Direh Ali, Djibouti national and CEO of Alvima Import, Export and Manufacturing PLC, has inaugurated a factory in Adama last week. The 11,000 square meter factory is to be one of the largest in the region. The Djibouti based company that has been known to import large quantity of pasta to Ethiopia hopes its investment of 500 million Birr will help it produce quality products worth exporting and serving the needs of local clienteles. While in Ethiopia to inaugurate his food processing plant, Direh sat down with Samuel Getachew of The Reporter to reflect on the challenges and the opportunities that he has faced in Ethiopia, on the historic relationship between both nations and why Ethiopia remains an attractive destination for foreign investment. Excerpts:
The Reporter: You are one of the noted foreign investors from Djibouti to Ethiopia via Alvima Import, Export and Manufacturing PLC. Tell me about some of the company’s activities within Ethiopia?
Direh Ali: We have been in the Ethiopian market as a trading company for the last decade, as importers of Mewal pasta which is one of the most consumed pasta brands in the country. We recently invested almost half-a-billion Birr and inaugurated our plant in Adama town focusing mainly to on the production of pasta and flour. The plan is to start making the pastas locally instead of transporting it from abroad as we have been doing for very long time. Our plant is located on an 11,000 square meter land and it is one of, if not the biggest in the region. We will be using one of the most advanced technologies at this facility and we have invested heavily in it. We believe we have set the bar high to allow us to produce not just quantity but quality products and compete ably.
When will the new plant be fully operational?
We will be at our full capacity by mid October. Our mission as a company is to produce quality pasta products in order to substitute import as I mentioned previously. I am sure your readers know how important and strategic it is to manufacture products and substitute import as much as possible. That is why we have aligned our strategy with the country’s policy in order to produce products of international standard and value. In addition to pasta products, we intend to produce quality flour that is good enough for internal use and eventually to be able to export to a number of countries. Our focus in joining the local market and investing much resource in it is to allow us to stand out in what has become a competitive market.
As you said your main focus is on quality. W hat are some of the measures you are taking as a company to insure your expectation as well as your clients’ with regard to quality will not be compromised?
To insure quality, we have taken steps to be part of a value chain program.The only difference with us is we start the value chain program from the end consumer. We study the level of the quality the consumer wants and we work towards that goal. We have also built a state of the art laboratory facility by investing 12,000,000 Birr in it. This is to control the quality of our products before they depart our facilities. That is very important to us. In an effort to sustain quality, we are also working closely with farmers, unions and cooperatives in various parts of the country. For instance, with the strong belief that quality of finished goods start from raw materials, in cooperation with Oromia ATA, we have been investing and working with farmers to help them achieve theirs and our end products.
This is to supply us with quality wheat that fulfills our standard. We are also working closely with research centers in developing and supplying the right quality seed for better grains. As part of this effort, earlier this week, we signed contracts with the different stakeholders to help us fulfill our mission. The conversation to benefit as many actors as possible is an ongoing process.
You have also mentioned about farm cooperatives, how does this benefit the average farmer?
It gives the farmer security of market. It allows us to purchase from him or her. This is done because of an agreement we made at a premium price which is a bit over market value.
How many people do you anticipate to employ?
When we will be at full production capacity, there will be more that 120 permanent employees. Of course, as we grow, there will be many more added. As a company, we have different phases.The first phase is to focus on substituting the import and full filing the local market demand. As an expansion, we are now focused on building storage area for both the raw material and the finished products. We have started the process of getting land for this extension plan. So far, we are in the right truck and we have received positive feedback from Oromia land administration to support us in this regard. The other big plan is to diversify our business line and produce biscuits and animal food products. We are studying the market and we will proceed accordingly. We want to grow in Ethiopia.
As a foreign investor, I am sure you have faced some challenges in Ethiopia. What are some of these challenges?
It is all too common to face challenges for any entrepreneur of our size and capacity and we have also faced our share. One of the biggest challenges we faced was the land issue we had. This was needed for the storage of our products which usually occupy a large space. But, that is almost at its conclusion thankfully. We have been visited by the deputy mayor of Adama municipality, accompanied by the land administration recently. They have witnessed that we have fully utilized the land that was offered to us. They have promised to give their full endorsement and support in our entire endeavor. At this moment, withstanding some minor challenges, we are working with government offices to solve and move forward. I truly feel we are on the right track to go forward. We are excited.
How helpful has the government been to you as a foreign investor?
I think if you legally operate in the country and have taken all the measures that are in play by the government, there is an adequate support that is available and can benefit as many players as possible. As mentioned by consecutive meetings with the right stakeholders, we continue to receive the support and encouragement of the government. They have indeed been helpful to us and I am sure to many other investors. Our investment confidence is in the process we have experienced so far. Specifically, the ministry of Industry and investment office has been a very good support from the start. Industry Minister Mberahtu Meles is following up closely on our progress and helping us succeed. We remain thankful to him and his team. They are engaged and are accessible. Regarding the investment opportunities in Ethiopia, in my opinion, there is no doubt that Ethiopia is the first choice of investment in East Africa. It is an emerging market and also the size of the population is simply attractive to invest in and the Ethiopian society is welcoming of foreign investment. That is a good thing.
How do you engage with the community? Is there any corporate responsibility program that you follow from your end?
As CSR programs we are supporting the society by providing them with clean drinking water as we see clean water is in shortage around our factory. Also we are giving employment opportunities for the surrounding people. Recently to ensure food nutrition, we have been part of the food fortification national program. Even though the ministry of industry selected 12 companies and has given them the right support and training to start this program, we have joined as a 13th company voluntarily. This was because in our initial investment we included the fortification technology on our machineries. We were committed to this program but where waiting for the law to be implemented. We believe in growing together with the community in which we operate in and there is literally no gain in investing in a country without supporting the local community. We will in the near future design a sustainable program in order to standby the community to tackle some of the most common development problems they encounter. That is simply how we operate as a company and that is our company culture. We want to operate as an engaged entity and a great neighbor.
How do you see the relationship between Ethiopia and Djibouti and where do you see these two countries in terms of political and socio-economic integration in the next decade?
In my opinion, Ethiopia and Djibouti have a long standing and strong relationship. I believe the two countries will take this relationship to the next level within the next few years and hopefully, the relationship will continue to thrive. I personally have entered this market to make such a significant investment, because of the bilateral trade agreement that exists between both. Ethiopia is a very suitable country for investment and we continue to enjoy support from all stakeholders in our investment in the country. I believe this will continue throughout as we are here for the long haul.
Any parting words?
We are joining the market placing and emphasizing on quality and building working with relationship with many players. We believe we have made all the necessary preparation to fulfill the demand and hopefully we will take our share of market in substituting the imported products. Our investment in Ethiopia is a reflection of our commitment and the potential we see in it. We are happy to be in Ethiopia!