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28 February 2007
The Ethiopian flower industry, after having experienced a tremendous boom in the Oromia and Southern Regional States, has now set its sights on the Tigray and Amhara Regional States.
The expansion into the northern part of the country is the first for the sector but the growing demands of investors wanting to enter into the field have led to the Investment office of the two regional states allocating well over 2,000hct of land to be awarded to horti and floriculture.
The Investment Bureau of the Tigray Regional State Investment is attempting to capture the interest of investors, passing a decision to provide land free of charge. The Bureau has already sectioned off 1,070hct of land in six select sites for flower and grape farming.
The sites are located within a seven kilometre away from Mekelle and around Wukro towns 780Km and 860Km north of Addis Abeba, respectively.
Head of the Tigray Investment office, Moges Tesema told Fortune that the areas allocated for this purpose had proven favourable for flower production, having high water potential.
Similarly, the Amhara Regional State, has allocated a 1,013hct area within an 18Km radius around Bahir Dar town, 477Km north west of Addis Abeba.
The Public Relations Office Head with the Amhara Regional Trade and Industry Bureau, Aynalem Belete told Fortune, that the state was fully prepared to provide any necessary and additional infrastructure as per the demand of the investors.
With the new movement of the floriculture industry into the north, the Ethiopian Airports Enterprise is also a big factor. The international airports in Bahir Dar and Mekelle have been upgraded to international standards in order to provide around-the-clock service to passengers. Now that flori and horticulture have moved into the area, the airports will also be carrying large amounts of cargo.
Ethiopian Airlines, the largest cargo carrier out of the country, will also be extending its services to these two international airports once the farms are operational and begin exports, according to the officials of the regional states.
The selected sites around Mekelle, which have caught the attention of many, were visited by local and international investors including the Ethiopian Horticulture Producers, Exporters Association (EHPEA) President, Tsegaye Abebe.
Green Coffee Agro-Industry Managing Director, Tadele Abraha told Fortune that his company has undergone initial preparations to invest in grape production in the selected areas around Mekelle.
According to Tadele the provision of land free of charge, the promise from the State’s Investment office to dig wells and provide water, and the proximity of the airport both to the farm and the European markets as compared to the areas around Addis Ababa are some of the positive advantages.
Tsegaye Abebe told Fortune that the selected sites have been proved to be favourable for flower farming and so the surge of investors should soon begin.
The flower production started in 1980s for commercial purposes. It was started by the state Farm Enterprise, the Zewiay State Farm Enterprise being a citable example. The state-farm used to have about 150hct of flower farming land until 1987. Once the private sector entered the industry, the state-farm flower growing began to decline. Following the state farm, the pioneers from the private sector were Meskel Flower PLC and Golden Rose Agro Farm Ltd, a foreign company that entered the industry in 1999.
The tremendous growth of the floriculture industry is directly related to government’s incentive that includes customs duty exemption, income tax exemption and remittance of funds. The Development Bank of Ethiopian also provides special loans for the sector.
According to the Ethiopian Customs Authority, flower export performance over the last four years has shown tremendous growth, especially in the Oromia and Southern Regional States.
In the 2002-2003 fiscal year, the country earned 2.9 million dollars; in 2004-2005, it earned 12.7 million dollars and in 2005-2006, 21.9 million dollars. All of which was earned from only 150hct of land.
The sector is a labour intensive industry which currently involves 25,000 workers, 70pc of which are women.
The current figure from the Ethiopian Investment Commission shows an aggregate capital of 7.5 million Br from 235 projects registered. Of these, 171 are foreign investors with a total capital of 5.3 billion Br. The remaining 64 are local investors.
Currently, 75-80 projects are underway. Fifty farms are fully operational and over thirty of them are fully involved in the export of products to the European market.
By WUDINEH ZENEBE - FORTUNE STAFF WRITER