BY ABEBE WOLDEGIORGIS
The task of reviving the economy which hit by COVID-19 pandemic, war and locust invasion in the last two years should not be left only to the government. Rather, the involvement of the private sector is essential. Cognizant of these, Behaq Multimedia Private Limited Company and Primer Investment Consultancy PLC launched a project which lasts for five years aiming to support 500 small and medium size enterprises through creating market opportunities in Africa and all over the world and connecting with investors.
The enterprises engaged in manufacturing leather products, traditional and modern garments, wood and metal products, construction inputs, hand crafts and related items. Such practice manifests how the private sectors support each other with cost sharing which has been the burden of the government.
According to the Primer Investment Consultancy Manager, Melaku Kinfegebriel, to select the enterprises, various methods are employed and among others through getting information from local based quality assurance the institution, observing through physical contact where they are located within 150 kilometers radius of Addis Ababa and scrutinizing through agents, clients and networks from far places where the enterprises are located.
The enterprises’ products are also identified based on their quality and the demand in the market. As to Melaku, the project mainly focuses on what the enterprises do in the future. It is assumed that they have their own capacity and potential and the project’s role is supporting them to stand by their own. The project intends to find market, financial support and facilitates loan.
Andualem Sisay is the manager of Behaq multimedia. As to him, the project will be implemented over the coming five years 2022-2026, with a total investment of 3.4 million USD as per the partnership agreement the two companies signed. The selection of the first 500 SMEs engaged in producing high quality products has been carried out jointly by the two companies. The two companies will also jointly work in forging partnerships with the relevant and potential partners from both the private sector and non-private actors. Ethiopian SMEs engaged in production of high quality and competitive products will be benefited.
Exploring the enterprises’ internal capacity and unleashing their potential is the major theme of the project. The public sector to some extent engaged in such practices but not in its full capacity because the government is pre occupied by various burning issues. Before the implementation of the project, assessment was conducted with regard to the shortcomings of the enterprises.
Among others, the strength and weakness of their internal structure; their operational system assess to identify whether they need additional human power, market and finance or not. By considering these all issues, the project will provide assistance.
Most selected enterprises utilize locally obtained raw materials as input and the best performers have the chance to advance their business and tap the local market opportunities but the main objective of the project is promoting export. In such a way, enhancing the nation foreign currency earning capacity and creating forward and back ward linkage with other sectors will be realized.
As it is vividly known, export products face high competition with other products relatively produced with better technology in the international market and unless the local enterprises produce standardized products, winning the game might be hard.
Asked how far the local industries have prepared themselves for this competition, Melaku said that one of the objectives of the project is encouraging them to produce quality products. For example, if there is a demand for leather product in the USA market, the product must be produced and exported based on the standard requested in that country. But currently, the shortage of capital hampers the industries not to unleash their potential to produce as per the quality required. If they obtain investment from foreign companies and secure money in equity, they can improve the quality of their products and supply the products both to local and foreign markets.
On the other hand, if there are enterprises specialized in leather products locally will be invited to train others so that the beginners can cop up with the required standard.
Exportation of the products to the foreign market is conducted based on the international agreements that Ethiopia is committed to be abided such as “African Trade Agreement” and COMESSA. But currently the priority agenda is developing thrust toward the other countries’ market.
They have raw materials used as inputs and technology and if they get skill from well experienced enterprises can penetrate both local and foreign markets.
If an enterprise is unable to export its products by its own capacity due to shortage of capital, the project assists to export through coordinating with other enterprises and the products can be packed and loaded with one container up to its market destiny.
It is believed that local enterprises engaged in leather production have the capacity to compete in other countries’ where there are no companies which produce leather.
As to Andualem, Behaq will also be in charge of distribution of hard copy branding materials including “the Ethiopian Products Catalog 2022: promising 500 SMEs Looking for Market and Investors”.
Following the massive global (365 days) digital marketing campaign, Primer Investment Consultancy PLC will be in charge of handling all the email, telephone and other social media communications with the interested major dealers, supermarkets, and investors are among others. Primer will also facilitate sending product samples, arranging factory visits and conducting studies, like asset valuation, and other documents required for establishment of joint ventures between SMEs and interested investors.
There are sponsors who support the efforts and producers will not be requested to pay when their products are cataloged. But the cost of cataloging is very expensive and the project works as much as possible to realize its objectives. To date, with the support of sponsors, thousands of copies of catalogues are printed and posted in public organizations, hotels and other public areas locally.
As to Melaku, the very challenge of the project is shortage of capital and as mentioned above, without the support of sponsors cataloging the products was not realized and still they need more support in terms of finance and consulting.
The task of the digital cataloging is advertising the products to foreign customers. It also has sample pictures and when the products are preferred by customers the quality status will be certified.
The products will be advertised through various digital media’s and the investor’s data also kept by the project. So far, foreign investors showed interest to purchase the products but the amount of products of small scale enterprises may not satisfy their demand. Therefore, the project was planned to combine many enterprises in one so that scaling up the volume of the product will be possible.
The Ethiopian Herald June 16/2022
