Opportunities and Government Commitment

to Promote Competitiveness of Fruit & Vegetable Investment

1. Sector Profile

a) Currently Grown Fruit & Vegetable and Market Destinations

VegetablesDifferent types of vegetables are grown and marketed in different destinations:-– Green Beans,– Snow Peas,– Mange tout,– Broccoli,– Courgettes,– Asparagus,

Mainly to European Market

1.1. Where are we Today

– Tomatoes (Beef & Cherry)– Bell Peppers, – Chili– Onions– Lettuce– Cabbage– Potato– Etc…

Mainly to Middle East & African Countries

Fresh Herbs

– Chives– Parsley– Rosemary– Basil– Dill– Others

To European Market

Fruits– Strawberry => To Europe & Middle East

– Banana– Mango– Orange– Papaya– Mandarin– Etc…

To Middle East && & African Countries

b) Area Coverage (Hectares)Vegetables 1,011,Fruits 10,066,Herbs 34.

c) Companies Involved23 vegetable commercial companies (13 are FDI),6 herbs commercial companies (4 are FDI),6 fruits commercial companies (2 are FDI) and many

small holders.

Vegetables and fruits are produced within a maximum radius of 240km from Addis Ababa.

• High valued crops Koka, Holeta, Sebeta, Hawassa,

Sendafa, Ziway, Upper Awash, Debrezeit (to Europe

and Middle East Market)

• Low valued crops specially fruits (to neighboring

countries) in Awash, Dire Dawa, Hararghe.

d) Export Volume and Value

110,186 tons of different types of vegetables with

export value of 47 million,

493 tons of different types of herbs with export value

of 1.5 million USD,

12,859 tons of different types of fruits with export

value of 4.5 million USD.

1.2. Where are we heading (GTP end of 2014/15)

Development Model:- Special focus on commercial nucleus estate and out growers scheme in the identified 5 development corridors.

a) Total Area (ha)Flower 3,000Vegetable 15,000Herbs 3,000Fruits 15,000 Total 36,000

b) Export Volume (in ’000 ton)Flower 158.35Vegetable 559.8Herbs 15Fruit 404.8 Total 1,138

c) Planned Revenue (million USD)Flower 535,Vegetables, fruits and herbs 948, Total 1,483.

d) Employment (Direct)720 thousand workforce.

2. Existing Potential

a) Diverse Agro-Climatic Condition Suitable to produce wide range of fruit & vegetables.

b) Land and Water Resource4.3 million hectare of irrigable land (<1% utilized to

date),122 billion m3 total water available,2.6 billion m3 surface water potential,

c) Labor ResourcePopulation 83 million,Working force 42.3 million (~50%),Skilled work force 18 million.

d) Geographical LocationProximity to Middle East markets,Proximity to European markets,

3.1. Provision of land at reasonably low lease rate (ranging from Br 3000 to Br 12,300/ha/annum)

in 5 development corridors.

3.2. Development Corridors ‘Horticulture development corridors are those areas

demarked with a maximum distance of 200 km from centers (major airports), naturally endowed with potential land to be made accessible for establishment of nucleus commercial estates, existence of potential farmers for the out growers scheme, existence of labor, road and infrastructure that links the products with the external market’

3. Government Commitment

Total

5

3

2

4

1

Hawassa-Arbaminch Corridor6,000 hectares commercial development20,000 hectares outgrowers holdingModern warehouse under constructionDistance to:

• Djibouti: 903km• Port Djibouti: 1008km

4

1

2

3

5

Total

Adiss Ababa& Oromia Corridor10,000 hectares commercial development30,000 hectares outgrowers holdingInternational airport and modern warehouse facilityDistance to:

• Djibouti: 662km• Port Djibouti: 767km

4

1

2

3

5

Total

Mekele, Raya& Alamata Corridor4,000 hectares commercial development40,000 hectares outgrowers holdingInternational airport and modern warehouse facilityDistance to:

• Djibouti: 521km• Port Djibouti: 626km

4

1

2

3

5

Total

Awash, Diredawa & Harar Corridor20,000 hectares commercial development20,000 hectares outgrowers holdingAirport facility and Modern WarehouseDistance to:

• Djibouti: 309Km• Port Djibouti: 414Km

4

1

2

3

5

Total

Bahirdar, Abay Valley& South Gondar Corridor10,000 hectares commercial development40,000 hectares out growers holdingInternational airport and modern warehouseDistance to:

• Djibouti: 687Km• Port Djibouti: 792Km• Sudan: 348Km• Port Sudan: 1282Km

4

2

3

5

Total

Total Land for Development

Commercial Development 50,000 hectares

Out growers holding 150,000 hectares

3.3. Access to bank loan at a ratio of 70:30,

3.4. High level security and investment guarantee,

3.5. 100% tax exemption on capital goods,

3.6. Duty drawback scheme, voucher scheme and bonded manufacturing warehouse scheme,

3.7. Income tax exemption up to 5 years,

3.8. EHDA Support:-

KTransfer of knowledge and technology on

production and post harvest,

KFacilitation of investment and provision of

customer services (land, duty free support, utility,

roads, etc…)

KMarket diversification and linking out-growers

with commercial estates.

3.9. Logistic Facilities– Developing the competitiveness of inland

hauling (ownership of reefer container/generator mounted trucks by MTS),

– Developing the competitiveness of sea transport (ownership of generator set equipped vessels),

– Construction of cold stores at each development corridors,

– Modernization of palletizing room and cold store at Bole, Bahirdar & Mekelle Cargo Terminals.

– Willing and able to work as partner, respecting the constitution of the Federal Democratic Republic of Ethiopia,

– Willing to follow and implement commercial law of the country,

– Equipped with basic technology, capital & secured external market outlets,

– Willing to demonstrate the investment action through provision of business plan,

– Willing to work with small commercial and out grower scheme, and

– Ready to exercise Good Agricultural Practices (protection of the environment, safety & corporate social responsibility) & dissemination of knowledge and technology.

4. Investors Legibility Criteria