Hawassa Industrial Park




Prime Minister Hailemariam Desalegn dubbed the Hawassa Industrial Park as “the defining instrument for achieving our industrialisation goals”. The federal government has earmarked close to 750 million dollars, obtained from the sales of Euro Bonds last year, to finance the industrial parks projects. Failed GTP I plan (GTP I) – the government was supposed to have completed five parks, of which it has managed to complete only one. Local construction companies have thus far failed to secure a turn-key industrial park construction contract.

December

Corporation Cancels Bid for Dire Dawa Industrial Park ­

The Industrial Parks Development Corporation (IPDC) has cancelled a highly anticipated but tightly fought bid for the design and construction of an industrial park in Dire Dawa. This came after two companies had made it to the financial evaluation stage. The five billion birr project was expected to be over in six months, and companies are to start without waiting for an advance payment. Re-tender is in the offing, as the bid document was unclear about the terms of the rejection.

January

As Dire Dawa Cancelled, Adama Bid Opens

Bidding for the construction of Adama’s Industrial Park closed after submissions of offers from three local and four international companies. Among the bidders were Tekleberhan Ambaye Construction (TACON), Zamra Construction and China Civil Engineering Construction Corporation (CCECC).

March

Almeda Textile Expansion Complete

The Almeda Textile Factory has finalised its 86 million Br expansion. The upgrade took place over the past six months and bids to increase its fabric production capacity by 100pc. The expansion is the first of three stages and focuses mainly on replacing machinery with the latest equipment. The company has imported Rieter brand C-70 carding machines, a New Draw Frame finishing machine and an Open End R-35, from Germany and Switzerland, as well as a Muratec winding machine from Japan. These are said to be easy to maintain, and demand fewer spare parts than the replaced machinery.

Adama Industrial Park MOU Signed

A tripartite Memorandum of Understanding (MOU) for the construction of the Adama Industrial Park was signed between the Ethiopian Investment Commission (EIC), Hunan Province Commerce Director and Chinese provincial companies on March 12, 2015. The Commission is negotiating with European firms for the additional construction. The first phase on 119ha of land will cost more than 300 million dollars and is expected to begin in two months.

Financing for the construction will be undertaken by the Government of China.

April

Local Manufacturing Companies Struggle

Securing leases at the Hawassa Industrial Park was smooth for foreign companies. Allocating the quota reserved for local manufacturers though was not an easy journey for the Industrial Parks Development Corporation. Nine local companies bought the tender documents, but none showed up on D-day.

May

Chinese Company Electric Deal

Ethiopian Electric Power have signed a 98-million-dollar contract with Chinese company, TBEA, to supply power for two industrial zones, as well as the related residential areas. The contract for the Akaki II-Koye Feche-Qilinto Bole-Lemi power transmission project consists of two categories – the substation and transmission lines.

Hawassa Industrial Park Sheds Get Two Local Offers

Despite the anticipation that several bidders would show up, only two did – Selina Trading Plc and Tewodros Shiferaw Textiles a member of Rosseta General Business. The two companies placed their respective offers for 5,500sqm factory sheds.

The government offered to provide loans of up to 75pc of the investment cost and up to 85pc of the cost to train employees overseas; in addition to waiving tax for 10 years to those companies fully exporting their products and slashing fees in opening letters of credit from a 3.5pc average down to 0.5pc.

Mega Agro-Processing Parks Launch

The launch for the execution of four mega agro-processing industrial parks was announced by Mebratu Meles (PhD), State Minister for Industry. The four agro-industries will be distributed in four regions – Amhara-Bure, Oromiya-Ziway, Tigray-Bahker and Southern Nations and Nationalities-Sidama. The cost of establishing these four specialised parks totals almost 900 million dollars, for this first phase, with another 13 planned.

June

Last Call for Local Manufacturers

Local investors, after a rigorous campaign and lavish government incentives package, have shown only a marginal interest in leasing sheds in industrial parks. Only seven percent of the total number of bid documents sold for four industrial parks were completed and returned.

Indian Company Sign Kombolcha Electric Deal

In a bid to connect Kombolcha Industrial Park with the national grid, Ethiopia Electric Power (EEP) have signed a three-billion-birr deal with an Indian company, TATA Projects Ltd, for the supply of a 382km transmission line.

Last Lap for July’s Inauguration of Hawassa Industrial Park

Local investors were caught off-guard by accommodative measures – some can meet new criteria, some cannot. The Industrial Parks Development Corporation cut the size of modalities for the entry of local investors in a bid to encourage their active participation.

July

Postponing D-Day

Hawassa Industrial Park’s inauguration was put on ice for 10 more days back in July. ­The date may have changed, but given the significance of the park in the wider scheme of things, optimism prevails.

Keeping the truck on the fastest lane

A total budget of 60 million Br has been set aside for the recruitment and training of HIP staff. The Southern Nations, Nationalities and Peoples’ Trade and Industry Bureau has sourced close to 25,000 workers to be trained and recruited for the Hawassa Industrial Park (HIP), which is expected to become operational in October 2016. A total budget of close to 60 million Br is set aside in the region to source, recruit and train 30,000 workers in two years. This represents half of the ultimate absorption capacity of the Park when it is fully occupied and operational at full capacity.

Same ‘Ol, Same ‘Ol Economy

It was in this year that the IMF came out, saying “same ol, same ol” economy. Little appears to have changed in the views of those at the International Monetary Fund (IMF) about Ethiopia’s macroeconomic performance. Disclosing its latest conclusion, on September 30, 2015, Ethiopia’s economic performance remains “buoyant” – a word with connotations of “light-heartedness”, which executive board members used, changing the tone from “robust” – the term used in their previous assessments, implying vigour in the economy over the years.



Published on Sep 13,2016 [ Vol 17 ,No 854]


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