Al-Amoudi to Invest $500 Million on Ethiopian Coffee and Oranges

Horizon Plantations Ethiopia Plc,
majority-owned by Saudi billionaire Mohamed al-Amoudi, plans to
almost double annual revenue within three years by investing at
least $500 million in coffee and orange projects.

The agriculture company will train workers, improve roads
and replace washing units at the Limmu and Bebeka coffee
plantations, which together have over 18,000 hectares (44,479
acres) under coffee, General Operations Director Kemal Mohammed
said in a Sept. 17 interview in Addis Ababa, Ethiopia’s capital.
The development is part of a five-year program to invest in
projects that also include Upper Awash Agro-Industry Enterprise,
the country’s largest orange grower with 1,200 hectares of
citrus, he said.

“We are sure because of the initiatives we have now,
because of the inputs and techniques we’re applying, the
productivity will increase to the maximum at the end of the five
years,” Kemal said.

Ethiopia, Africa’s biggest coffee producer, may see
earnings from shipments of Arabica coffee rise 25 percent to
about $900 million in 2014-2015 as prices rise because of
shortage caused by a drought in Brazil, an exporters’
association said last month. Horizon bought the two coffee farms
for 1.6 billion birr ($80 million) last year from the Ethiopian
government, which is seeking investment in projects that process
agricultural products.

Horizon has a sales target of 500 million
Ethiopian birr by 2017, Kemal said. The company also produces
organic fruit and vegetables.

Bebeka, in southwest Ethiopia, is the world’s biggest
unfragmented coffee estate with 10,030 hectares under
plantation, according to the company’s website. Limmu, 350
kilometers (218 miles) southwest of Addis Ababa in the Oromia
region, has 8,000 hectares under coffee and produces 5,000 tons
a year of the beans.

Ethiopian coffee

Foreign Investor

Al-Amoudi, born in Ethiopia in 1946 to an Ethiopian mother
and Saudi father, is one of the country’s largest foreign
investors and operates its biggest cement factory and only
large-scale gold mine. He also runs construction and oil
operations in Saudi Arabia, Sweden and Morocco and is the 143rd
richest person in the world with a net worth of $8.6 billion,
according to the Bloomberg Billionaires Index.

Investment in Limmu may help double production to about 1.5
tons a hectare by 2018, Kemal said.

Bebeka Coffee Estate doubled production to about 1.4 tons
of coffee last year, according to Kemal. Around 90 percent of
the company’s coffee last year was directly sold to buyers in
countries including the U.S., Germany, South Korea and Japan,
Kemal said.

Horizon, which is part of al-Amoudi’s Midroc group of
companies, is looking for a foreign partner to invest in the
Coffee Processing and Warehouse Enterprise on the outskirts of
the capital. The plant was bought from the government last year
for 228 million birr, Kemal said.

“We need very good, genuine partners who can work with us
and support us” to make competitive processed and packaged
coffee, he said. “To penetrate the foreign markets is not an
easy task.”

To contact the reporter on this story:
William Davison in Addis Ababa at
wdavison3@bloomberg.net

To contact the editors responsible for this story:
Antony Sguazzin at
asguazzin@bloomberg.net
John Bowker, Randall Hackley

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