News Alert: Kenya tuna lala vi major

Ethiopian Military-Run Company Seeks More
Foreign Partners
by William Davison
February 18, 2013 — 3:32 PM AST
fShare on Facebook tShare on Twitter h
Feb. 18 (Bloomberg) -- Metals & Engineering
Corp., an Ethiopian military-run corporation,
said it plans to partner with more foreign
companies as it spearheads a government-
drive to develop industries in Africa’s second-
most populous nation.
METEC, as it’s known, is already working with
companies including Alstom SA, Europe’s
second-largest power-equipment maker, U.S.-
based solar-panel manufacturer Spire Corp.
and China Poly Group Corp. on engineering
and manufacturing projects. Some of the
company’s budding industries, like vehicle-
assembly and engineering businesses, may
generate more than 20 billion birr ($1.1
billion) of revenue a year, spokesman Michael
Desta said in an interview.
“We’re doing this in collaboration” with foreign
companies, he said on Feb. 15 in the capital,
Addis Ababa. “We want to learn from them.”
Ethiopia is using one of Africa’s largest armies
to help develop an economy that grew an
average 8.7 percent over the past five years,
according to the International Monetary Fund.
The country operates a state-led development
model that targets public and private
investment in value-adding industries in order
to diversify an economy in which agriculture
accounts for 46 percent of total output.
The government is in the midst of a five-year
plan in which it’s spending 569 billion birr
until 2015 on projects including the $5 billion
Grand Ethiopian Renaissance Dam, which
would be the site of Africa’s biggest
hydropower plant.
Military Efficiency
“The military happens to be relatively efficient,
disciplined and well organized to be entrusted
with such grand projects,” said Merkeb
Negash, a lecturer in political science and
international relations at Jimma University in
Ethiopia.
Ethiopia’s armed forces numbered about
200,000 in November 2011, making it one of
the biggest on the continent, according to
Global Security, the Washington-based
research company. Officers connected with the
rebel movement that overthrew the country’s
military regime in 1991 dominate senior
positions in the government, it said.
Former Prime Minister Meles Zenawi, who
ruled Ethiopia for 21 years before he died in
August, may have created METEC to give the
military a “stake” in the economy, said
Merkeb. “Now the military will always defend
the system whatsoever,” he said in an e-
mailed response to questions on Feb. 6.
Grand Renaissance
The Ethiopian Electric Power Corp. contracted
METEC to build the electro-mechanical works
for the $5 billion Grand Ethiopian Renaissance
Dam on the Blue Nile River in partnership with
Alstom. The Paris-based company will provide
eight turbines and generators for 250 million
euros ($333 million) to METEC and
commission the plant.
METEC is also building the 50 billion-birr Coal
Phosphate Fertilizer Complex Project in
Illubabor Zone of Oromia Region for the
Privatization and Public Enterprises
Supervising Agency, and is the main
contractor for the Sugar Corp., a government
enterprise that’s building 10 cane plantations
and processors nationwide at a cost of about
$5 billion, Michael said. The fertilizer project
will be transferred to the newly formed
Chemical Industry Corp. when it’s finished, he
said.
The organization is involved in “priority areas
and import-substitution,” Deputy Prime
Minister Debretsion Gebremichael, who is
responsible for economic coordination, said in
a Jan. 23 interview. “They cannot do it by
their own so they look for partners,
international as well as local. They’re bringing
many actors to the picture but at the heart of
everything it’s METEC.”
Vehicle Manufacturing
METEC was established in June 2010 with 10
billion birr of capital by grouping nine
businesses previously owned by the Defense
Ministry, including Dejen Aviation Industry and
Gafat Armament Industry, Michael said. Six
other industries, including plastic, tractor and
vehicle spare-parts manufacturers, were
transferred to METEC from the privatization
agency and it now operates as many as 75
factories nationwide, Michael said.
While the company still manufactures military
equipment, it has “radically shifted” to civilian
products and is accountable to Prime Minister
Hailemariam Desalegn, said Sebhat Nega,
executive director of the Ethiopian
International Institute for Peace and
Development.
METEC is overseen by a board headed by
Defense Minister Siraj Fergessa, Michael said.
It employs about 13,000 people, including
more than 1,000 engineers, he said.
Siraj in September opened a 200 million-birr
factory in Modjo, 70 kilometers (44 miles)
southeast of Addis Ababa, that will make
turbines, generators and high-voltage
electricity-transmission cables, according to
state-owned Ethiopian Radio and Television
Agency. A METEC arms factory was opened
the same day, it said on its website.
Poly Technologies Plc, part of the Beijing-
based China Poly Group, is building truck-
assembly plants in Modjo and Bishoftu for
METEC, Xinhua reported on Sept. 27.
“In the future we will avoid importing
everything but the engine,” Michael said.
“Maybe in the future the engine will be
produced here.”
To contact the reporter on this story: William
Davison in Addis Ababa at wdavison3@
bloomberg.net
To contact the editor responsible for this
story: Antony Sguazzin at asguazzin@
bloomberg.net