Ethiopian Business Review

Industry Zones, One at a Time Featured

Industry Zones, One at a Time e-eiz.com

Worku Girma spent nearly two years looking, unsuccessfully, for work after graduating in Law from Wollega University, one of the recently established higher institutions in the country. Back then, he would probably never have imagined that he would be a designer at a shoe factory for a Chinese company. Yet, that was what happened after he completed three weeks of training the company gives for new employees. He currently works for Huajian International Shoe City, which is one of the companies nested in the Eastern Industrial Zone.

Established by a conglomerate of Chinese companies, the Eastern Industrial Zone cost USD 180 million to develop. It sits on 500 hectares of land, some 35 km South East of Addis Ababa near Dukem town. It is the first industrial zone of its kind but the country aspires to create more.

The zone is intended to host about 80 plants that correspond with the goals of Ethiopia’s Industrial Development Strategy. This plan calls for attracting and supporting industries that are labor intensive, export oriented and based on agriculture. The goal is to make products that can be exported using materials produced or grown locally, according to Xu Yang, communication officer of the Industrial zone.

The facility has access to high voltage electricity (100MW), telecom services, a water supply and high quality roads, interlinking each block with the main highway.

The First Industry District is an area of the zone designed for heavy industries. It has five modern industrial edifices, each covering an area of 10,000 sqm, with sound-proof structures and moving cranes. Four of the buildings in this zone are currently occupied by businesses making shoes, assembling cars and running a bonded warehouse.

Huajian International Shoe City has rented two of these blocks to manufacture shoes that are exclusively earmarked for the US market. The company, established with USD 10 million of investment capital and with an annual turnover of more than USD 150 million, has created more than 2,300 job opportunities.

Huajian shoe city, one of the manufacturing establishments in the Eastern Industry Zone.
Photo: e-eiz.com

Like Worku, many of his colleagues that work at the company are college graduates, who are optimistic about their future careers. Despite the meager ETB 900 monthly salary, they are optimistic that the skills they are learning and the experience they are gaining will make them highly sought after in the future.

Abera Lema works as an assistant in the public relations department at the Eastern Industry Zone. The technology transfer and the work discipline his compatriots are garnering in these industries excites him. “Though there have been minor misunderstandings that occur due to cultural differences, many young Ethiopians are learning a lot from the Chinese engineers and experts,” he told EBR.

“In addition to creating job opportunities, The Eastern Industry Zone is helping spur local development and contributing to Ethiopia’s industrial takeoff,” said the Zone’s communication officer.

“As the first industry zone in Ethiopia, it plays a significant and exemplary role in the establishment of similar facilities in the country,” she wrote in an email to EBR.

Another section of the zone, The Second Industry District, is reserved for light industries. It has six factory sheds, each covering 10,000 sqm. There are three endeavors here; producing garments, assembling motors and packaging goods.

Lifan Motors, one of the well known car assembly companies in the nation, will be the new addition to the industry zone shortly, according to the assistant public relations officer.

However, not everything is rosy in the industrial zone: complicated bureaucracy, lack of support particularly in the lower level local administration and frequent power interruptions are among the main challenges the factories in the Eastern Industry Zone face.

Mr Wie Yong Quan, General Manager of Huajian shoe factory agrees; “We couldn’t even fire some of the workers when they demonstrated bad discipline and replace them with people waiting outside because the local administration would not let us,” he told EBR.

The government has designated several locations for industry zone use. To accommodate this plan, the Ministry of Industry has received 243 hectares of land in Akaki Kality sub city from the Addis Ababa City Administration and 1,051 hectares from the Dire Dawa City Administration. Other plots of land in Kombolcha, Mekele and Hawassa have also been set aside for the same purpose.

The Bole Lemi Industrial Zone, on the outskirts of Addis Ababa covers 156 hectares. The development of this site is expected to cost an estimated ETB 900 million and will create 37,000 jobs when become fully operational in a couple of months. These industrial zones are will target endeavors with strong inter-industry linkages and those that have been prioritized by the government; including textile, leather processing, agro processing, metallurgy and pharmaceutical manufacturing.

Companies from abroad are also asking for land to build their own industrial zones. South Korean garment producers, and businesses from Turkey, China and Egypt have been considering similar projects. Huajian shoe factory, also has plans to invest USD two billion to build a new manufacturing city on 320 hectars of land in Lebu, on the outskirts of Addis Ababa. EBR

Berihun Mekonnen

EBR Staff Writter

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