Alden Capital & EWF Flowers in the Press – “The long march of Ethiopia”

NZZ, Ethiopia, October 14 2014

 

Alden Capital and EWF Flowers is mentioned in the article “The long march of Ethiopia”, analyzing Ethiopia’s transformation from an agrarian to an industrialized company.

Source: Neue Zürcher Zeitung
Date:  October 14, 2014

(Summary)

The article includes perspectives on the Ethiopian shoes, leather & textiles industries’ progress on the basis of inexpensive labor, low energy costs, attractive initial taxation, political stability, generally safe environment and easily accessible land. Challenges, however, still prevail, e.g. productivity and relatively high logistics cost for reaching the European market out of Addis Ababa. A new railroad to the port of Djibouti should though decrease costs going forward, making Ethiopia competitive in comparison to Bangladesh.

Support of the shoes-, leather- & textiles industries is prioritized by the Ethiopian government as domestically sourced production inputs (cotton and animal skins) could be used, instead of these being exported out of the country on an unprocessed basis.

Despite the remaining challenges, foreign direct investments are increasing tremendously, creating an enormous amount of new jobs. Foreign investors not only invest in the textiles- and leather industries, but have in recent years also provided a boost to the flower & plants industry. The climate of the highlands allows multiple crops of cut flowers and seedlings per year, and around Addis Ababa there is no shortage of rainfall, decreasing the extent of needed  irrigation. The proximity of the international airport of Addis Ababa guarantees the export of cut flowers and seedlings, with very short time to reach the Dutch market.

“Murwayi Humphrey, Manager of Ethiopian World Flowers (EWF), a company in Dima – 25 km Located outside the capital – which is majority owned by Swiss Alden Capital – … says the flower and plant production in Ethiopia is developing well and is now in competition with the Kenyan market – not least because of the lower labor costs and good climate, making the use of heated greenhouses unnecessary”.

The article continues, mentioning the emergence also of the Ethiopian technology- and pharmaceutical industries, explains the developing trade relationship between Ethiopia and Switzerland, and highlights the increasing interest by Swiss businesses (e.g. Nestlé and Novartis) in setting up operations in the country, which is growing continuously and above average.

Constraints remain, however. The state is still not willing to open certain parts of the economy to foreign investors, e.g. telecommunications and the financial industry, consequences being that the telecommunication system in most parts of the country is outdated and that prices because of a virtually non-existent competition are high. The restrictions in the banking sector are likely to be partly responsible for the lengthy and complicated process for Ethiopian businesses in obtaining a loan. And, finally, an opaque legal framework leaves the floodgates open for abuse of office and corruption.

The article (in German) can be accessed here, and more information about EWF Flowers can be found here.