Saturday, February 24, 2024
BusinessHong Kong manufacturer leaves Bahir Dar Industry Park over AGOA market loss

Hong Kong manufacturer leaves Bahir Dar Industry Park over AGOA market loss

-It is looking for buyers to sell machineries

– It laid off over 700 workers after paying compensation

Hop Lun, a Hong Kong-based company, has departed Bahir Dar Industry Park after incurring significant losses and losing market as a result of Ethiopia’s suspension from the Africa Growth Opportunity Act (AGOA).

It is a major blow for officials, who were already under pressure as a result of the departure of factories from Hawassa Industrial Park for the same reason.

Founded in 1992, Hop Lun, which has a presence in Bangladesh, China and Indonesia, joined the Ethiopian market three years ago. Its intention was to make Bahir Dar Industrial Park an exemplary and a leading industrial park like Hawassa Industrial Park.

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In 2019, the firm leased all eight industrial sheds that the government had erected in the Park after signing a Memorandum of Understanding (MoU) with the Ethiopian Investment Commission (EIC). Four of the eight sheds were converted into production facilities, and Hop immediately began sending all of its finished goods to the US market.

At a Parliamentary session two months ago, EIC officials told MPS that it is likely that the company will leave the Ethiopian market. Daniel Teresa, deputy commissioner of EIC, stated to MPs on November 11, 2022, when presenting the commission’s first quarter performance report, that the company is unable to continue operations owing to the conflict in Northern Ethiopia, which resulted in Ethiopia’s delisting from AGOA.

Nataniye Kassa, Manager of EIC at Bahir Dar industrial park, has confirmed to The Reporter that Hop has already exited from the park after notifying the commission two months ago.

“The company paid eight months compensation for 727 workers, while other 273 left the factory before it terminated operations,” Nataniye added.

Representatives of Hop Lun have already started looking for buyers to sell machineries they have imported when they opened the factory inside the park, according to sources.

Bahir Dar industrial park was built two years ago at a cost of USD 81 million and the park has already developed 75 hectare out of the 150 hectare of land it sprawled on.

An Israeli firm, Anbasa Elite Tactical Textile Industry, joined the park last week and formally leased sheds inside it. The textile manufacturer would initially spend more than USD three million to construct its facility in the park, creating over 1000 jobs.

[Editors Note: In our story on January 14, 2022, headlined “Hong Kong manufacturer leaves Bahir Dar Industry Park over AGOA market loss,” we erroneously quoted Nataniye Kassa, Manager of Ethiopian Investment Commission at Bahir Dar Industry Park, as saying that Hop Lun paid three months’ compensation for 727 employees, while it actually paid eight months’ compensation. We sincerely regret the error and any inconvenience it may have caused.]

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Video from Enat Bank Youtube Channel.


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