The development of industrial parks is one of the activities that have been given attention to contribute to the realization of structural economic transformation. Industrial parks have three main basic missions. Their missions are to attract foreign direct investment, expand job creation and carry out technology transfer.
The parks will make a great contribution to the national economic development by creating jobs for the community living in the areas where they will be built and creating an environmentally friendly working atmosphere. Among the things that make industrial parks preferable are the fact that they provide many services in one place, build appropriate infrastructure and connect them with other manufacturers.
From this point of view, efforts have been made to encourage large international companies to open their factories in Ethiopia by establishing many industrial parks as well as providing manpower and electricity supply with reasonable payment, tax-free importation of machinery, credit provision, one-center service and infrastructure construction.
Currently, there are 13 industrial parks built by the government all over the country, and they are contributing significantly to the growth of the national economy through job creation, foreign direct investment attraction and technology transfer. Since the parks have better infrastructure provision and service delivery, the number of companies operating in these industrial parks is growing by combining their resources in joint ventures.
EZM Trade and Investment, a local company, has 27 years of experience in producing plastic pipes in a joint venture with China’s Foshan Rifeng Enterprise Limited Company. A factory that enables the production of plastic pipes in the country has recently started operations in the Adama Industrial Park. The partnership of “EZM” and “Refo” is said to enable the two companies to manufacture “Refo” products locally and supply them to the Ethiopian and international markets.
The factory, which was built on a three thousand square meter land in the industrial park, was built at a cost of 14.5 million Dollar. It is also said that the factory is working with a plan to substitute the imported plastic pipe product in the country and to supply it to the foreign market. The partnership between the companies will enable the production of modernly designed, high quality and environmentally friendly drinking water and sewage pipes.
The factory annually produces up to two million metric tons of Polypropylene Random Copolymer (PPR) pipes, one million nine hundred thousand PPR joints, one million metric tons of Polyvinyl Chloride (PVC) drainage pipes, nine hundred thousand PVC joints and it has the capacity to manufacture three point five million meters PVC Conduit Pipes.
The CEO of “EZM” Trade and Investment Company, Esmelalem Zewdie Mergia, pointed out that the company started working in a short period of time. He said that he trained workers and installed machines within six months of renting a shed from the industrial park.
According to his explanation, the products of the factory are pipes used as a resource for construction work, and they will enable to achieve the goal of substituting the imported plastic pipe with domestic production. The factory can completely substitute imported plastic pipe with domestic production at its current capacity. The factory produces products worth 17 million Dollar a year, and plans to export 50 percent of the products.
The CEO said that the factory produces plastic pipes that meet international quality standards. Adding he said that the products produced in the country are the same as the products produced in China and offered to the foreign market and has the same quality assurance. Esmelalem also explained that the company’s move to Adama Industrial Park has brought many benefits.
“The factory operates 24 hours a day in three shifts and has created permanent employment for 200 people. It has provided more job opportunities for 400 citizens through business linkages and other options. The factory is expected to create more job opportunities as its production capacity increases. The company has the potential to become a reliable and preferred plastic pipes and fittings manufacturing company in Africa.
“Refo” International Manager Jason Chan, on his part, mentioned that the company has many years of experience in producing plastic pipes and is expanding its operations in many countries around the world. He said Ethiopia is the company’s second destination in Africa after South Africa. He pointed out that the country is one of the preferred investment destination countries and is the company’s choice. The company will produce and market high-quality products in partnership with “EZM”.
Gulilat Abebe, Manager of Adama Industrial Park, said that the factory installed machines and trained workers in a short period of time. He added that the products of the factory are very important resources for the sector as Ethiopia’s construction sector is growing rapidly.
Gulilat also said that in the past four years, more than 50 million Dollar has been earned from products produced in the park and offered to the foreign market. “Income from the products offered to the foreign market can be combined with the income from the products offered to the domestic market, and it can be seen that the industrial park is generating significant economic benefits,” the manager said.
As he said, the Park has created job opportunities for more than eight thousand citizens. There are now 13 manufacturers in the park; when all these start production, the income from foreign currency and domestic transactions and the job opportunities will increase.
The general manager said that apart from the production, job creation and technology transfer activities that manufacturing companies in the park regularly perform, they are also performing various activities in fulfilling their social responsibilities. “The companies have the necessary understanding that they should pay attention to fulfill their social responsibilities,” Gulilat said, and in order to benefit the local community, the investors have renovated schools and provided educational materials for students.
Aklilu Tadese, CEO of the Industrial Parks Development Corporation, said, “The joint venture between EZM and REFO is an indication that the business model in which foreign and domestic companies work in joint-venture is showing growth.” He also stated that the increasing interest of local companies to enter the industrial parks and engage in production indicates that the companies’ production capacity has increased and their ability to be competitive with international organizations is achieving results.
He said that in addition to the contribution of the companies that enter the industrial parks and create employment opportunities for many citizens, their role in realizing the transfer of technology and knowledge will be greater. As to him, companies that enter and develop industrial parks will ensure that there is technology transfer and that production activities are supported by technology, while maintaining the benefit of creating employment opportunities for citizens. Thus, they help production operations to be efficient and effective.
According to the CEO, in the last four years, more than 1.1 billion Dollar was earned from the products produced by the industrial parks and exported to foreign countries. Through import substitute products, 550 million Dollar was saved. From the industrial parks built in different parts of the country, textile, agricultural, plastic and other products are being offered to the foreign market.
In addition to this, the CEO said, “In order to augment the investment sector, high-quality and internationally competitive services are being provided in the industrial parks”, and adding that the corporation will provide prudent monitoring and support for local and foreign companies to enter and produce in the industrial parks. He called upon investors to enter the industrial parks that have many advantages and opportunities and engage in investment activities.
In order to achieve the structural economic transformation that Ethiopia is making towards industrial economy by using its potential in industry and increasing the income from this sector, it is necessary to amplify and improve the manufacturing sector many times over the current performance. The growth of the manufacturing sector can be improved along with the expansion of investment.
Industrial parks create favorable conditions for the expansion of investment by implementing one stop service center. Therefore, it is necessary to achieve the structural economic transformation by solving the problems faced by the industrial parks and improving their performance.
It is necessary to prepare and effectively implement post-war investment stimulation strategies that can guarantee the revival of the investment sector so that the industrial parks that were in the war zone can return to their production activities at their full capacity. In this effort, it should not be forgotten to give special support to local investors and local organizations working in partnership with foreign companies.
BY BACHA ZEWDIE
THE ETHIOPIAN HERALD THURSDAY 14 DECEMBER 2023
