The first Ethiopian owned private industry park, Hawassa Textile and Industrial Park S.C, targets to accomplish the new facility within a year’s time despite price hikes and construction input shortage delays to the project.
During Zhao Zhiyuan’s, Chinese ambassador to Ethiopia, visit to the industry park located 258 km south of Addis Ababa at Hawassa town of Sidama region, Ahmed Abderuf, CEO and one of the three owners of the Hawassa Textile and Industry Park, said that although the project did not pan out as planned, in the past one year the project has accomplished its earthworks and footing.
Ahmed explained that the escalation in price of construction materials and shortage of cement and rebar primarily hampered the project, which is managed by the Chinese state giant, Sinoma International Engineering Co Ltd.
“So far the civil works of the project, which is the foundation structure, has been accomplished by 37 percent. The remaining works are steel structure and electrical installation which is very easy and will be done swiftly,” Ahmed explained.
The CEO added that a Chinese company has already been hired to manufacture the steel structure and expressed his hope that the project which includes the construction of 14 sheds will be finalized in a year’s time. The 14 sheds are to be erected in 11,000 square meter areas each.
As per senior staffs of the park, at the current stage,most of the construction works is financed by the company itself owing to the National Bank of Ethiopia sanctions for commercial banks to pause on fresh loan provision that was lifted few months ago.
Ahmed said that they are on process to access finance from the state owned financial enterprise to support the project with additional financial sources. When the project lunching ceremony was held about a year and half ago, Ahmed told Capital that they were expecting financial backing from the Commercial Bank of Ethiopia since the project demands huge resource in order for it to materialize.
The new project is expected to consume four billion birr. At this stage interested global textile and garment producers have been showing their interests to lease sheds at the compound.
Besides new sheds development, the company is renovating the existing facility that it bought few years ago at a cost of half a billion birr.
Now the old textile machines at the existing sheds are being replaced by brand new equipment to commence yarn production. The newly installed machines will have two production lines for acrylic yarn and nylon that will be provided as input for local and global textile industries.
“Most of the installation work for acrylic yarn line has been concluded to produce seven tons of acrylic yarn per day, while machinery procurement for nylon line is on process to produce ten tones of nylon yarn per day,” the CEO said.
The revamping work on the oldest facility has consumed 600 million birr. According to the information Capital obtained from the company, Hibret Bank is supporting the renovation works with undisclosed amount of finance.
Hawassa Textile and Industrial Park S.C is located on a 35 hectare piece of land at the southeast outskirt of the regional capital.
Sinoma which built the Dangote Cement factory and the expansion of Muger Cement now has involvements on the development of the Hawassa and Dire Dawa industrial parks.
The first Ethiopian owned Garment Park commenced the construction of 14 sheds at Hawassa at a cost of two billion birr.
On a ceremony held on the 6th of September, Hawassa Textile and Industry Park announced that it has commenced the construction of the garment sheds. The ceremony was graced with the presence of the President of the Sidama Region- Desta Ledamo and state Minister of Trade and Industry- Misganu Arega.
The former Awasa Textile, which changed its name to Hawassa Textile and Industry Park that commenced operation three decades ago has been one of the public enterprises that have passed different privatization scheme, which was introduced by the former ruling coalition, EPRDF, which controlled the political power in early 1990s.
During the early stages of the privatization process the company was leased to foreign investors and later on became fully privatized. At these stages when it was not performing accordingly it was controlled by banks as collateral until the current owners secured the facility. It is currently located at the South Eastern outskirt of Hawassa town.
CEO and one of three owners of the Hawassa Textile and Industry Park, Ahmed Abderuf affirmed that both him and his partners secured the facility three years ago and now the old textile machines at the existing sheds are being replaced by brand new equipment to commence production in the coming few months.
“To secure the factory, we paid half a billion birr. The purchase and installation of the new machines cost us 200 million birr and in the future an additional 200 million birr will be set for the additional equipment on the textile production at the port,” said Ahmed to the media at the press conference held in relation to the construction launch ceremony.
The factory will have a capacity to produce 14 tons of textiles per day when it commences operation in the coming four months.
He added that the new 14 shades will be erected in 11,000 square meter area each will be ready for production in less than a year.
The new project that is currently on a 35 hectare piece of land is being constructed by Sinoma International Engineering Co Ltd. “Prominent global brands like Gap have already shown their interests to invest in the sheds,” Ahmed said.
Most Textile and Garment industry parks in the country are controlled by the government. Furthermore, foreign investors are actively involved in the development of the industrial parks. However this is a first for Ethiopia investors to manage the ‘garment park’ and even fully invest on the parks. In addition Ahmed states that his company will expand similar facilities in other parts of the country.
The park in Hawassa is expected to accommodate up to 30,000 jobs. “In terms of size and job opportunity our park will be the second facility,” the CEO explained.
Currently the biggest park in the country is the state owned Hawassa Industry Park, which is located in a similar area just few kilometers from Hawassa Textile and Industry Park.
According to the CEO, most of the products from the existing textile factory and the future facility will be exported.
Misganu explained that the government has a target for this industry to contribute to the GDP from the current 17 percent to double this percentage. He adds that they will provide support to this investment which will contribute massively in job creation and urbanization.
Ahmed further informed Capital that United Bank was the financier for the textile factory investment. The Commercial Bank of Ethiopia is also expected to provide support for the project.
Desta, who leads the new region, said that his government will provide every support that is required in realizing the investment.