Al AmoudiÃ¢â‚¬â„¢s Midroc to challenge Ethiopian Trade Code
Addis Ababa, EthiopiaÃ‚Â Ã¢â‚¬â€œ MIDROC Ethiopia, an umbrella company administering over a dozen investments by the Ethiopian born Saudi billionaire , Sheik Mohammed Hussein Ali Al Amoudi, has established Derba Group of Companies (DG) at a cost of more than 71 billion birr.
Though the Ethiopian Trade Code has no room for the establishment of a holding company, the promoters of the umbrella company are looking for the code to be amended, Capital learnt.
The new umbrella company will assume a supervisory role and management of long-term strategic investments both technically and operationally to investments already made or to be made. The investments include steel, mining, cement, agriculture, transport, hospitality, and real estate.
The foundation for the development of DG was laid four years ago while commending the formation of Derba Midroc Cement Project Office. The office was entrusted to manage Derba Midroc Cement (DMC), Dashen Cement (DC), and Derba Lime and Chemicals (DLC) by then.
The broad investment portfolio of an integrated businesses taking into consideration both forward and backward linkages are in the making.Ã‚Â This will help to form interdependence between the flow of goods and services.
DG has already made a substantial investment in the construction materials manufacturing sector. This includes DMC, DC, Derba Transport (DT), Maya PP Bag, and DLM.
The group has also made an investment in agricultural development. Saudi Star Agricultural Development (SSAD), one of the largest agricultural investments in Ethiopia is incorporated under the group. It has a plan to grow crops like rice, sugar beat, wheat, barely, and maize.
DG aspires to invest back the wealth it will create from its strategic investments to the society it serves. Profits made from companies now under operation will be used to finance projects under the group such as Toussa Steel Mill (TSM), Sara Residential Development (SRD), Derba Workshop (DW), Derba Construction (DC), Derba Mining (DM), Derba Drilling (DD), Derba Cable Manufacturing (DCM), Derba Trading House (DTH), Derba Resort and Luxury Hotels (DRLH), Sheik Mohammed Hussein Ali Al Amoudi Foundation.
DG comprises three operating companies and thirteen projects. Every company and project operates independently. Each will have its own management and answerable to the executive group.
The total investment cost of the seven independently operating factories and projects under the group namely DMC, DT, Maya, DLC, TSM, SSAD and DC are estimated to be around 71 billion birr. Their annual sale turnover is assumed to exceed 41 billion birr while government revenue from value added tax alone would be over six billion birr per annum. The annual corporate income tax the government would rake in an estimated one billion birr.
In relation to employment opportunities, the seven companies are expected to create more than 370 thousand jobs both permanently and temporarily when they become fully operational. Collectively DG will represent much more than the seven mentioned establishments can create in terms of sales turn over, corporate tax and employment opportunity.
Source: Capital Ethiopia