The window of opportunity for local investors to go into the agro-processing sector is now, said State Minister of Industry Mebrahtu Meles (Phd).
Speaking at a discussion session mainly organized by Ethiopian Airlines and the Ministry of industry where stakeholders held talks on the importance of import substitution production, the State Minister underlined that since Ethiopia is in the process of becoming a member of the World Trade Organization and will go on to have an open economy, local investors need to take the opportunity before the sector is taken over by foreign investment.
“Real transformation comes from integrating the agricultural sector with the industrial sector. Local investors need to build their competitiveness very quickly to be able to take advantage countries who are part of trading organizations such as WTO and the COMESA. If local producers are not strong enough, they will lose the market,” Mebrahtu said. This, he further added will hurt the development and growth of the country.
The construction of integrated agro-industrial parks is set to commence soon. The parks will be constructed in the Oromia, Amhara, Tigray and SNNP Regions of the country; construction has commenced on the agro-industrial park in the Amhara Region while the rest will follow during the next month.
“Registration of investors who are interested in participating in this will begin next month and we expect many of them to participate; from farmers to small and medium enterprises,” he said. The parks are expected to welcome the companies by September,” the state minister added.
During the discussions, Ethiopian airlines catering service wing also stated that it wants to source the majority of its inputs for its catering service from local producers. Currently, the airline only sources 10 percent of input for its catering from local producers.
Currently the Ethiopian in-flight catering service produces 35,000 meals a day serving all departing Ethiopian flights as well as Turkish Airlines flights. Its yearly importation cost has reached USD 100 million. The airline imports 90 percent from outside and now is hoping to change that and source 80 percent from local producers.
In the country, every year USD 5 million worth of meat products are imported into the country while Ethiopia has the largest livestock in Africa. These contradictions are also seen in many agro products that are imported into the country.
Participants of the discussion which included producers of different food and beverage products pointed out that while there is a strong interest for them to take advantage of the market that is available with Ethiopian Airlines as, among others, there are still different challenges that they face to do so including shortage of electricity resulting in the inability to produce at full capacity as well as challenges with taxation and customs when it comes to importing important machines.