Entrepreneurship Zone: 17 May 2023 :: Five businesses harnessing Ethiopia’s local resources

Wed May 17 07:59:10 CAT 2023

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Entrepreneurship Zone: 17 May 2023 ::  Five businesses harnessing
Ethiopia’s local resources

·          

We take a look at five companies capitalising on Ethiopia’s agricultural
and livestock potential.

1. From investment banking to agro-processing

Investment banker-turned-agro-processor, Yonas Alemu, founded and manages
Lovegrass Ethiopia, a health food company that utilises teff and other
Ethiopian grains in its product line-up. Teff, an ancient grain, is
celebrated as a superfood due to its high fibre content, gluten-free nature,
and its abundance of vitamins, minerals and protein. The company’s range
encompasses teff-based pasta, breakfast cereals, pancake mixes, and a
variety of snacks, with the majority of these products being made in
Ethiopia.

Lovegrass’s primary market is the UK, with subsequent markets including
Ireland, Sweden, Germany, and France. Sales are approximately split evenly
between third-party retailers and the company’s own website. Yonas recounts
that following the company’s success in winning several food industry awards
in the UK and France, numerous prominent European retailers began to stock
Lovegrass’s products. Among these are Ocado, Selfridges, Whole Foods, and
Planet Organic. “The day we first exported [teff] pasta to Italy was
probably one of my happiest.”
<https://www.howwemadeitinafrica.com/how-this-london-banker-built-an-ethiopi
an-food-company/146690> 

2. Ethiopian food company on path to vertical integration

SAMANU, the company behind the Tena brand of sunflower and soya bean oils
in Ethiopia, is gearing towards vertically integrating its manufacturing
processes. Majority owned by investors under the stewardship of private
equity firm 54 Capital, the company recently secured a $21 million growth
capital boost from Norfund, a Norwegian development finance institution, and
other private investors. This funding is earmarked to reduce its dependency
on imported raw materials and to seize export opportunities.

Currently, SAMANU imports raw sunflower oil, primarily from Eastern Europe,
which it then refines and packages locally. With the new investment, it
plans to construct a solvent extraction plant that will enable it to produce
raw oil from locally grown sunflowers. Additionally, the company will
extract oil from domestically grown soya beans and sesame seeds.
<https://www.howwemadeitinafrica.com/ethiopian-food-company-pursues-vertical
-integration/150859/> 

3. A unique business model to sell chicken in Ethiopia

Flow Equity is a poultry business that primarily targets rural households.
Its Ethiopian unit, EthioChicken, was established in 2010, and the company
has since extended its operations to Rwanda and Uganda through its
subsidiary, Uzima Chicken.

EthioChicken produces day-old chicks with a twist. Unlike most hatcheries
that target commercial producers of broilers (chickens raised for meat) or
layers (chickens raised for eggs), the company seeks to cater to rural
households. To achieve this, it has developed a distribution system that
involves a network of independent agents. These agents purchase the chicks
from EthioChicken, rear them until they are six or seven weeks old, and then
sell them to the end customers.
<https://www.howwemadeitinafrica.com/a-unique-business-model-to-sell-chicken
-in-ethiopia-rwanda-and-beyond/147889/> 

4. Leveraging the potential of Ethiopia’s leather industry

Ethiopia is home to the largest livestock population in Africa, with an
estimated 53 million cattle according to the Ethiopian Investment
Commission. However, only about half of the potential hide and skin
resources are currently being utilised. This market gap was identified by
Abai Schulze, an Ethiopian-born entrepreneur, during a trip home from the
US, where she was brought up after being adopted at the age of 11.

Schulze conceived a plan to manufacture high-end leather goods – such as
handbags, backpacks, and clutch bags – under the brand name ZAAF Collection,
utilising local talent and resources in Ethiopia. Today, ZAAF operates two
physical shops in the US and Addis Ababa, and its e-commerce platform offers
global delivery. The brand has expanded its line to include jewellery,
shoes, garments, and other accessories produced in Ethiopia, Senegal, Niger,
Kenya, and Rwanda.
<https://www.howwemadeitinafrica.com/ethiopia-international-market-for-local
ly-made-leather-products/121147/> 

5. Coffee roasting company taps into strong domestic demand

While most coffee produced in Africa is destined for profitable export
markets due to modest local demand, Ethiopia, Africa’s second most populous
nation of around 118 million people, is an exception. Here, the substantial
domestic demand for coffee has cultivated a thriving industry focused on
serving the local market.

Aster Mengesha, CEO of the mid-sized coffee roasting company Aster Bunna,
based in Ethiopia’s capital Addis Ababa, made a career switch from public
service in 1998 to establish her enterprise. At that time, she recalls,
there were only about four to five coffee roasters in the country. Today,
the industry has expanded to include over 100 roasters of various sizes.

Aster Bunna caters to both retail and wholesale clients, including
restaurants, cafés, embassies, hotels, and individual consumers. The brand
is available not only throughout Addis Ababa but also in other major
Ethiopian cities, including Bahir Dar and Hawassa. Moreover, Aster operates
a small coffee shop in the capital, offering customers a chance to sample
her blends.
<https://www.howwemadeitinafrica.com/ethiopian-coffee-roasting-company-taps-
into-strong-domestic-demand/131262/> 

- Howwemadeitinafrica

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