Bloomberg News

Ethiopia Seeks Bids for Coffee Farm, Other State-Owned Companies

November 08, 2012

Ethiopia’s government invited bids for six state-owned enterprises as part of a plan to raise 1 billion Ethiopian birr ($55.1 million) this fiscal year by selling assets to private investors.

Among the companies being sold are the 600-hectare (1,483- acre) Arbagugu Coffee Plantation in the central Oromia region, said Privatization and Public Enterprises Supervising Agency spokesman Wondafrash Assefa. The company grows the Harar variety of coffee in Ethiopia, Africa’s biggest producer.

“We have a program to transfer almost all enterprises aside from the strategic ones,” Wondafrash said in an interview yesterday in Addis Ababa, the capital. A mission of the agency is “to transfer public enterprises to the private sector because of the free-market policy” of the government.

Ethiopia is selling assets to private investors to help finance a five-year growth plan under which it will spend 144 billion birr this fiscal year on industries including housing, transport and energy. Last year, the government sold Meta Abo brewery to Diageo Plc (DGE), the world’s largest liquor maker, and Harar and Bedele breweries to Heineken NV (HEIA) for a total of $485 million.

Investors have until Dec. 20 to bid for Arbagugu, Construction Works and Coffee Technology Development Enterprise, Awash Wine Share Co., Commercial Printing Enterprise, Hamaressa Edible Oil Share Co., and Bilito Siraro Far, Wondafrash said.

Billionaire Bids

The agency also plans to hold new tenders for five businesses including Upper Awash Agro-Industry, the country’s largest orange grower, that billionaire Saudi businessman Mohamed al-Amoudi’s companies won bids for last year and haven’t paid for yet, Wondafrash said.

“Up to this day the winner has not paid,” he said. “We are waiting for the decision from the board to cancel last year’s bid.” Haile Assegide, CEO of al-Amoudi’s Debra Midroc, didn’t answer calls to his mobile phone seeking comment.

Ethiopia’s government operates a mixed economy in which state companies monopolize or dominate key industries including telecommunications, banking and power, while it encourages private investment in manufacturing and agriculture. The amount raised during the fiscal year that runs through July 7 will depend on the bids received, Wondafrash said.

The agency has invested in companies including Turkish- owned factory Saygin Dima Textile Share Co., of which it owns 60 percent; the National Nucleus Project of Rubber Plantation and Processing, which will supply raw materials to tire manufacturers; and the Coal-Phosphate Fertilizer Complex Project that will cost about 50 billion birr, he said.

“The investments are only to encourage the private sector,” Wondafrash said. “If the private sector fully engages we will pull out by transferring.”

Strategic enterprises that the agency will retain include Berhanena Selam Printing Enterprise, Mugher Cement Enterprise and Comet Transport Enterprise, he said.

To contact the reporter on this story: William Davison in Addis Ababa at wdavison3@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net


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