Sh13 billion food production facility inaugurated in Ethiopia
Updated Thursday, May 7th 2015 at 19:23 GMT +3
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BISHOFTU: Africa-focused multinational consumer goods company Vasari Global, in partnership with Ethiopian entrepreneur Solomon Wondimneh and his company Ahadu Plc, Tuesday inaugurated a new food production facility for Ahadukes Food Products SC. The launch marks the first phase of capital deployment of USD 36m from the total USD 150m investment (including working capital) initiated by the company in 2013. Initially, the factory will focus on biscuit products, which will be marketed under the flagship Ahadu brand. The next phases will see the facility expand to include the production of pasta and other flour-based goods for the growing local consumer market.
Speaking at the factory in Bishoftu, 40 kilometres south east of the capital Addis Ababa, Ethiopian President H.E. Mulatu Teshome underlined the nation’s growing spending power and commended Vasari Global’s commitment to the country, remarking “The role of food processing plants such as Ahadukes creates valuable linkages between agriculture and industry, which is critical in contributing to the structural changes and transformation of the national economy. It is encouraging to learn that this project has already invested USD 36 million and is mainly executed by a local company, Ahadu PLC. Having such a visionary local company is vital to the country as it will be exemplary in inspiring many others and attracting them to the sector. The company’s move to partner with Vasari Global, a UK based major investment group, is also a wise move that will help in closing gaps and accelerating growth.”
Vasari Global Chairman Vivian Imerman said, “Today’s inauguration is a major milestone in our long-term strategy to develop a strong, diversified consumer brands company in Africa. We are delivering quality products and introducing world class new brands into the market to capture the incredible market opportunity here in Ethiopia. Our priority is providing locally produced, well-packaged and affordably priced food products designed to appeal to local consumer tastes. We are working with an experienced and respected local partner and have been extremely encouraged by the support of the Government.”
British Ambassador to Ethiopia Greg Dorey noted “the Ahadukes project goes very much with the grain of the Government of Ethiopia’s desire to add value to agricultural production through the establishment of new processing methods and establishments. It will contribute import substitution and meeting export targets as well as creating large numbers of jobs and transferring technology. I gather the Regional President recently presented Ahadukes with a special reward in recognition of the importance of this investment to the Oromia region.”
Whilst the majority of the expansion in African consumer spending is being seen in South Africa and Nigeria, emerging markets like Ethiopia with its population of over 94 million, are also growing fast with an FMCG market expanding by USD $1billion each year. As Africa’s second most populous country with one of the fastest rates of urbanisation in the world, Ethiopia is now experiencing a consumer goods revolution that is forecast to gain further momentum in the next five years.
Having made multiple investments in the FMCG market in Ethiopia and with significant stakes particularly in the foods and drinks industry, Imerman went on to say, “All the ingredients to whet an investor’s appetite are here in Ethiopia: the country is stable, economic growth is impressive, and the population is still expanding. For us, Ethiopia is a wonderful place to grow an exciting new business.”
The factory will initially focus on commercial production of the first biscuit line and utilise approximately 2,000m2 of the 9,780m2 primary building. The business will also expand into another 3,742m2 building which was constructed for pasta production. Additional land next to the current site has also been acquired for further potential expansion in the future. Ahadukes Food Products SC already employs around 600 people and at full capacity once the three phases are initiated, is projected to create up to 3000 direct and indirect jobs. With an extensive route to market strategy, a strong process and infrastructure plan has been developed which utilises an active distribution model in line with multinational best practice, with a goal of directly accessing over 40,000 retail outlets within 4 years.
Speaking alongside Oromia regional state president H.E. Ato Muktar Kedir, Bishoftu Mayor Ato Kefyalew Ayana and other senior officials, Ahadu PLC Founder Solomon Wondimneh commented “The joint venture between Ahadukes and Vasari Global will drive the company to become highly competitive in both domestic and international markets due to the significant global experience of Vasari Global. In addition to this, it will strengthen the company’s capital for further expansion of the investment”.
He affirmed “Within a three year period, Ahadukes intends to become the leading agro processing company in East Africa. The use of high tech machinery and production of internationally competitive quality products will benefit the country in terms of export revenue. Currently, Ahadukes purchases 80% of its raw materials from local suppliers.
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