Fortune News | Mar 02,2019
Huajian Dongguan Hua Bao Shoes Co Ltd increased the number of industrial parks it operates to two by adding Jimma Industrial Park to its list.
The Chinese firm has fully leased out the entire industrial park built in Jimma, Oromia Regional State. The lease term is 15 years with a down payment of 200,000 dollars, and the nine sheds at the Park will be used for the production of garments, shoes and leather products.
Though the primary contract is for 15 years, the lease agreement will be reviewed every four years, according to Lelise Nemie, CEO of the Industrial Parks Development Corporation, who signed the agreement last week along with Huarong Zhang, president of Huajian.
“We're happy to be working with such an open government,” said Huarong during the signing ceremony. “Our company is certain that it will get good returns on its investments because of recent positive actions by the government on economic issues."
The park hosts nine completed sheds, four of which cover 5,500Sqm, while the rest occupy 3,000Sqm. When fully operational, the park is expected to create 15,000 jobs. Jimma, located 350Km southwest of the capital, is the eighth industrial park among 11 the Corporation has undertaken to construct at an estimated cost of 30 billion Br.
Currently, Huajian owns and manages an industrial park located around Lebu, Nifas Silk Lafto District on the outskirts of Addis Abeba. The park sits on 138ha of land and has 11 permanent and six temporary sheds, which are all occupied. When construction in the Park is completed, which the company foresees in 2020, it will have 50 sheds that can be rented out.
In Huajian's park, four companies are operating and another company is finalising the necessary steps to join the park soon. The companies in the park engage in producing shoes, garments and the assembly of electronic products. In its industrial park, Huajian operates a shoe manufacturing factory, which receives its raw materials from another Huajian factory located in Kombolcha Industrial Park.
Jimma Industrial Park was inaugurated last December by Prime Minister Abiy Ahmed (PhD) alongside the presidents of Djibouti and Sudan. Lying on 75ha of land, the Park was constructed by China Communications Construction Company (CCCC) with an investment of 61 million dollars.
Construction of the park was expected to take nine months but took twice as long, because settling relocation compensation for residents took longer than planned, according to Lelise.
Inside the Park, Huajian will set up coffee processing plants on 45ha of land and build new sheds to lease to other investors. The company has agreed to build a vocational training centre that will train workers to be hired in the Park.
“We know that Jimma and its surrounding area is endowed with huge coffee resources. That is why we are planning to have a coffee processing hub there," said Huarong.
Consumption of coffee in China has been showing a steady increase in recent years, according to Abebe Abebayehu, Commissioner of Ethiopian Investment Commission.
"Having coffee processing hubs can help Ethiopia tap into the ever-growing Chinese market with a value-added commodity," Abebe elaborated.
Deals to transfer the management of a government-owned institution to private sector operators should be taken as an opportunity to transfer knowledge and skill, according to Tadesse Getu, a lecturer at Addis Abeba University's School of Commerce.
“Officials at the Corporation should work closely with the Chinese management, so that they will closely monitor their progress and to see if there are any lessons they can learn and implement elsewhere,” Tadesse explained.
PUBLISHED ON Jun 01,2019 [ VOL 20 , NO 996]
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