Public enterprises up for joint ventures

By Eskinder Michael

The Privatization and Public Enterprises Supervision Agency (PPESA) has floated a tender, looking for strategic partners, both local and international for 14 public enterprises engaged in various sectors.

PPESA, the government body that is responsible for privatizing, supervising, guiding, supporting and controlling public enterprises, also has the authority to look for partners for public enterprises to help them build their capacity.

The supervising agency however, has floated this tender looking for companies with strong financial background and experience, and most of all, access to global market, a way to introducing Ethiopian products to the world.

PPESA plans to find strategic both local or international partners in the agricultural sector for Palm Oil Project Development Enterprise, Semien Omo Agricultural Development, Upper Awash Agro Industry Enterprise, Middle Awash Agricultural Development, and Coffee Plantation Development Enterprise; in the food sector, Kaliti Food Share Company and Dire Dawa Food Complex and in the construction sector for Tabor Ceramics. PPESA is looking for local partners in the transport sector for Shebele Transport and Walia Inter City Bus Transport Enterprise; while in the chemical sector for Awash Melkassa Aluminum Sulfate and Sulfuric Acid Share Company, Adami Tulu Pesticide Processing Share Company, and Caustic Soda Share Company, international partners like in the other sectors are welcome. In the beverage sector Ambo Mineral Water Company is on the list.

Joint ventures will be based on what the buyers want and afford, with the maximum percentage ration being 51% to 49% in favor of the public enterprises. PPESA expects companies to present their Business Plans before the end of December, 2006.

Last fiscal year, PPESA privatized 15 public enterprises and share companies for 63,730,018 million birr according to a document released by the Agency. The agency had at the beginning of the last fiscal year put up close to 30 enterprises and share companies for tender, but managed to privatize just half of the original number.

Among the enterprises privatized in the last fiscal year are Kombolcha Tannery Share Company, Gulele Garment Share Company, Modjo Tannery Share Company, Meher Fiber Products factory, Kuriftu Ranch , Ethiopia -Gambella Hotel, Quara Ghion Hotel, Senkelle Lime factory, Kotebe Metal factory, Akaki Garment Share Company, Addis Garment Share Company and Addis Caramel factory.

Modjo Tannery was sold for 28 million birr to Hadji Bedada Chala, owner of Dire Electronics and Tannery. There are currently 14 tanneries in operation in Ethiopia, namely Addis, Kombolcha and Modjo tanneries already privatized, Bale, Blue Nile, Awash, ELICO-EPTF, Ethiopia, Hora, Merssa Shoa and Walia tanneries and a further six that are under development.

The agency has been using new strategies such as bidding, renting, contract management and joint venture with other private enterprises and as such, the Awassa, Arbaminch and Bahirdar Textile Share Companies have been rented out to Chinese and Turkish companies.