Largest Paper Mill Rolling In




Yekatit Pulp and Paper and China Engineering Corporation (CEC) have signed an agreement to establish what will be the biggest pulp and paper mill in Ethiopia, it will cost close to two billion Birr.

The mill will be located in the Oromia Regional State.

CEC was awarded the project through an open international bidding process floated a year ago.

CEC is expected to complete the project within two years after the first down payment. Established half century ago, CEC is engaged in engineering designing, consultation, and project contracting in efforts such as pulp and paper, energy and environmental protection. CEC also has an agreement with Endowment Fund for the Rehabilitation of Tigray (EFFORT) to construct integrated PVC resin manufacturing plant, at a cost of five billion Birr.

The mill project is planned to commence operations by mid-2019 and will create over 2,400 jobs. It will produce pulp to create industrial packaging and boxes as well as toilet paper, napkins and kitchen towels for both the local market and export. It will also produce boxes and packaging that horticulture and agriculture exporters currently have to import.

“The realization of this project will massively benefit people involved along the pulp and paper market value chain,” said Behailu Aregahegn, commercial manager of Yekatit.

About 40 pc of the project work will be financed by the owners’ equity contribution and 60 pc will be secured through a long term loan to be secured from the Development Bank of Ethiopia. After the completion of the mill, Yekatit will earn 10 million dollars from export of final products such as papers and packaging board boxes. It is also aimed at substituting imports of such products and could save over 356.5 million Br of foreign exchange for the nation.

The consultancy of the project is C2C paper projects LLC, an Indian based company engaged in the supervision of such projects. C2C has worked in the paper consultancy in Europe, the U.S. and the Middle East, Qatar and Saudi Arabia

Ethiopia currently imports over two billion Birr of paper products annually. The total consumption of paper in Ethiopia is estimated to be 2,000 tonne per year. There are two other paper manufacturing factories in the country, the Indian AnMol and Ethio Pulp and Paper Factory, which are located in the Wonjii area. A new company called Pure Wood Pulp Paper & Packing PLC is also set to open in the next 12 months, with an investment capital of one billion Birr in Dukem, 37 km away from Addis Abeba. It is owned by foreign investors from China and Diaspora Ethiopians.

Yekatit, a pioneer in the paper industry, was founded five decades ago by foreign investors and nationalised by the Dergue regime. It was privatised in 2010 and sold to one of its current owner Gobezayehu Zerihun. Two years later, it merged with Techno Partners, leading to the foundation of Yekatit Paper Converting Plc. Currently, it is owned by Gobezayehu Zerihun and Misrak Ayele.



By HABTAMU HAILE
FORTUNE STAFF WRITER

Published on Jan 24,2017 [ Vol 17 ,No 873]


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