based in Gelan, which produces diesel /furnace oil, carbon black, steel wire and gas fuel by collecting and bringing waste tires and plastic from all over the country, is the other company that the two companies jointly formed at cost of 180 million birr.
Even though other Ethiopian investors have agreed to invest inside the Chinese industry zone located in Dukem, 30km east of Addis Ababa, none of them have begun production.
Eastern Industry Zone, the first such kind of facility in the country, has several other Chinese investments.
The establishment of industry zone and parks has become the major manufacturing industrial development strategy in the country.