Addis Fortune, Ethiopia
March 27, 2007 Tuesday
Ethiopia;
Agency Approves Three Enterprise Privatisations
The Privatisation and Public Enterprises Supervisory Agency (PPESA)
has passed a decision to privatise three state enterprises with a
total cost of 34 million Br.
The Agency had floated a tender to privatise Adea Flour and Pasta
Factory, Yerer Flour SC and Debre Zeit Pig Farm but only one
interested candidate showed up for each of the enterprises.
The Agency’s decision to sell to those bidders that showed up to the
tender process, began with the sale of Adea, to Aynalem Abdulkedir, a
local investor who presented a bid amount of 19 million Br.
Aynalem and the Agency signed the agreement to finalise the sale of
the factory on April 15, 2007, after being notified that her offer
had been accepted. She has paid the required 35pc of the sale price
and will pay the remaining 65pc over the coming two years, according
to the agreement.
Adea, located in Debre Zeit (Bishoftu) 45Km east of Addis Abeba, was
established in 1967 by the Benesnilian family, Armenian investors
that moved to Ethiopia. The family continues its business in the
country, with the sons having established Hagbes, a major import firm
in the country.
The factory, established with a capital of 1.1 million Br, was run
using Italian and British machines that were purchased at a cost of
440,408 Br by the Armenian investors. In 1975, the factory was
nationalised by the Derg military regime.
While under the control of the state, a significant investment of 6.3
million Br in expansion projects was conducted. The factory’s balance
sheet shows that the company has annual revenues of 25 million Br and
the capacity to produce 362qt of flour and 42qt of pasta a day.
Yerer Flour SC, the other company that was put on the auction block,
found interest from Anwar Abdulkadir, the only investor to enter a
bid. The agency accepted his 10 million Br offer and informed Anwar
that he had been chosen for the sale, although an agreement between
him and the Agency is yet to be signed.
Yerer Flour SC, established 32 years ago, is located in Nazaeth
(Adama), 100Km east of Addis Abeba. Situated on the route from
Nazareth to the popular Sodere Resort, the factory employs 108
workers and produces 6,728tn of flour annually.
Debre Zeit Pig Farm, resting on an 11hct plot in Bishoftu town, the
third enterprise that PPESA decided to privatise, only captured the
interest of Mekia Enterprise, which offered five million birr.
Although the Agency has informed the Enterprise that it has been
selected for the sale, they have yet to sign an agreement.
Mekia Mamiyo, general manager of Mekia Enterprise, told Fortune that
they have not decided to take the Agency up on the offer that it has
made.
Mekia explained that the Enterprise wished to purchase the pig farm
to augment the bid that they had put in for the Dairy Enterprise,
another state owned institution that is being privatised by the
Agency.
"We wanted the farm so that we would be able to raise cattle for milk
supply for the Dairy Enterprise," said Mekia. "Until we know the
decision of PPESA regarding our other bid, we are not going to
respond to their offer."
Mekia Enterprise, along with five other contenders, bid in the tender
that was floated by PPESA to sell the Dairy Enterprise two months
ago. Known for its brand milk Shola, the Enterprise attracted high
bids from the interested candidates.
Although Mekia Enterprise made the highest offer of 47.7 million Br,
the Agency’s Tender Committee chose Kangaroo Plast, which offered
46.5 million Br.
When the Committee’s decision was passed on to the Board of the
Agency for approval it asked that another suggestion be made so it
could re-evaluate.
The sale of this enterprise is yet to find a solution.
Mekia Enterpirse, established by Mekia and members of her family, now
has 300 million Br capital, and has been involved in agriculture,
floriculture and livestock rearing for the past 27 years.