Ethiopian Review

Despite the absence of interested buyers, the Privatization and Public Enterprises Supervisory Agency (PPESA) has continued to put up state-owned establishments for tender.

With interest in the enterprises recently put up for tender being quite minimal from both local and foreign investors, the agency seems forced to deal with whoever bids following the announcements.

For instance, PPESA allowed the privatization of the Debra Berhan Blanket Factory by an Indian company which appeared as the sole bidder on the tender date.

This apathy was the same with 10 public enterprises sold out to local investors, and with four others transferred to investors on lease.

In accordance with an agreement made on October 9, 2008, the fixed assets of Debre Berhan Blanket Factory, with the exception of the stocks, have been transferred to Vitanjel Wolf Plc, an Indian company, for 1.1 million dollars, according to Wondafrash Assefa, Information and Public Relations head with the Agency.

Since no interested bidders other than Vitanjal Wolf showed up in response to the tender announcement the agency posted three times, it decided to sell the public enterprise located 13oKm north of Addis Abeba to the Indian company. The factory specializes in the manufacturing of blankets, carpets, upholstery cloths, curtain clothes and woollen cloths.

The agency continues to privatize such enterprises to meet its mission of introducing improved management and technology to attain better performance, Wondafrash explained.

The buyer of the factory has not yet finished makeover works to the factory. The transaction is expected to be finalized in a month’s time.

The factory has the capacity to produce 4.3 million square metres of blankets, 29,000 square metres of carpets, and 186,000 square metres of upholstery or cloth annually.

The agency has also announced another round of bids for investors interested in getting involved in Hawassa and Bahir Dar textile factories, Kality and Dire Dawa Food complexes, Hammaressa and Faffa Edible Oil factories, Adey Ababa Yarn Thread Factory, Misrak Flour and Bread Factory, Ethiopian Metals Galvanizing Factory, Water Welling Works Enterprise and Roha Ghion Hotel.

In the tender period that will last until June 23, 2009, PPESA hopes to see investors step forward and express interest in owning these enterprises in an equity joint venture, non-equity joint venture or lease contract, Wondafrash explained.

Most of the enterprises that the agency handles are textile and garment factories, leather and leather products manufacturers, food processing complexes, as well as construction and agro-industries.

- By MERGA YONAS | Addis Fortune