Fortune News | Mar 14,2020
Oct 19 , 2019
By ELIAS TEGEGNE ( FORTUNE STAFF WRITER )
In an attempt to save foreign currency, Hora Adama Automotive Assembly Arena, an assembler of three and four-wheel vehicles, announced a partnership with Horizon Addis Tyre to buy locally-manufactured tyres.
Horra, which would otherwise spend eight million dollars a year to import tyres with accessories from India and China, signed a long-lasting tyre supply agreement with Horizon Addis. Akalewolde Admasu, CEO of Horizon Addis and Adem Kedir, founder and CEO of Horra, signed the deal last week at a ceremony held at Horra's headquarters.
Samuel Halala, director-general of the Chemical & Construction Inputs Industry Development Institute, attended the agreement signing ceremony.
In May 2018, Horra inaugurated an assembly plant in Adama town, Oromia Regional State. Hora Adama Automotive Assembly Arena (H4A) was built for an investment of 750 million Br. The plant assembles the three-wheel Maxima Bajaj, the four-wheel Qute Bajaj and the three-wheel Cargo Maxima Bajaj. The plant assembles 30 four-wheel and 150 three-wheel Bajajs in eight hours.
After the inauguration of the plant, the company had been importing tyres, according to Solomon Habtamu, the motor director at Horra, a company which operates under Horra Corporate Group. The Group was established in 2005 and exports coffee, offers logistical services and is engaged in the real estate business.
Horra normally spends about two million dollars to import tyres for the vehicles that it assembles and six million dollars to import spare tyres a year.
Horizon Addis Tyre, formerly known as Addis Tyre, was established over three decades ago and went through many owners before finally being acquired by Horizon. In 2004, 61pc of its shares were acquired by Slovak Matador Tyre, which later renamed it Matador Addis. Then four years later, Matador sold half of its shares to the German-owned company Hanover.
Finally, in 2011, Horizon bought the shares of the two companies as well as the remaining shares owned by the government. Horizon Plantation, which was established in 2009, has invested 800 million Br in Matador.
Horizon Addis released a new batch of tyre products for three-wheel passenger vehicles, agricultural vehicles, off-road and industrial vehicles. Additionally, the company started manufacturing flotation tyres for sugar factory machinery.
Imported three-wheel tyres are sold for 1,600 Br, while the locally manufactured tyres sell for approximately one-third of that price, according to Akalewolde
Currently, Horizon produces 800 three-wheel tyres a day and plans to upgrade its production to 1,200 tyres a day within a month.
Henok Semaw, an assistant professor and dean of business and economics at Harmaya University, says local tyre production will play a significant role since three-wheel vehicles are becoming a popular mode of transportation.
In line with financial benefits, it is very valuable not only in stabilising the prices but also in saving the cost of logistics spent when importing products, according to Henok.
He justifies that the relatively low prices and the quality of the products help the company access more markets.
PUBLISHED ON Oct 19,2019 [ VOL 20 , NO 1016]
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