Ethiopia looks to accelerate its food processing sector with new business park

Mar 8, 2021

Ethiopia country profile
Ethiopia’s Oromia Industrial Parks Development Corporation has signed an agreement worth Birr 7.8bn ($193.6m) to construct a food processing park in Oromia. The new park, which will process coffee, tea, edible oils, grains, dairy, meat and honey products, will come on stream in 2024. It is part of a wider government strategy to position Ethiopia as the leading manufacturing hub in Africa by 2025.

The new park will be built in the city of Nekemte, 320km west of Addis Ababa. It will cover an area of 250ha and is forecast to create 50,000 jobs. Funded by the local government, it is expected to take 3 years to build.

Nekemte is on the planned Sebeta-Ambo-Nekemte-Bedele rail link, which will connect with the mainline taking goods to the port at Djibouti. In June 2020, the African Development Bank has approved a $3.4m funding for a feasibility study on the Ethiopia-Sudan railway connection (which would go from Addis Ababa through Nekemte and onto Khartoum). In that context, Nekemte is perhaps an odd choice: the pivotal junction for exports to both Sudan and South Sudan would be Ejaji, to Nekemte’s east.

The Nekemte park will reportedly be aimed at domestic and multinational companies building goods for export. It comes soon after the opening of the new 240ha Bure Integrated Agro-industrial Park in the state of Amhara, in the north of the country. That park houses Ethiopia’s largest edible oils factory, the  PhiBela Edible Oil Factory, which has a daily production capacity of 1.5m litres of palm oil and is capable of servicing 60% of Ethiopia’s current demand.

The Bure and Nekemte sites are part of an initiative that will see the Ethiopian government invest over $730m to build four pilot IAIPs and Rural Transformation Center facilities, designed to host around 100 medium and large food processing factories.

According to Construction Review, nine industrial parks are located near the Chinese-built Ethiopia-Djibouti rail line. The China Civil Engineering Construction Corporation has built large parks in Bahir Dar, Adama, and Dire Dawa. The China Communications Construction has built the textile centre at Mekelle Industrial Park. The China Tiesiju Civil Engineering Group has built the Kilinto pharmaceutical industrial park on the outskirts of Addis Ababa.

This week the Ethiopian government also aid the foundation stone for the Lemmi Industrial Complex in Lemi town, 130km north of Addis Ababa. Built on 270ha of land, it is a joint venture between West China Cement Limited (WCC) and former Tiger Brands partner East African Holding, an Ethiopian conglomerate with interests in cement and FMCG products.

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