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  • Djibouti opens most advanced port in Africa

    Djibouti has today opened the country’s latest mega project – the Doraleh Multipurpose Port (DMP). The official opening ceremony was held under the auspices of Djibouti’s President His Excellency Ismail Omar Guelleh, together with His Excellency Hailemariam Desalegn, Prime Minister of Ethiopia.

    The new 690 hectare facility is equipped with ultra-modern facilities that can accommodate 100,000 dwt vessels. The USD$590m project was started in 2015, and jointly financed by Djibouti Ports and Free Zones Authority (DPFZA) and China Merchant Holding (CMHC). The state-of-the-art port equipment was all manufactured by the Chinese firm ZPMC. Vessels have already begun using the facility.

    The port provides a world-class logistics platform for shipping. The new facilities will vastly improve the efficiency and ease of doing business in the Horn of Africa. The project cements Djibouti’s position as a critical junction on the “Maritime Silk Road”.

    At the opening ceremony, Aboubaker Omar Hadi, Chairman of DPFZA remarked: “With this new world-class infrastructure, Djibouti confirms its position as a major trading hub for the continent. We are proud to show the world our capacity to deliver major infrastructure projects – some of the most technologically advanced on this continent.”

    DMP is the latest in a series of mega projects in Djibouti. These projects include four new ports, a Liquefied Natural Gas facility, an oil terminal, and two brand new airports. Together they will dramatically expand Djibouti’s ability to serve as a platform and trade hub for the region.

    The projects follow the completion of the Addis Ababa-Djibouti Railway, a new 752km track linking Ethiopia’s capital with the Port of Djibouti.

    Djibouti sits at the centre of world trade routes, connecting Asia, Africa and Europe. The port is a gateway to one of the fastest growing regions of the world with 30,000 ships transiting the port each year. Goods from Asia represent 59%, with 21% coming from Europe and 16% from elsewhere in Africa.

    Source: ethionewsflash.com

     

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  • Hedasse Grand Mall Avails Shares with Highest Promoters’ Fee

    Hedasse Automotive & Machinery Market S.C availed 2.99 million shares worth three billion Birr for public subscriptions to build a grand mall in Addis Ababa, whose exact location remains undisclosed.

    The company has also offered to charge potential subscribers of shares the highest, 17pc, as promoters’ fee, meant to cover administrative and promotional cost during the period of formation. If succeeded, promoters will raise over half a billion Birr in promoters fee.

    Most share companies floating initial public offerings (IPO) charge service charges of five percent to 10pc, thus making Hedasse’s the highest fee to date.

    Ahmedin Mohammed, one of the 11 promoters and president of the share company, says such high fees is crucial to cover “operational cost of the project.”

    From the fees collected from prospective shareholders, 15pc of it will be deducted for VAT, while six percent goes to corporate social responsibility and eight percent to service commission reserved to shareholders who bring others to buy shares, Ahmedin told Fortune.

    The company was initially founded two years ago by 30 individuals and currently has 215 shareholders. With par value of 1,000 Br, minimum number of shares up for subscriptions is 600 shares while the highest is at 2,400 shares.

    Hedasse started to sell shares on February 5, 2017, but it officially offered IPO on April 19, 2017, at the Sheraton Addis Hotel.

    The company aspires to work in three different industries; automotive market, manufacturing and a grand mall, which is hoped to incorporate no less than 5,000 stores, and claimed by promoters to be “the largest mall in Africa.”

    “We’ve been doing research, market analysis and the design of Hedasse grand mall for the past two years,” says Ahmedin, who is an importer of spare parts and machineries.

    Ahmedin is currently constructing a spare parts manufacturing plant worth 109 million Br in Qaliti, along Debrezeit Road. He is also among those who initiated the idea of importing 1,000 meter taxis.

    The new company intends to construct a three-storey grand mall on a 250,000sqm plot, accompanied by two four-star hotels, and four residential apartments. It will also have a parking space with the capacity of about 8,000 vehicles.

    Dereje Mekonnen, a general manager of the project, states that different international construction companies have shown interest to take part in the project. He also compares the grand mall with Mall of Africa located in Waterfall city, South Africa, which lies on 550,000sqm and has 2,500 shops.

    “We hope to be dubbed ‘the biggest mall in Africa,” Dereje said.

    The entire project will have two phases; the first phase will incorporate the shops and is expected to be finalized within three years and will be able to create permanent job opportunities for about 35,000 citizens, promoters say. Phase two will converge on the construction of the apartments and the hotels, according to Anemaw Abera, media and promotion manager for the company.

    Hedasse is in the process of acquiring the land for a lower rate, negotiating on the fixed lease price with the city administration and is hoping to get one of the nine reserved areas for development in the city, according to Ahmedin.

    “Even if the location has not been acquired yet, it is not a concern for me as the investment we make is safe in a blocked account,” said Raiwa Mohammed, who bought shares in the company and runs a car decor shop around Sebara Babur area, in Gullele District.

    The company has opened such accounts with all the commercial banks operating in the market.

    An interested shareholder buying the lowest share makes nine percent initial payment of the shares wanted, together with 50pc of the promoters fee, before being registered as a shareholder.

    People close to the issue raise concerns of over ambition, particularly in relations to the ability of promoters to raise all the required capital. They relate the case of Addis Africa International Convention & Exhibition Center (AAICEC), which took over three years to sell the 300,000 shares it availed for public subscription, mainly due to the low interest from the public. AAICEC realised its plan after the involvment of the city administration which bought shares worth one billion Birr out of the total three billion Birr.

    “Hedasse will surely benefit if the government gets involved,” a consultant in project development told Fortune.

    Source: Addisfortune

     

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  • Massive Face lift Occurs at DBE

    The Development Bank of Ethiopia (DBE), the state policy financier, has replaced four of its vice presidents effective as of May 2, 2017.

    Tadesse Hatiya, vice president of credit management, Teka Yibrah, vice president of corporate services, Almaz Tilahun, vice president of finance & banking management, Dereje Awgichew, vice president of project financing, are the VPs who lost their positions.

    The new vice presidents of the Bank who were assigned by Getahun Nana are Getachew Waqe Haileyesus Bekele, Hadush Gebreegziabher and Endalkachew Mihretu, assuming the posts of the outgoing VPs.

    Teshome Alemayehu will stay at his current position as VP of Lease Finance & Branch Operations.

    A new structure introduced after Getahun Nana became president of the Bank is the primary reason for the replacement of the VPs, according to a source close to the Bank.

    The fate of the outgoing VPs is not yet decided, the same source disclosed. But the letter given to the outgoing VPs reads they were removed from their post with acknowledgement.

    Source: Addisfortune

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  • Dangote plans portfolio expansion in Ethiopia beyond cement

    The richest man in Africa, Aliko Dangote, is contemplating to invest in the Sugar industry in Ethiopia.

    The Ethiopian government has invited the Nigerian business tycoon to invest in the sugar manufacturing sector. Dangote Industries has built the biggest cement factory in East Africa in Ethiopia that started production in June 2015.

    Deep Kamara, managing director Dangote Industries Ethiopia, told The Reporter that in a recent discussion between Prime Minister Hailemaraim Dessalegn and Aliko Dangote investment in the sugar sector was a point of discussion. “While they were discussing the yield of sugar and the capacity Ethiopia is building Mr. Dangote took up a position that he would like to see the opportunity to invest in the sugar capabilities in Ethiopia. It is still in the conceptual stage I should say,” Kamara said. 

    The Ethiopian government through the state-owned the Ethiopian Sugar Corporation is making hefty investments on sugar industries development. Aiming to become one of the top ten sugar producing countries in the world by 2023, ESC is building ten sugar factories in different parts of the country. The ambitious plan aims at boosting annual production capacity from the existing 300,000 metric tons to a staggering four million.

    However, the government is facing budget constraint to finance the completion of the ongoing construction of the sugar factories. In addition to looking for loans, the government is trying to attract foreign companies to partner with ESC.

    Kamara said Dangote expressed his interest to invest in the Sugar sector. “Within the group we have capability for sugar manufacturing.” However, he said it is yet to be decided whether to buy stake in the existing sugar factories or set up an independent sugar manufacturing plant. “Both options are open for discussion but as I said the discussion is at an early stage and the details have to be worked out,” Kamara said.

    Kamara said that Dangote is very optimistic about Ethiopia and wants to continue investing in Ethiopia.  

    Dangote has set up a cement factory in Ethiopia at a cost of 600 million dollars. The factory, which has an annual production capacity of 2.5 million tons of cement, began running in June 2015. The factory lies on 134 hectares plot of land in West Shoa Zone, Adaberga Wereda, near Muger town, 85 km west of Addis Ababa and employs 1,500 workers.

    “Dangote Cement is well established in Ethiopia and it is doing very well. We are one of the market leaders in the Ethiopian cement market. We have customer acceptance based on product quality and service.  We could have done better unfortunately due to some circumstances the trend has not really gone to where we have expected it to be. Going forward things are improving and we will be doing much better,” Kamara said.

    Dangote Cement is currently building a third silo and PP Bag manufacturing plant. The PP Bag manufacturing plant, which is being constructed at a cost of 19 million dollars, will have an annual production capacity of 120 million cement bags. 

    “We are building a PP Bag factory almost double the capacity of our requirement. Not only for us but we would like to export and service the local market with our PP Bag capability,” Kamara said.

    It will take six to eight months to complete the construction of the third silo. The factory also hopes to finalize the PP Bag manufacturing plant by July this year.

    Dangote Cement has a plan to build a second cement manufacturing plant. “It is not immediately on the chart because we have not yet reached our full capacity. We are looking at some technological improvements which would help us enhance our capability by 15-20 percent to optimize our cost. Once that is done we will look at the second line.”

    The road to investment in Ethiopia has not been a bed of roses. There are obstacles hindering the progress of Dangote’s investment in Ethiopia.  Some equipment and machineries of Dangote Cement have been vandalized during the recent political unrest.  “We have some challenges but we are on the right track. We hope to achieve the planned capacity and export to other countries.”

    Kamara said that fluctuation in electric power supply and shortage of foreign currency are some of the challenges facing his company. Particularly, unavailability of foreign currency has become a critical challenge.  

    According to Kamara, his company is not able to procure spare parts. “Our plant is not new anymore. It has been a year and a half since it started running and it now needs parts for regular maintenance. It has been close to eight month since we requested forex.”

    Spare parts for cement industry are not manufactured in Ethiopia. And it is not readily available on the shelves in the international market. Orders have to be placed for production. It takes three to six months to get delivered.

    “This has affected our productivity to some extent. We are in the critical zone. That is a major constraint we have at the moment and we are expecting help from the government,” Kamara said.

    According to him, his company needs 10-15 million dollars for the procurement of spare parts to service the cement manufacturing plant.

    Source:TheReporter

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