News Article

Food Development Corporation Brings $250 Million Investment to Ethiopia

Reprinted from the Addis Tribune

Six months after it sent the first team to Ethiopia to determine if the investment environment was conducive to setting up a modern agro-business industry, high level officials of the Food Development Corporation (FDC) are negotiating with Ethiopia to finalize the largest agro-business complex in the country.

In an exclusive interview with Addis Tribune, Henry H. Kartchner, FDC Chairman and CEO, said FDC is negotiating with Ethiopia to take a total of 25,000 hectares of land located adjacent to Awash National Park, east of Addis Ababa for the development of an agro-business complex, that encompasses agriculture and a cattle raising project for the export of processed meat.

The Houston, Texas, based company is the world’s largest agro-business firm operating in a number of countries across the world.

According to Christopher G. DeClaire, FDC Director for Finance, when the first team was here in September last year, they signed a Memorandum of Understanding (MU) with the Ethiopian Investment Authority and the current visit of the officials was to finalize the MU and negotiations to start the feasibility study.

FDC officials, who are here with an Ethiopian, Gezahegn Kebede, President of the Ethio-America Trade and Investment Council (EATIC), have met with government officials at various levels. The visiting officials conferred with President Girma W. Giorgis, Abi Wolde Meskel, General Manager of the EIA, Tadesse Haile, Minister of State at the Ministry of Trade and Industry and officials of the Ministry of Agriculture.

During the discussion they held with President Girma, the latter expressed his government’s commitment to support the FDC to realize the project. Gezahegn said that the visiting FDC officials had held various constructive dialogues with officials. Officials of the Ministry of Agriculture also briefed FDC officials on the general situation of agriculture in the country.

FDC Wants Lease-Free Land
Asked to comment on the procurement of the 25, 000 hectares of land, they said they had not yet made the final decision on the issue. They would be honouring the laws of the country to acquire the land.

Christopher said that FDC would be considering a long-term lease for an estimated 99 years. “If they would change the land ownership laws, we would consider purchasing it,” he said.

Gezahegn, however, argues that FDC should be offered a lease-free land and the team would also be exerting efforts to acquire the land lease free. “This is not an easy investment. We are hoping that we will have a favorable term for the lease. In fact, we are not only leasing it, we are pushing the government to give us the land lease free,” he said, adding that during their discussion with government officials, they would be flashing the issue out.

Integration and Employment
Christopher said that when the project became operational at the end of 2004, in addition to the 100, 000 direct employees the company is envisaging to hire, close to 1.6 million ancillary workers would be involved in the whole project.

One of the major steps FDC is due to take is the feasibility study, which would encompass the outlining of the complete picture of the whole project. According to Christopher, part of the feasibility study will take “deep concerns and interests” of the local cultural and social issues of the area. “We like to be good neighbors and the basic feeling of the operation would be what we contract with the local firms,” he said.

Part of the review during the feasibility study, according to C. Brent Kartchner, FDC President and son of the CEO, is to examine the complete environmental picture of what is going to happen during the production stage. The feasibility study would also help them to make sure what type of crop and/or animal would be suitable to the area. “We work to make sure that our project would fit the surrounding area without disturbing anything and without causing environmental problems. It has to be state-of-the-art and the latest operation out there…” Brent said.

The project would also have a center where the local farmers would be trained to produce different types of crops that the center needs, according to H. Kartchner. “They (the local farmers) would go through the training and get certificates to approve their ability of producing a given crop. Then they will sign a contract with us to produce and supply the crop,” the CEO said.

They hoped that this would minimize the volume of imported agricultural products. “We came across, during a visit to the 7th Addis Chamber International Trade Fair, that a food processing company selling pasta produced from an imported wheat from Australia and they said they imported the wheat because they can’t find local farmers to grow the white type of wheat. It is not because farmers are incapable of producing the white type of wheat. If you import the right type of seed to grow they would grow that,” Christopher said.

FDC officials have promised that they would, in the long run, be involved in multi-business activities as well and according to the CEO, they want to make Ethiopia a model for the rest of African countries because the AU headquarters is located in Ethiopia. “We want to make African leaders see what we are doing here. Ethiopia would become a bread-basket for the rest of countries in Africa and elsewhere.”

Gezahegn, on his part, expressed his optimism that the project would take Ethiopia to the 21st century and said if this project does not matter, “it is going to be a crime.” “We lost the 20th century. We can’t afford losing the 21st century,” he said.

About EATIC
The Ethio-American Trade & Investment Council (EATIC - www.eatic.org) is a non-profit, non-partisan, tax exempt membership organization of corporations and individuals dedicated to strengthening and facilitating trade and investment between Ethiopia and the United States of America. The Council believes that it can best accomplish this goal through education, focusing on broadening the respective knowledge of various social customs, cultural traditions and economic climate of both countries.

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