Turkish General Group Beverages (GGB) launched an investment of 180 million birr in Ethiopia for its new water bottling plant around Chahca Town, 110km from Addis Ababa, near Debre Berhan. The new water, Named Avante, joins the competitive mineral water market. They say there are two distinctions that add value to their water, according to the General Manager of the GGB Bulent Durmaz. The packaging bottle is thicker and uses 50 percent less plastic than the average bottle in Ethiopia. The thickness meets European standards and the company offers different liter options, including the 19-liter non-refillable use and throw bottle.
They employ about 78 permanent employees. The factory produces 30,000 liters of water per hour and sits on 4,700sqm of land.
“We will collect, recycle and export the plastic bottles but we also want to minimize the plastic we are discharging in the first place,” he said. “The recycling business is not a profitable one but it will solve the critical foreign exchange problem for us to import new packaging and also we will substitute imports for the country.”
The Total Dissolved Solids (TDS) level is said to be according to the WHO standard, more than 100m is also another unique feature that the company is providing. The water is high in basalt from a spring surrounding Chacha. The company doesn’t add or take out any minerals or any minerals out of the natural spring.
The group stated that no loans were taken for the investment and they believe the Ethiopian market is attractive. The General Manager also says they will re-invest the money they generate afterward in other companies, like beer, spirits, and wine.
Avante water offers bottles with half the plastic
VAT refund turnaround time reduced, taxpaying simplified in new policy
The Ministry of Revenue (MoR), which has been undergoing extensive reform, has changed its policy to be more in line with the recommendations from international organizations, in hopes of expanding tax collection and improving the business climate.
Early this week the ministry amended or compiled eight different directives (from 142 to 149). One involves the Value Added Tax (vat) refund.
According to Abere Abebe, Team Leader on Drafting and Consulting of Laws at MoR, most of the directives were re-amended in consideration of the Income Tax Proclamation that was amended in 2016 and the Tax Administration Proclamation.
“The main motive of the amendments is to make them easier for the tax payers to understand,” Abere told Capital.
The directive that is getting the most attention is the Vat refund which was amended with the goal of accelerating business activity and the tax refund directive to reduce the settlement period, Abere said.
“For instance it used to take five months to get the vat refund on capital goods expenditures but now we can settle it within a month, while the refunds that were settled within two months have gone down to 45 days,” Abere said.
The name of the directive was changed from ‘vat refund directive’ to ‘risk based refund directive’, showing that the new priority is reducing risk and using a better assessment methodology, according to the legal expert at MoR.
“The new directive has classified the risk in to three stages the lower and medium risk stages will get their refund without a comprehensive audit. Previously, even low risk refunds had to be comprehensively audited,” Abere added. High risk refund claims will be settled after a comprehensive audit but concluded with the required period.
He argues that the current directive is pro tax payer and that it will improve local or FDI investments because the vat will take less time to refund.
Befirdu Messeret, Tax Payers Education Director at MoR, told Capital the motive of the new amendments is to make doing business and paying taxes easier.
“The vat refund and other directives that are being compiled or amended should improve the MoR operation and enhance tax collection, which is also recommended by different international partners,” Befirdu said.
“Two of the 11 criteria in the World Bank report on making business easier, focuses on paying taxes and trading across borders. This is directly related with the tax ministry, and vat refunding and paying taxes must be easier,” he said.
The refund scheme has been considered as problematic that is now changed, according to the ministry tax payers’ education division head.
The tax collection in the country is very poor compared with the GDP ratio of regional and peer countries. Two years ago, the government improved the tax GDP ratio about 13 percent, then it declined to 11 percent last budget year. The government projects that the GDP tax ratio will stand at 17 percent by next budget year.
Currently MoR is undertaking several changes to improve its revenue besides modernizing the operation. A group of government leaders was formed under the chairmanship of PM Abiy Ahmed (PhD) to improve the country’s doing business rank from the current status. The World Bank 2019 Ease of Doing Business put the country at 159 from 190 countries. Regional countries like Rwanda and Kenya stood at 29 and 61 respectively.
Ethiopia to host third edition of China Trade Week
The founder of the popular China Trade Week, MIE Groups will host the third edition at the Millennium Hall for three days starting May 2, in collaboration with the Ethiopian Prana Events. It is expected to attract over 100 investors and business from China with a sideline Business to Business dialogue and for the first time, a parallel conference on day one of the show.
The trade fair and B2B talks will feature business in light industry and textiles, construction materials and machines, food and beverages, home appliances and furniture, lighting, and energy sectors.
Currently, over 400 Chinese investments valued at over USD four billion are active in Ethiopia, creating more than 100,000 jobs. In exchange, Ethiopia, during the 2017-2018 fiscal year, has already exported goods worth about 245 million USD to China, according to data from the Ethiopian Ministry of Trade and Industry.
“We look forward to welcoming thousands of professionals to this year’s CTW Ethiopia, on 2-4 May, at Addis Ababa, at a time when the country is going through significant positive economic and regional changes,” said Zahoor Ahmed, Director International Events, MIE Groups.
The Ethiopian Chamber of Commerce & Sectorial Associations Secretary General, Africa Zeleke stressed that these opportunities will be useful to attract investors to Ethiopia while promoting Ethiopian goods to the companies that import from here. “The chamber decided to partner with this trade fare as China remains the biggest market for many Ethiopian goods exported. This includes, 70 percent of our sesame. Also, the majority of our goods are imported from China and we want to narrow the gap of the trade imbalance by attracting FDI and helping technology transfer for our business.”
The managing director of Prana Events, Nebyou Lemma told journalists that the trade fair is expected to bring more investors to open manufacturing in Ethiopia, and mentioned the success of the previous two trade fairs.
European industrial giant Siemens to join Ethiopia
Siemens and the Ethiopian Investment Commission (EIC) signed a Memorandum of Understanding (MOU) to support the government’s objective of becoming a low middle-income country by 2025.
Abebe Abebayehu, who leads EIC, and Sabine Dall’Omo signed the Memorandum of Understanding.
They plan to work together by sharing technology and knowledge primarily in distributing power.
Ethiopia generates a significant amount of clean energy but because of distribution problems utilization remains low.
“The company is building a power transfer line to Kenya from here and we agree to work on transferring knowledge to Ethiopian youth,” said Abebe Abebayehu. “The agreement also covers health equipment manufacturing which helps support the government’s objective of becoming a low middle-income country by 2025.”
In Ethiopia there are high power generation initiatives but the main problem remains with the distribution. The affordable power supply from the government doesn’t support the economy much as distribution is poor. The company will also supply medical equipment.
In another deal, the Siemens AG President and CEO Joe Kaeser granted establishment of a SIMATIC S7 Tech Center here in Ethiopia. The agreement will enable the Training and Skills Center to train entrepreneurs in industrial automations, so people can create their own automated industries, said Getahun Mekuria, Minister of Innovation and Technology.
Ethiopia’s Growth and Transformation Plan serves as a catalyst towards realizing its national vision of accelerated and sustained economic growth in order to eradicate poverty and increase prosperity. “Siemens can make a significant contribution to Ethiopia’s development. We will apply our vast experience and proven technologies as well as training and education capabilities to help shape the future of Ethiopia and its people. One of the starting projects affirming our strong commitment in the region is the East Africa Interconnector,” said Joe Kaeser.
Siemens is currently helping to increase the reliability of energy supply through an interconnector being built between Kenya and Ethiopia. The roughly 1,000 kilometres-long transmission line will transmit environmentally friendly hydroelectricity from Ethiopia to Kenya. The project currently supports 200 direct jobs in Ethiopia alone and is one of the largest infrastructure projects in Africa.
