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Business Opportunity: Ethiopia’s Agro-Processing Industry Faces Packaging Shortage

Business Opportunity: Ethiopia’s Agro-Processing Industry Faces Packaging Shortage

Ethiopia’s fast growing agro-processing industry is facing a major packaging shortage, a government official said on Monday.

Mebratu Meles, state minister of industry of Ethiopia, said while the government has encouraged investment in the agro-processing industry as part of it agricultural reforms, there has been little effort to match these investments with enough packaging.

“Even though agro-processing has been growing fast in the past years, the packaging industry is lagging behind,” New Business Ethiopia quoted Meles telling delegates of German companies specialized in food stuff processing packaging.

The East African nation, which has one of the fastest growing economies in the region and has averaged an 8 percent growth over the last decade, has  been promoting investment in agro-processing as one of the major sectors with huge potential of adding value to its agriculture sector.

Over 80 percent of the country’s 97 million people depend on agriculture for sustenance. The sector contributes over 40 percent to the GDP.

“As part of transforming our agriculture, we have now divided the country into 17 agro-processing corridors(industrial parks). Out of this, we expect to commence the construction of four by next October,” Meles said.

Ethiopia, which is ranked 146 on the World Bank’s ease of doing business index, provides some of the most attractive investment incentives for investors looking to set up in the country. The country offers tax free import of machinery, exemptions on export duty and free lease hold on some lands.

According to the Federal Ethiopian Investment Commission, over 11,000 foreign investors and joint venture (local with foreign) were registered to invest in agro processing in Ethiopia between 1994 to July 2015, though less than half of them have set up business in the country.

Germany, through it consulate in the Ethiopia, has brought 17 companies specializing in manufacturing and supply of food processing and packaging machineries, to show case their products to agro-processing firms in Ethiopia.

“We are here to learn about the industry in Ethiopia and introduce our technologies,” said Richard Clemens, managing director of VDMA Food Processing and Packaging Machinery Association, which supplied machineries worth 518 million Euros  to Africa last year, 7 percent of their global export volume.

“German’s food processing and packaging technology reduces food loses and are economical environmental friendly and sustainable,” he added.