Jun 27 , 2020

A Chinese company is set to build a wood processing plant in Debre Tabor town, 324Km from the capital, with an investment of five million dollars.

Wu Ke Song Wood Products will process plywood and chipboard, sheet lumber made from real wood and resins that are heat pressed into flat usable sheets. It will have a capacity of processing 2,000Sqm of wood a day and is expected to supply value-added products to the local and international market.

For the construction of the plant, the company signed a 70-year land lease agreement with Debre Tabor City Administration two weeks ago. The plant will process wood products, mainly plywood and chipboard, from raw material that will be sourced locally.

The company leased the 30,000Sqm plot of land for 54.45 Br a square metre and paid half of the value up front, according to Chen Shuren, one of the four owners of the company, which is expected to create 150 to 200 jobs.

The construction of the plant will be started as soon as a contractor is hired, according to Chen, who has already contracted architects from the City Administration to work on the design of the plant.

The company intends to import machines from China after finishing the construction of the plant. The owners also plan to commence operations within the completion of the construction of the plant.

"There are not many investments in Debre Tabor, so this project will encourage businesses to invest in the area," according to Agmasie Gebeyehu, industry and investment office leader at Debre Tabor City Administration.

Wu Ke Song Wood Products will be the second large-scale investment in the area next to Abay Industrial Development S.C., a public-private firm established with four billion Birr in capital raised from close to 400 founding shareholders that is also constructing a timber processing plant in Debre Tabor.

At the industrial park in the area, there are 47 different projects that have a total initial capital of 829 million Br. The companies received land last year to produce flour, sponges, animal fodder and detergents, among other products. The companies are expected to create job opportunities for over 4,000 local people.

Out of the total projects, the industrial park has now eight fully operational factories engaged with the making of flour, detergent, sponge, animal feed and wood products.

“Debre Tabor is an ideal place to source raw materials for plywood and chipboard wood products,” said Agmasie.

In the last fiscal year, the national forest coverage was estimated to be 17.4 million hectares. The highest forest base areas, which cover 93.5pc of the total area, are found in the Amhara, Oromia, and Southern Nations, Nationalities & Peoples' regional states.

The new dry port in Wereta, in northern Gonder of Amhara Regional State, is a good opportunity for the company to export its products, according to Chen. The dry port, which was built for 90 million Br, is anticipated to help facilitate Ethiopia’s trade with Sudan. It will rest on three hectares of land and be able to accommodate 1,000 containers at once.

Getie Andualem (PhD), a marketing expert and an associate professor at Addis Abeba University, believes that the company will be beneficial in terms of getting raw materials and manpower.

Getie fears that the electric power shortfalls across the country might be a problem for the factory.

"It'll encourage local investors to venture into this sector, as well as bring about technology transfers," he added.

PUBLISHED ON Jun 27,2020 [ VOL 21 , NO 1052]

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