Posts filed under ‘Business opportunity’
By Jenny VAUGHAN
For Bethlehem Tilahun, the answer to ending poverty in Africa is not aid or sympathy or donations from the West. It’s shoes.
Specifically, building a successful shoe manufacturing business that creates jobs, empowers employees, like the one she founded Ä
SoleRebels, the first ever global footwear company to come out of a developing country.
“You don’t build your economy based on aid, you want to build your economy based on the way SoleRebels built its business, so that it’s sustainable,” Bethlehem told AFP.
SoleRebels highlights how burgeoning enterprises can transform economies across Africa.
By shifting away from a reliance on exporting raw materials to the production of premium products such as shoes, Africa can ease its dependency on aid and slowly move toward industrialised growth.
Founded in 2004, SoleRebels now employs around 150 Ethiopians producing shoes with hand-spun Ethiopian cotton, rubber and leather for export in over 65 stores around the world.
She believes creating jobs, supporting local industries and transforming Africa’s image abroad will have lasting impact on economies across the continent in ways that traditional aid cannot.
“That is sustainable, and that’s the only way of getting out of poverty,” she said, sitting in her flagship store in downtown Addis Ababa.
With a growth rate of 7.2 percent, according to the World Bank, Ethiopia is one of the fastest growing economies in the world.
But, paradoxically, it also remains one of the top recipients of aid in Africa.
Today, the Ethiopian government is keen on boosting private investment, increasing trade and transforming the agriculture-based economy into an industry-based one, mimicking development models from Asia, such as South Korea or China.
For Bethlehem, it is not only about moving from aid to trade, it is about building a savvy business and manufacturing a product that resonates with customers from France to Taiwan, not because its made in Ethiopia, but because it is a good shoe.
“People see them and say ‘wow, cool shoes!’ without necessarily knowing they are made in Ethiopia. To me, that is critical,” she said.
She is intent on marketing her product in exactly the same way as longer-established Western-based companies market theirs.
“We are not saying … ‘we’re poor, we’re in Africa, we’re doing this to help the poor’. We have a brand, and we strongly believe in what we’re doing,” she said, lighting up at she gazes at the racks of shoes in her wood-lined store.
Ä Trade, not aid Ä
Born in a poor neighbourhood in Ethiopia’s capital, Bethlehem said she was inspired at a young age to go against the grain, especially after seeing how little impact traditional aid had in her community and her country.
“To follow everybody’s pattern is not something that I wanted to do from the beginning,” she said with a characteristic zeal in her eyes. “If I am doing the same thing that everybody is doing and I don’t make a difference, there is no change.”
Shoes, she said, are the perfect homegrown product since they can be produced entirely from Ethiopian materials. The cotton and leather is sourced locally, while the rubber soles are made from recycled tires.
Plus, the shoes and the company name resonates with Ethiopia’s rich history. Having never been formally colonised, Ethiopian rebels famously fought off Italian occupiers in 1941, inspiring a pride and spirit of independence Bethlehem sought to invoke with her company.
“We’re free, that’s why we call ourselves SoleRebels,” she said, sitting next to a display of colourful, rubber-soled shoes modelled after shoes worn by Ethiopia’s rebels.
Her business ethos is one that succeeds where charitable retailers elsewhere do not. Tugging on philanthropic heart strings, Western companies often brandish products manufactured cheaply in Asia in order to help Africa, something the socially-conscious founder of SoleRebels adamantly opposes.
She said too many companies “come up with ever more outrageous claims of how they are saving Africa or helping Africa as a marketing tactic to sell product,” adding that “most of it is pure ‘BS’.”
“We strongly believe that people have to get a certain salary, so we don’t want to produce our products with cheap labour,” she added.
The first certified fair trade shoe company in the world, SoleRebels proudly pays their employees five times the minimum wage in a country where average per capita income is less than $1 per day, according to the World Bank.
The secret to her success lies in large part in her perseverance. She faced many financial and administrative challenges early on but refused to give up.
Bethlehem also stands out in a country where business is dominated by men.
She built her company up from scratch with an initial investment of $5000. Today, she is aiming to build the company’s net worth to $250 million by 2020.
Having received accolades internationally, including from Forbes and the World Economic Forum, Bethlehem admits she is sometimes surprised at how successful her business is, but having gained momentum in recent years, she is set on expanding her global empire now.
“I am dreaming about it all the time,” she said.
SoleRebels will open over 50 stand-alone retail shops abroad over the next three years, adding to the 11 already in Taiwan, Singapore, Austria, Japan, Spain and Ethiopia. Her dream is to see Ethiopia’s economy transformed by supporting more businesses like her own.
“Imagine we have hundreds or thousands of SoleRebels…,” she said, with a sly smile. – Sapa-AFP
Bethlehem Tilahun Alemu began SoleRebels as a way of bringing jobs to her community. When she migrated from the countryside in Gojjam to Addis Ababa in Ethiopia in search of ‘a better life’ and saw that there really wasn’t one – she took action. She made a commitment to not only create jobs for her fellow citizens which were EXCELLENT paying ones, but jobs which were FAR ABOVE what other local employers were paying for similar work. She also committed to providing local jobs which provide a decent standard of living for workers and their families. Her goal was to create wages for workers which are on average 4x the legal minimum wage and 3x the industry average for similar work.
Next on her ‘to-do’ list was to create sustainable production. Her equation looks something like this:
RECYCLING + LOCALLY SOURCED ORGANIC MATERIALS + TALENTED HANDS = LOW CARBON FOOTPRINT + ENVIRONMENTAL RESPECT + COOL PRODUCTS
Talk about a recipe for success. Bethlehem’s thinking was that, in Ethiopia, recycling things is a way of life. In fact, people have been recycling for years and years without ever calling it recycling. When there are limited resources everything is valued and valuable. Everything has its purpose – even if it is not the original purpose it was intended for. For Ethiopians, ingenuity + resourcefulness equals TRUE RECYCLING.
Bethlehem’s company has taken the traditional Ethiopian selate shoe (recycled tire shoe) and re-imagined it as a very hip, dynamic, eye-catching fashion. Her staff of hardworking Ethiopians regularly challenge themselves to find new uses for indigenous and recycled materials. Styles include camouflages put into peaceful use, ingenious arrays and uses of Ethiopian hemps, and on to the most wild use of tires and inner tubes you can imagine.
Preserving Ethnic Heritage
Part of the company’s success, in addition to its beautiful products and commitment to workers, is the way it leverages the uniquely Ethiopian heritage to build a global, market leading eco-ethical brand. Everything the company does is guided by applying the unique cultural arts practiced in Ethiopia for millennia. By preserving important cultural assets in fresh, fun, dynamic new fashions, it’s a win/win for both producer and purchaser.
Sole Rebels believes in building power for workers and their surrounding community. Every action the company takes is with community betterment in mind. Besides creating a myriad of employment opportunities and always looking to increase these, the company challenges themselves to do more, more, more! One example of the kind of giving back Sole Rebels does is their artisan education fund. This fund provides monies for the education of Sole Rebel artisan’s children and/or the children of close relatives. Like all Sole Rebel programs the artisan education fund is flexible and demand driven – meaning the workers get to decide where to allocate money.
Fair trade, fun fashions, eco-friendly materials, and well-made long-lasting shoes – what could be more joyful!
By Marthe Van Der Wolf
ADDIS ABABA — A group of 150 Ethiopian doctors living abroad are constructing a hospital in their home country that will offer state-of-the-art medical treatment. This new hospital is designed to reduce the number of Ethiopians seeking medical facilities abroad.
The Ethio-American Doctors Group, an association of more than150 Ethiopian doctors in the diaspora, is realizing its dream: establishing an up-to-date hospital in their homeland that includes a medical school and a medical research center.
Dr. Yonas Legessa Cherinet of the Doctors Group said the new hospital will feature 27 medical specialties that currently are not offered in Ethiopia.
“There are a varieties of fields where service is very limited here. I could mention vascular surgery, urology, pulmonology, neuro-surgery and reproductive endocrinology, which is not available. So many doctors are coming in with so many specialities, there will be a core group of these specialists who will be coming here to lead some departments, to work here,” said Yonas.
The Doctors Group hopes that fewer Ethiopians will go abroad for medical help if they can be treated inside the country.
Currently, many Ethiopians that can afford better treatment go to Asia, the Middle East and South Africa. The Bangkok Hospital in Thailand treated more than 6,000 Ethiopians in 2011 alone. A lot of money is involved, as the average treatment costs about $20,000.
Dr. Zelelam Abebe, who works in a private clinic in Ethiopia’s capital, Addis Ababa, said there is a large need for first-class medical services in the country.
“I had to refer several people to hospitals abroad for different cardiac surgeries, brain surgery and advanced cancer cases,” he said.
Dr. Yonas said that providing for Ethiopians who might otherwise go abroad means the hospital will have to be run differently – and better – compared to most other facilities in the country.
“The reasons they mention [for going abroad] vary from the quality of care to the way they are treated in respect. So we want to bring a new culture here of medical care, which will be patient-centered,” said Yonas.
But with an average yearly income of $1,200, most Ethiopians will not be able to afford the treatments offered at the new facility. Yonas said money will be raised for those in financial need.
”We also have what we call the EDG fund, which will be taking 10 percent of our profit for people who cannot afford quality service,” he said.
Tariku Assefa is a general practicing doctor who works at the Black Lion Hospital, the largest hospital in Ethiopia, which also includes a medical school. He welcomes the idea of the new hospital, but hopes the new research facility will focus on diseases prevalent in Ethiopia.
“We use most of the research that were done in the western countries. We take example from America or other western countries because those research is done there. In most of the disease entity we don’t have our own figures, we use the figures of other people, which is somehow biased because the one which is in the West may not work for us,” said Tariku.
The hospital is scheduled to open its doors by 2016 and employ 300 to 400 people, of whom 50 will be physicians. Some doctors from the diaspora will return to Ethiopia, while others will commit several weeks per year to an exchange of knowledge with the hospital.
The august World Bank and the mighty World Economic Forum, in their January report Enabling Trade: Valuing Growth Opportunities, predict a burst of growth through more efficient seaports, air freight, and telecommunications:
By region, the report predicts a gigantic 12 percent jump in African GDP, a 4.4 percent rise for Mexico, and a smaller but still considerable increase of 2.8 percent in American GDP, including an 11.3 percent in exports. (In practical terms, $180 billion, the equivalent of last year’s exports to China and Japan combined.) The worldwide growth comes to about six times the value of removing all tariffs.
Why would this be?
Mainly because shipping costs are typically higher than tariff costs. In the U.S. case, the best-documented example comes from container shipping, using figures from (a) the Bank’s Trading Across Borders project, which closely studies costs in the Port of New York/New Jersey; (b) the Census Bureau’s annoyingly for-pay site usatrade.gov, which estimates trade value by mode of transport; (c) the Port of NY/NJ itself; and (d) miscellaneous reporting on ocean freight rates. Pulling all these sources together, in 2011, the New York port exported 1.62 million containers (measured in TEUs, or “twenty-foot equivalent units”) which carried $37 billion in cargo to foreign buyers. A typical container held $23,000 worth of goods like cosmetics, beef, books, auto parts for overseas service centers for US-based automakers, and medical devices for hospitals. To bring it from the port’s gate to a waiting truck in London cost about $3,000, or 14 percent of cargo value, in four separate costs:
(1) $690 to lift the container off the railcar at the port gate, bring it through the port, fill out and file paperwork, and hoist it by crane onto the deck.
(2) $1,500 to ferry it the 3077 nautical miles from the Harbor to Southampton dock. (Using a typical recent figure, which can be much higher or lower depending on fuel costs and the state of the economy in the importing country.)
(3) $455 to pick the container up off the ship, carry it through the port, clear security, and load it onto another truck, and
(4) $350 in tariffs at EU Customs, assuming the container has a typical mix of auto parts, cosmetics, books, airplane parts and similar manufactures. Lots more if it’s carrying beef, flour, or fish.
Paperwork and other incidental cost at the two ports, then, accounts for about 40 percent of the cost of moving the box from New York to London. The EU tariff is only about 12 percent. Ocean freight accounts for the rest. Bringing New York and Southampton to Singapore’s “world standard” of $326 to export a container and $299 to import would save exporters $520 per container – mostly from reducing costs in New York – which is well above the savings from eliminating all European Union tariffs. Getting halfway there, the goal set in the WB/WEF report, would save $260. This is not quite as much as tariff elimination, though when improved telecom costs, air-freight procedures, and roads to ports are included, the figure should be higher.
Developing-country gains in the report’s model are typically higher than this, because low-income countries are usually further away from the world standard. (Though at least in container-shipping and at least for exporters, U.S. costs are unusually high. More on this later.) Getting halfway to the standard, then, usually saves more for lower-income countries and therefore yields proportionately larger benefit.
Ethiopia is one of the few remaining African countries to introduce mobile banking. With the booming economy and a population of 80 million this country could be the next gold mine for mobile banking companies.
Mobile banking has proved to be a lucrative venture in the developing world, where large parts of the population belong to the so-called “unbanked.” In Africa, only Ethiopia and Zimbabwe do not provide mobile money services. That will change soon for Ethiopia.
BelCash and M-Birr are mobile banking technology providers that have been in Ethiopia for the last three years to set up mobile banking and mobile money services.
Dutch company BelCash is focused on mobile banking, working in partnership with banks to provide easier access to finance through bank accounts. Ireland-based M-Birr is a mobile money service that works with micro finance institutions where no registration at a bank is needed.
The companies will face several challenges in Ethiopia. Half of the population is said to be illiterate, and the telecom coverage in the country is far from perfect. The pressure on the telecom network will increase as the number of Ethiopians owning a mobile phone increases.
In the last four years, the number grew from three million to 17 million users. And Ethiopia’s telecom provider, Ethio Telecom, expects that number to grow to 40 million in the next three years.
BelCash founder Vince Diop does not believe a limited network or high illiteracy rate will be a barrier for introducing mobile banking.
“We have multiple channels that people can use, like sms, ivr, so that if one channel is not working properly than still they have other options,” Diop said.
The government regulates Ethiopia’s telecommunications market, meaning that there is only one telecom provider and others are not allowed. Both BelCash and M-birr are strictly technology providers. M-Birr General Manager Thierry Artaud sees the regulated market as a benefit.
“If you look at your neighbors, Kenya, Tanzania Uganda, they all have multiple mobile operators and they all have mobile money services and even multiple mobile money services,” said Artaud. “If the country was deregulated, the big operators like Vodafone, MTN would come to Ethiopia and launch a mobile money service. Because its not deregulated we are protected.”
Ethiopia has looked at other developing countries to learn from their experiences with mobile banking. The National Bank of Ethiopia visited Kenya, Pakistan and Brazil.
Frezer Ayalew is the director of micro-finance supervision of the National Bank of Ethiopia. He says mobile banking services could be a positive development for Ethiopia.
“Financial service accessibility is very necessary in order to smoothen consumption, built household assets. And it’s critical for people to have access to finance,” said Ayalew. “For the economy it has great contribution in terms of mobilizing domestic savings with these services.”
Ethiopia also strongly regulates its financial institutions. The National Bank of Ethiopia just finished a draft directive on how mobile banking services should be regulated as more companies have shown interest in starting mobile banking services.
Frezer says the directive is needed to face possible challenges.
“The overall purpose of the directive is to make sure that the financial institutions are providing the service in a prudent and safe manner so that the stability of financial system is maintained,” said Frezer.
Artaud says that until the directive has been finalized, M-Birr is allowed to start a pilot.
“People will be able to start registering for real, with real money and transferring money throughout the country,” said Artaud. “The only limitation will be where the branches are, because we are talking about roughly thirty points of sales for the pilot.”
The National Bank of Ethiopia expects that the directive will be approved in the coming months.
Ethiopia Sugar Corp. said it’s signed agreements with state-owned China Development Bank Corp. for $500 million in loans to build two refineries, part of a plan to boost output of the sweetener almost tenfold by 2025.
Ethiopia’s Finance Ministry and the state-run sugar company have signed memorandums of understanding with the Chinese lender for loans to build the plants in Ethiopia’s South Omo Zone, Sugar Corp. spokesman Yilma Tibebu said in an e-mailed response to questions on Sept. 24.
China Development Bank has advanced $123 million for a factory in the northeastern Afar region, he said. The factories will be built by the Ethiopian state-owned Metals and Engineering Corporation, an amalgam of former military companies. China Complant Group Inc. is also working on the Afar project, Yilma said.
Last year, Ethiopian Sugar started building 10 cane plantations and factories with the goal of making the sugar-importing Horn of Africa nation one of the world’s 10 biggest exporters of the sweetener by 2025.
The building program will cost “close to 100 billion Ethiopian birr ($5.5 billion),” with about half required in foreign currency, said Asfaw Dingamu, Ethiopian Sugar’s deputy director-general for the legal and communications department.
“We’re looking for loans,” he said a Sept. 22 interview in the capital, Addis Ababa. “We’re negotiating with Chinese banks.”
Ethiopian Sugar plans to provide about 40 percent of the money through sugar sales, with the rest of funding to be equally split between Ethiopian state banks and external lenders, he said.
Sugar Corp. generated 3 billion birr in profit from existing factories and sales of imported sugar in the year to July 7, Asfaw said. The government plans to increase production to 2.3 million metric tons of cane by 2025, and the country produced 265,000 tons last year, he said.
It spent 12 billion birr over the past two years on design work, irrigation infrastructure, roads and worker housing, he said. Ethiopian Sugar will need 100,000 workers to operate six plantations being set up in South Omo, Asfaw said.
A delayed sugar project at Tendaho in the Afar region will be producing at 30 percent capacity in January, Asfaw said. The factory is being built by India’s Overseas Infrastructure Alliance with a $394 million loan from the Export-Import Bank of India.
To contact the reporter on this story: William Davison in Addis Ababa at email@example.com
To contact the editor responsible for this story: Antony Sguazzin at firstname.lastname@example.org
A court in London has sentenced an Ethiopian embassy worker to 33 months in prison for trying to smuggle drugs. Amelework Wondemagegne was arrested last year with 56 kilograms (123 pounds) of cannabis at London’s Heathrow airport. The cannabis, packed in suitcases and sprinkled with chilli powder, had a street value of $249,000 (£160,000).
The court ruled Wondemagegne was not entitled to diplomatic immunity.
“The fact that you smuggled these drugs in the expectation that you would not be prosecuted if you were caught because of your diplomatic status is a significant factor in this case,” Judge Richard McGregor-Johnson told her. Wondemagegne, who worked in the embassy’s visa section since 2006, will be deported from Britain after serving her sentence.
Source BBC News
Mohammed Al-Amoudi is literally a man of many parts; born in Ethiopia to an Ethiopian mother and a Yemeni father, Al-Amoudi grew up in Saudi Arabia, yet he is the largest individual investor in Sweden.
To date, Al-Amoudi still remains intensely loyal to his Ethiopian roots, and his multi-billion dollar investments in Ethiopia’s agricultural sector illuminate his devotion to the African country of his birth. But his fame and extraordinary fortune is not in Ethiopia, but in Saudi Arabia and Sweden.
When he was 19, Al-Amoudi migrated from Ethiopia to Saudi Arabia with his family. In Saudi Arabia, the young Al-Amoudi built a personal relationship with the Kingdom’s ruling family. As a result, in 1988 he cornered an important contract to build the Saudi government’s $30 billion nationwide underground oil storage complex. That contract cemented his fortune and instantly made him a billionaire.
Al-Amoudi eventually returned back home to Ethiopia in the mid-1980s and founded Mohammed International Development Research and Organization Companies (MIDROC), a diversified holding company which he used to gobble up gold mines from the government at a fraction of their real market value. Today, MIDROC Gold is Ethiopia’s exclusive gold exporter. One of its mines, called Legedenbi, has annually produces close to 5,000Kg of gold and silver.
Apart from mining, Al-Amoudi invested in several other sectors of the Ethiopian economy. He built the Sheraton Hotel in Addis Ababa, which is the country’s foremost 5-star hotel. He acquired 70 percent of Ethiopia’s National Oil Corporation and founded Tossa, Ethiopia’s first industrial steel production plant, which is expected to produce at least 1.9m tonnes of steel per annum as from 2014.
Al-Amoudi’s other holdings in the country include a 69 percent stake in Addis Tyre, Ethiopia’s sole manufacturer of Tyres; Saudi Star Agricultural Development Plc, which is developing 1,200,000 acres of Ethiopian land for the production of rice, sugar, wheat and other commodities.
The bulk of the Sheikh’s business success has also been built around Sweden. In 1994, Al Amoudi spent $750 million in acquiring Sweden’s largest integrated energy company, OK Petroleum, and subsequently renamed the company Preem Petroleum. He invested heavily in extending the capacity of its refineries, substantially increasing the number of its gas service stations around the country and acquiring more deep offshore assets.
In 1999, Al-Amoudi’s Swedish-registered investment company, Corral, acquired a controlling interest in two Moroccan oil refining companies- Samir and SCP. Al-Amoudi merged the two companies and further invested half a billion dollars in modernizing the plant. Today, Corral is the undisputed market leader in Morocco’s Energy sector, both in distribution and refining.
Al-Amoudi’s empire built around construction, mining and oil employs over 40,000 people in Sweden, and the man who many love to refer to as ‘The Sheikh’ has given away millions of dollars to philanthropic causes in religion, sports and education in Ethiopia, the United States and Saudi Arabia.
In July 2010, he financed the creation of the Sheikh Mohammed Hussein Al Amoudi Center for Breast Cancer Research at King Abdulaziz University in Saudi Arabia. He is also one of the largest donors to the William J. Clinton foundation, and has fully funded the King Abdullah Institute for Nanotechnology at King Saud University.
Sheikh Mohammed Hussein Ali Al Amoudi (Ge’ez: ሞሓመድ አልአሙዲ, Arabic: محمد حسين العمودي; born 1946 in Dessie, Ethiopia but grew up in Weldiya) is a Saudi Arabian /Ethiopian business magnate who lives in Ethiopia and Jeddah, Saudi Arabia. In 2006 his net worth was estimated as between $2.5 and $6.9 billion, causing Arabian Business to rank him as the world’s 8th richest Arab, and Forbes to rank him as the world’s 77th richest person. Al Amoudi’s father is Yemeni and his mother is Ethiopian. He immigrated to Saudi Arabia in 1965 and became a Saudi citizen. Depending on disparate ethnic categorizations, and Al Amoudi’s mixed Ethiopian and Yemeni parentage, he is considered to be the richest black person in the world and/or one of the richest Arab.
Al Amoudi made his fortune in construction and real estate before branching out to buy oil refineries in Sweden and Morocco. He is said to be the largest foreign investor in both Sweden and Ethiopia. He holds an Honorary Doctorate in Philosophy from the Addis Ababa University and has been honoured with the Swedish RoyalOrder of the Polar Star by King Carl XVI Gustaf of Sweden.
Source: Ventures Africa
By William Davison
Ethiopia signed a $1.5 billion agreement with state-run China Communications Construction Co. to build a railway to carry potash from mines being developed in the nation’s northeast.
The 360-kilometer (224-mile) line will transport passengers and freight along a route to neighboring Djibouti’s Tadjourah port, which is being built. It should be completed by July 2015, Ethiopia’s Foreign Ministry said in a statement posted on its website yesterday.
CCCC (1800), a Chinese government-owned transportation infrastructure company, will be “mobilizing substantial resources to guarantee completion of the project,” the ministry said, citing the company’s vice president, Zhou Yongheng.
Ethiopia, sub-Saharan Africa’s second-most populous nation, is in the middle of a five-year plan to modernize and upgrade its infrastructure and industries. The government last year signed two agreements with Chinese companies to build a 4,744-kilometer (2,948-mile) rail network to Djibouti.
Landlocked Ethiopia lost its access to the sea after Eritrea voted for independence in 1993. The new rail line will run between the cities of Mekele and Hara Gebaya.
Canada’s Allana Potash Corp. (AAA), Sainik Potash Plc of India, Ethiopian Potash Corp. (FED) and Melbourne-based BHP Billiton Ltd. are all developing projects to extract potash, a fertilizer ingredient, in the Afar region.