Fortune News | Oct 05,2019
The Financial District in the capital welcomes the construction of one more headquarters building - this time for Oromia Insurance Company.
To rest on 3,004Sqm of land, the 35-storey building will cost the company 1.5 billion Br and is expected to be completed in four years.
Having four basements, the building will be located between the premises of the Ethiopian Coffee, Tea Marketing & Development Authority and the Federal Small & Medium Manufacturing Industry Development Agency across from Wabi Shebelle Hotel.
Anchor Foundation Specialist Plc, a local firm specialised in foundation construction and known for building the United and Nib bank HQs, Marriot International and the Addis Abeba Light Railway Transit Qality Terminal, is working on the foundation work.
The company started the digging and shoring process on November 16, 2019, according to Legesse Dabesa, project manager at Oromia Insurance.
Zeleke Belay Architect Plc, another local firm in the business for over two decades that has undertaken projects including universities, hospitals and corporate office buildings in the past, won the bid two years ago to design the building and supervise the contractors.
For the construction of the structural works, Oromia Insurance has already floated a tender, which will close at the end of this month.
Planned as a multi-purpose building, it will join the already built and under construction headquarters of the banks as well as Nib Insurance, Ethiopian Insurance Corporation and United Insurance.
The construction of the building was initiated in partnership between the insurance firm and Oromia Coffee Farmers’ Cooperative Union, which is a member of the board of directors of Oromia Insurance and Oromia International Bank.
The Union, which was established in 1999 by 34 cooperatives with 22,000 members but has now grown to 405 cooperatives with a paid capital of 20 million dollars, initially planned to contribute 750 million Br to the construction of the building. However, the Union withdrew its plan.
“It wasn’t due to a conflict,’’ said Oumer Wabe, general manager of the Union. ‘‘We've decided to part ways due to the vitality of the business.’’
The new management of the Union, which has been at the helm since 2015, came to a consensus that the investment was not reasonable for the Union in terms of profitability, according to him.
Rather than investing in a building, the Union has decided to increase the number of processing plants to generate earnings, according to Oumer.
Thus, the Union asked the City Administration for land to build a coffee complex that will be used to showcase products and promote their coffee through coffee shops inside the complex, according to him.
Before withdrawing the planned investment, the management of the Union, which had been under the auspices of Tadesse Meskela, already put 15 million Br into the building.
Currently, the two parties are in the process of finalising the divorce, according to Oumer. However, officials at Oromia Insurance declined to comment on the issue.
“We have completely agreed with the insurance company, and we are ready to go through any legal procedures needed," said Oumer.
Currently, the insurance firm shares a headquarters with Oromia International Bank. The two reside in a 13-storey building that is located near Getu Commercial Centre. Located on Africa Avenue, the Bank acquired the building at a cost of 210 million Br in 2013. It originally belonged to SA, a sister company of Garad Plc.
Annually, the insurance company pays seven million Birr to Oromia International Bank as rent for the seventh and eighth floors it occupies. The two also share the second and ground floors.
Established in 2009 with 540 founding shareholders and a paid-up capital of 26 million Br , the insurance company’s assets have grown to 1.1 billion Br and gross written premium of 452.4 million Br. The insurer now has 879 shareholders with a paid-up capital of 280 million Br.
Zewdie Shebere (PhD), a lecturer at Addis Abeba University in the areas of business management and economic development, says that the construction of the building will relieve the company from rental expenses.
During the last fiscal year, the company spent 19.1 million Br on rent, which is almost a quarter of its net profit.
"The company can also use the building as a source of income," Zewdie said.
The design for Oromia Insurance Company's future headquarters, which is being built in the Financial District at a cost of 1.5 billion Br, is quite futuristic.
PUBLISHED ON Dec 21,2019 [ VOL 20 , NO 1025]
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