ETHIOPIA – Agri-CEFT, subsidiary of the troubled Horizon Plantations, member of MIDROC Investment, has set out on a close to 120 million Br expansion project of its tea processing and packaging factory.
The expansion project, is located in a 19,000sqm space in the private Huajan Industry Zone.
It comprises 45 sheds on 138ha for textiles and garments, leather and leather products, chemicals and pharmaceuticals, agro-processing and metal engineering factories.
The project is estimated to be completed in one year and has a capacity to produce six million kilograms of tea leaves.
So far the foundation design has been planned by the local Haile Gebriel Consulting & Architecture Engineering Plc, the company behind the design work of Wollo Tertiary Health Care & Teaching Hospital.
“We have ordered prefab roofing and wall materials worth 200,000 dollars from Kuawit,” Senait Anbesso, communication & training service manager, told Fortune.
The bid for construction work announced this month, has so far attracted 30 companies, bidding to construct a 9,000sqm substructure in four months.
“All this is done with the projected growth in demand, as well as potential capacity. [The project] has the potential to increase growing capacity by 50pc to meet the increasing local consumption by 5,000tn,” Senait said.
Agri-CEFT’s bid after the completion of this project is to supply four million kilograms, and locally supply 51pc to the local market while exporting the rest.
In the last five years (2001/02 to 2006/07), Agri-CEFT has exported only a little over 6,000tn of tea mainly to Pakistan, Yemen, the UK, Netherlands, USA and Djibouti, earning 7.5 million dollars
Acquired from the then Privatization Agency, Horizon Plantations bought two tea plantations, Gumero and Wush Wush in the south western part of the country and a processing factory in the capital for total of 27 million dollars almost fifteen years ago.
This expansion plan however comes in a time frame when Horizon Plantations is frequenting the courts for failing to pay what it owes the Ministry of Public Enterprises for the purchase of other farms and coffee processing factories in 2012.
In the courts it claimed serious financial challenges in the company but this was consistently rejected by the judges who ordered it to pay close to half a billion Birr.
The growing demand for tea in the land of coffee is of interest.
Tea is not a plant indigenous to Ethiopia. It was introduced to the country in 1928 by the British Diplomatic Mission and planted in Gore, Illubabor Region, on a trial basis. However, tea at a commercial farm level started in 1966 in Gumaro near Gore.
The other commercial tea plantation started at Wush Wush in 1973. By the end of the seventies a total of 130 ha was planted in Ethiopia.
Of the 3,847ha covered by these two plantations, the total area under tea cultivation is 2,010ha. The remaining area is used to plant eucalyptus trees that serve as fuel for tea drying in the factories
Currently, the country has the capacity to produce 7,000tn of black tea per annum.
Between 2012 and 2015, it imported tea worth close to 800,000 dollars, while export earnings shot up to 5.5 million dollars. This trend indicates a decline in both the export and import of tea, due to the increase in local demand identified by Agri-CEFT.
The sector is also known for its huge capacity for employment, as it involves temporary and permanent labour intensive processes.
“The factory so far employs 128 permanent and 204 temporary workers,” Senait told Fortune. “We project the number to reach close to 600 when the expansion is completed.”
Huajan Industrial Zone, owned by Huajian International Shoe City (Ethiopia) Plc, it was built on 138hc and is located on the outskirts of Addis, in Lebu.
The privately-owned Eastern Industrial Zone is home to more than 20 other Chinese companies. Huajan, established with initial capital of 2.2 billion dollars.