Ethiopia Rides Manufacturing Boom

Ethiopia Rides Manufacturing Boom
Global manufacturing is slowly moving from Asia to Africa

AFRICANGLOBE – The government of the Federal Democratic Republic of Ethiopia has ushered in a manufacturing boom that is set to make the country a major regional player across several lines of products.

The widespread eagerness to invest is made that much more due to a large domestic market and an increasing number of skilled workers.

It is no wonder that some have dubbed Ethiopia as the ‘Bangladesh of Africa’ and with good reason. There has been tangible success already, with Chinese, Turkish and European garment manufacturers seeking to expand their operations.

However there are plenty of other areas worthy of attention.

The major manufacturing activities are in the production of food, beverages, tobacco, textiles and garments.

There are also opportunities in leather goods, paper, metallic and non-metallic mineral products, cement and chemicals.

Under the Growth and Transformation Plan (2010/11-2014/15), production of textile and garments, leather products, cement industry, metal and engineering, chemical, pharmaceuticals and agro-processing are priority areas for investment.

Thus there are ample manufacturing opportunities for prospective investors in the following areas:

– Textiles and clothing. Spinning, weaving and finishing of textiles from the beginning and the production of garments; manufacture of knitted and crocheted fabrics, carpets and sportswear and so on. The choice is yours.

– Food and beverage products; processing of meat and meat products, fish and fish products and fruits and vegetables. Investors can also delve into integrated production and processing of dairy products; manufacture of starch and starch products; processing of animal feed and processing and bottling of mineral water.

Other products to manufacture include sugar, brewing and wine-making, processing of pulses, oil seeds or cereals, manufacture of macaroni/pasta products.

– Tannery and leather products. You may decide to venture in the tanning of hides and skins up to finished level; manufacturing of luggage items; handbags, saddle and harness items. There is also footwear. Ethiopia’s footwear industry and leather sector in general enjoy significant international comparative advantages owing to the country’s abundant and available raw materials, highly disciplined workforce and cheap prices. Ethiopia boasts the largest livestock production in Africa, and the 10th largest in the world. Ethiopia annually produces 2.7 million hides, 8.1 million sheepskins and 7.5 million goat skins. This comparative advantage is further underlined by the fact that the costs of raw hides and skins constitute on average 55-60% of the production of semi-processed leather.

Ethiopia’s leather and leather product sector produce a range of products from semi-processed leather in various forms to processed leathers including shoe uppers, leather garments, stitched upholstery, backpacks, purses, industrial gloves and finished leather.

Ethiopian leather products have been exported to markets in Europe (especially Italy and the UK), America, Canada, China, Japan and other far eastern countries and the Middle East. Leather is also exported to African countries including Nigeria and Uganda.

– Glass and ceramics. This area includes tableware and sanitary ware, sheet glass and containers.

– Chemicals and chemical products. In this category is the manufacture of basic chemicals (including ethanol) using local raw materials which are plentiful. Other products that can be made in Ethiopia are fertilizer and nitrogen, soda ash, rubber, PVC granules from ethyl alcohol and caustic soda. We can add chlorine-based chemicals, carbon and activated carbon, precipitated calcium carbonate and ballpoint ink to the items already mentioned. Varnishes, soaps and detergents are other products easily manufactured in Ethiopia. There is a host of by-products from the chemical industry not forgetting pesticides and fungicides.

– Drugs and pharmaceuticals. This includes the manufacture of pharmaceutical medicinal, chemical and botanical products. These can come in the form of tablets, capsules, syrups and injectables

– Paper and paper products. Pulp from indigenous raw materials is readily available.

– Plastic products. Investors may choose to go into high pressure pipes or pipe fittings, shower hoods, wash basins, insulating fittings, light fittings, office and school supplies. The list is long.

– Building materials. There is room to invest in the making of lime, gypsum, marble, granite, limestone, ceramics, tubes, pipes and fittings. Amidst a building boom, you cannot go wrong going into this sector.

Less you have questions; the Ethiopian Investment Commission can guide you every step of the way. The services include;

– Promoting the country’s investment opportunities and conditions to foreign and domestic investors;

– Issuing investment permits, business licenses and construction permits;

– Notarizing memorandum and articles of association and amendments;

– Issuing commercial registration certificates as well as renewals, amendments, replacements or cancellations;

– Effecting registration of trade or firm name and amendment, as well as replacements or cancellations;

– Issuing work permits, including renewals, replacements, suspensions or cancellations;

– Grading first grade construction contractors;

– Registering technology transfer agreements and export-oriented non-equity-based foreign enterprise collaborations with domestic investors;

– Negotiating and, upon government approval, signing bilateral investment promotion and protection treaties with other countries

– Advising the government on policy measures needed to create an attractive investment climate for investors