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China's Geely Cars May Be Manufactured in Ethiopia by 2017
By William Davison
Nov. 13 (Bloomberg) -- Ethiopia’s Mesfin Industrial Engineering Plc, a company linked to the ruling party, expects to build cars for China’s Geely Automobile Holdings Ltd. within five years, General Manager Habte Hadish said.
Mesfin Engineering, which is based in Mekele, 504 kilometers (313 miles) north of the capital, Addis Ababa, is now assembling six cars a day for Geely and wants to move into full production, he said. “Cars will be manufactured in Ethiopia,” Habte said in an interview in Addis Ababa today. “This can happen in the coming three to five years.”
Mesfin Engineering is part of the Endowment Fund for Rehabilitation of Tigray led by Azeb Mesfin, the widow of former Prime Minister Meles Zenawi. Effort, as the conglomerate is known, has interests in construction, cement, trucking and textiles. The Tigray People’s Liberation Front, led by Meles until his death in August, established the company in 1995 by amalgamating assets it acquired during a 17-year insurgency.
The TPLF is one of four parties in the ruling Ethiopian Peoples’ Revolutionary Democratic Front that has led the government since overthrowing Mengistu Hailemariam’s military regime in 1991. Mesfin Engineering’s revenue grew about 19 percent to 620 million birr ($34 million) in the year to July 7, Habte said. The company has forecast 1 billion birr in sales this fiscal year, he said.
The company designed and produced around 400 truck trailers last year and has the capacity to build more than 2,000 a year, Habte said. It also assembles tractors for International Tractors Ltd., part of the Hoshiarpur, India-based Sonalika Group and India’s third-largest maker of the farm vehicles.
Mesfin Engineering has built leather, textile and coal-fired power plants for Effort companies and a government fuel depot, he said. It has signed contracts with the Industry Ministry to help build a garment factory near the capital and with the state-owned Sugar Corp. for a 100-million birr “tissue culture” nursery in the South Omo region primarily to produce plants for cane plantations.
The company expects its business from state enterprises to increase as the government has many large projects and wants to “enhance the local capability” in engineering, Habte said.
Ethiopia, the continent’s second-most populous country, plans to spend 144 billion birr in the current fiscal year on industries including transport, telecommunications, sugar, energy and housing in the third year of a five-year industrialization plan.
The government, which recorded a trade deficit of $7.5 billion last year, operates a state-led development model that targets public and private investment in value-adding areas such as manufacturing and engineering in order to diversify an economy dominated by agricultural commodities.
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