Japanese firms zooming in on potential businesses
After a half a century stay in the Ethiopian trade business, local dealers and Isuzu Motors International via Itochu Corporation — the trading and export house of Isuzu Motors – have reached terms to set up an assembly line in Ethiopia, The Reporter has learnt.
Kessate-Berhan Mengiste, the automobile section manager with Itochu Corporation told The Reporter that the trending changes and growth of Ethiopia is attracting the likes of Isuzu. He argues that the momentum in Ethiopia ignited the increase of Isuzu-Itochu presence.
The assembly line is expected to be operational within the coming two years. According to Kessate-Berhan, the prototype of the plant will be finalized by the end of 2018 and some knocked-down units have already been ordered for shipments. However, he opted not to give details of the project stating that he had to consult first with the dealers.
So far, the National Motors Corporation (NMC) was the sole dealer until Kaki PLC recently joined the dealership with the duo. One more dealer is expected to join the business, Kessate-Berhan said.
With the addition of one more dealer into the system, the annual sales of Isuzu trucks have reached 800 units and that has shown an increase of 96 percent from the previous years. This figure according to the section manager represents only official figures. When added, the indirect imports that are mostly sourced from Dubai, the total sales furthers jumps to reach up to 3,000 units. Despite the challenges of hard currency shortages, double the amount of current sales is projected.
Currently, NPR and FSR Isuzu truck series are widely used in Ethiopia. However, FVR 23 and FVR 33 trucks which are believed to be handy for bottling companies are to be made more available in Ethiopia. In addition to that, in the coming two years, Isuzu targets to introduce additional models including medium and long buses for public transportations.
In a related news, during two-days of business matching with local traders, representatives of Isuzu and Itochu were accompanied by other Japanese firms specialized in agricultural technologies. Marubeni Group, one of the oldest Japanese multinationals, has a long history in Ethiopia. Marubeni is well known for exporting coffee to Japan from Ethiopia. In addition to that, it is associated with the Ethiopian Airlines Group which leases aircraft engines and spare-parts. The group also supplies construction materials, cement materials, chemicals, steel, and zinc products to the Ethiopian markets.
Topcon Agriculture is among the group of companies that met with Ethiopian counterparts. Specialized in the modern agriculture, Topcon Agriculture showcased precision technologies that can make tractors operate by themselves. A precision technology which the company calls CropSpec works fitted on electric streets together with GPS and laser sensors so that it manages the accuracy of fertilizers and other chemicals applied and detect the growth of crops.
These companies have shown interests in the Ethiopian market. However, many of the Japanese firms are skeptic when it comes to direct investments. With pushes and continuous lobbying by public institutions such as Japan External Trade Organization (JETRO), a few have decided to set up an industrial park specifically designed to their interests.
It is to be recalled that last year, Tomonius Co. Ltd – a Japanese real estate developer – signed an agreement with the Ethiopian Investment Commission (EIC) to acquire 31 hectares of land in the Bole–Lemi II Industrial Park, currently under construction. That agreement, however, remains at its infant stage of implementations.
To Takao Seki, director general of JETRO Ethiopia office, there is a growing interest among the Japanese conglomerates to station operations in Ethiopia. The coming of the likes of Isuzu signifies a renewed significance in the business and investment environment they see in Ethiopia. According to Seki, a team of executives from Tomonius are in town to discuss and have further consultations with the government of Ethiopia.