Great Value Energy Plc, a local recycling factory gains 27 million euro in loans for an expansion aimed to fulfill local demand and increase its export.
Great Value Energy Plc which has an extensive portfolio in; real estate, construction / construction project management, hotel complexes / resorts, food trade, agriculture, pharmaceutical industry, mining / raw materials, and a plastic recycling factory, through its management team stated that, “We will receive the 27 million euro loan and the value is ready on the account to be paid. Moreover, according to our agreements, the security deposit will have a maturity date of up to 5 years.”
Located in Sendafa, Oromia region, the company is producing 2,600 tons of household items per year from recycled plastics at the moment and will reach around 35,000 tons with the expansion by opening additional three recycling factories.
To help its expansion, the company has chosen European suppliers for the technologies, equipment and know-how for the supply, delivery, commissioning and training best quality in manufacturing improvement and business expansion.
“We are increasing our product range and our annual production capacity up to 35,000 tons. We are improving our product quality with European technology and adding amongst others, strategically important products, such as system relevant recycled raw materials, that are highly demanded in Europe and worldwide. In regards to our factory ́s expansion we signed the necessary foundational commitments,” said the management team.
As indicated by the management, currently the factory is awaiting a guarantee from the local commercial banks. “On our discussion, we have got positive answers from commercial banks through they have to get approval from the national bank, to which we also expect a positive feedback,” said the management.
As the management explains the buyers from Europe (Germany) have shown interest to buy the firm’s annual production contingents for three years with rolls on extension and are paying with regular payment terms.
“We are absolutely confident that our expansion plan will strengthen the economic environment, the foreign currency reserve as well as the people and the government of Ethiopia,” said the company in its statement sent to Capital.
At the same time it will effectively support solving a global plastic waste problem, in addition to improving plastic waste management in Ethiopia.
Local recycling firm gets 27M euro injection
Berbera port shares offer swept off without gov’t notice
Gov’t to investigate the matter
Ethiopia losses its opportunity to the ownership of 19 percent of Berbera Port as the government failed to fulfill certain conditions according to Dr. Saad Ali Shire, Ministry of Finance of the Republic of Somaliland. Ethiopian officials however said that there is no binding agreement to enforce this.
In 2016 after years of serious negotiations, Ethiopia had concluded an agreement with the Somaliland Ports Authority and DP World, which would see the government of Ethiopia getting 19% stake in joint ventures to develop the Port of Berbera; in addition to helping the country get additional logistical gateways for increasing its import and export trade.
“We agreed in a meeting back in 2016 to offer a 19% share to the Ethiopian government under certain conditions,” said Dr. Saad Ali Shire, Ministry of Finance of the Republic of Somaliland, adding, “There was a stop date for the Ethiopians to act, but they didn’t act so it expired.”
In 2016/17 it was reported that DP World held a 51 percent stake in the project, Somaliland 30 percent and Ethiopia the remaining 19 percent. The government of Ethiopia was also expected to invest in infrastructure to develop the Berbera Corridor as a trade gateway for the inland country.
As the minister indicated, one of the conditions was for Ethiopia to contribute financially to the construction of the port but it didn’t take up that option, “The port was financed entirely by DP world and now it’s ready.”
Officials from the Ethiopian government who chose to stay anonymous said that even if the three parties agreed on the ownership, there wasn’t any legal binding document signed by the parties, yet it included financial contribution to the construction.
“Even though Ethiopia lost its ownership, the government of Somaliland didn’t officially inform the government,” said the official.
Currently, DP World owns 65 percent of the port, while the remaining is owned by the government of Somaliland.
According to Dina Mufti, spokesperson of Ministry of Foreign Affairs on his weekly press briefing explained that the government still didn’t have any information but has started its investigation.
“Any changes in the concession with regard to giving shares to other parties would have to go through parliament. It’s not an executive issue; it is a legislative one,” said Somaliland’s Finance Minister in an interview with Capital.
“I believe that the important thing is not so much the ownership, but the efficiency which is very important because we would like Berbera to offer the most efficient service in the horn of Africa. So our aim is really to provide an efficient service, it doesn’t matter who owns it,” the Finance Minister added.
Currently, Ethiopia is mainly using ports in Djibouti, while Berbera has served as a way to import aid cargos in the past years.
As Said Hassan, General Manager of Somaliland Port Authority said, the two countries are in discussions to unlock transport of commercial good, “As part of the discussion to complete the transit agreement officials of the Ministry of Transport of Ethiopia will arrive at Berbera at the end of the coming week,” said Said, expressing his hope that it would come to fruition this year.
DP World agreed with the government of Somaliland to invest USD 442 million for the expansion of the old port and development of other facilities.
Presently, the first phase of the expansion project has been completed with operations starting last year July which resulted in the upward capacity from 100,000 TEU to half a million. “So far, DP world has spent approximately 214 million US dollars. We committed to invest up to 442 million US dollars and when we took over the port on March 2017. Following the takeover, we started the expansion project in October 2018,” said Supanchia Wattanaveerachai, CEO of DP world Berbera.
The company is also working to establish an economic free zone to complement the development of the Port of Berbera. As the CEO indicated, the first phase construction of the special zone is expected to be completed at the end of the year.
“The special economic zone is a combination of the increased Berbera port development and will support Somaliland and Ethiopia as it seeks to bolster the export competitiveness of the country,” said Somaliland’s Finance minister.
Somaliland was granted independence on June 26, 1960 from the British colony and immediately recognized by the UN. It then unified with Italy Somaliland, who got independence on July 1, 1960, and formed the then Republic of Somalia.
Berbera port is probably the best location for the eastern part of Ethiopia. The berbera corridor road upgraded project and the Hargeisa Bypass road Corridor will link to the existing modern highway on the Ethiopian side of Somaliland and position Berbera as a direct fast and efficient trade route for Ethiopia, which present an array of benefits to this regard.
The Dubai Company that has been operating a port in Djibouti has agreed with the self-proclaimed Somaliland from Somalia to manage the operation of Berbera Port, one of the oldest ports in the region.
Mega twin towers for Addis
Quara Manufacturing plc and the Chinese construction giant CCECC strike a deal to construct a mega twin tower turnkey project at the cost of over 13 billion birr in the heart of Addis Ababa.
Quara a sister company of Gomeju Oil Ethiopia disclosed that the two buildings will have the company headquarter, business and offices hubs with luxury residential facility.
Tewodros Yeshiwas, CEO of Quara Manufacturing plc, reminded that his company has been tirelessly working to select the best and reliable construction company for the very unique mega project, “I am confident that the project will be concluded as per the timeframe and expected high quality.”
Wubishet Jekale, prominent construction sector expert and Managing Director of Jekale CM Consultancy, said that the local company had conducted a restricted tender for shortlisted well known Chinese construction firms to select the best one, “CCECC took the opportunity in April last year and submitted the accepted conceptual design on June 4, 2021. Since then finalizing the preliminary design and further detail works have been carried out and the company submitted the final offer in April and now sealed the deal with official agreement.”
The two companies have signed the project award agreement on Friday June 10 at the HQ of CCECC Ethiopia Construction plc and the ground work will be embarked in six months’ time at Kazanchis area.
“Some of the unique features of the project is that the site location is surrounded by three main streets, the design concept is the ‘waterfall’,” Wubishet, who is also a Professor at Addis Ababa University and a consultant of Quara, explained at the signing ceremony.
He added that the building has two towers, G+44 with 219 meter high office building and G+30 with 101 meter high apartments and 26 elevators, “it is expected to be one of the tallest buildings in East Africa.”
As per the planned design, Quara’s future building will take over from the Commercial Bank Ethiopia HQ, which is 109 meters. The facility will have also additional four storey basements for parking that means the biggest building would have in total 49 storeys.
“To keep the concept of greenery and environmental friendliness, the project has given ample space at the ground and the buildings that will cover with different plantations and outdoor spaces,” Wubishet explained.
“One of the best features of our future building is that it includes ultimate space utilization with 150,000 square meter floor area on 5,734 square meter plot of land,” he told media.
According to the plan, the project will consume six years and will also have another phase. The second phase will take on the plot of about 4,000 meter square.
Tewodros said that his companies would want to be a model and committed reputable company in Ethiopia to carry out similar projects and businesses.
Constructing such kind of sky rocket mega building by private company would be the first, while it has become common handling by huge financial institutions.
CCECC is a company that is of a familiar face to Ethiopia following its involvements in mega projects in Ethiopia including the railway and industrial parks.
Redesigning forex mechanisms signaled as crucial by new study
Despite the agriculture sector being the major source of hard currency it has benefited only two percent for capital goods import on the sector, new study reveals. The study as part of ticking the solution box to the hurdling issue, recommends the country to adopt a multiple exchange system.
Will Consult, a firm hired by the Addis Ababa Chamber of Commerce and Sectoral Association, to assess the ‘the problem and key issues of shortage of forex, and its impact on business’ disclosed that despite the regulatory body, National Bank of Ethiopia (NBE), issuing rules and directives to control the foreign currency allocation, the execution was not properly regulated.
The identification of the study that was presented by Yirga Tesfaye, General Manager of Will Consult and part of the study group, said that NBE does not have a capacity to govern the foreign currency allocation as per the directive it imposed.
The dis-link between Customs Commission and NBE is also stated as a factor for the gap to control the scheme.
From data derived from the questionnaire from staffs at NBE and commercial banks, both interviewees believed that the foreign currency allocation directive is being properly implemented.
“NBE’s law enforcement operations are limited in terms of its expertise and infrastructure. Supervising bank businesses is getting beyond NBE’s capability, while forex allocated for priority items is used to import other profitable commodities. Nobody controls what is permitted and what is imported,” the presenter said.
He added that despite the number of exporters significantly increasing the volume, the value of export was stagnant, to which he argued that the regulatory body directives don’t encourage the export business.
There would be a mechanism to solve the drawback of the agriculture sector accessing the foreign currency properly since it is crucial to elevate the foreign currency shortage.
The whole economy should be cured to uplift the hard currency generation, Yirga said on his recommendation by adding, “Prevailing forex problems cannot be solved separately and immediately.” He expounded that giving priority for business and economic issues even before politics is a must to change the scenario, as he pushed for the improvement of peace and security, and encouraged a boost to the agriculture industry.
According to the study, the lion’s share of the hard currency allocation went to the import of industrial capital goods, and posed the question; where is the actual performance of the sector? Who consumed about one fourth of hard currency of the country?
“Increase capital investments, was identified as very low even on the flow of foreign direct investment, in to agriculture, agro-processing, import substitution and related value chains,” Yirga presented on his possible changes that the sector needs.
He added that ensure a significant share of profit from export of agriculture outputs was channeled back to the sector.
The study has also argued that the measure the government took to devaluate the currency on the aim to improve the export sector did not actually show change on the export sector and hard currency earnings.
“To improve the availability of foreign currency, the redesign of the system is a must,” he explicitly said.
Manage the demand and increase the supply of hard currency is recommended, so in the short term categorize the priorities of imports is supposed to be applied.
Redesign the mechanism of forex surrender retention and utilization role is also recommended, “We are recommending a multiple terms of exchange system for certain period of time like five years as a transition into a fixable or floating system.”
In the long term the country should utilize its comparative advantages and develop a few selected strategies, “develop global competitiveness of selected sector in terms of scale, efficiency and quality.”
As parts of the long term strategies, improving the capacity of NBE has been recommended and liberalizes the forex market has been also recommended with transitional process.
