CONTEXT AND CHALLENGES
Transport vehicles: High demand, no manufacturers
Ethiopia is one of the most populous countries on the African continent and is pursuing an ambitious industrialisation strategy. The Government wants the country to join the group of emerging economies already in the coming years. Economic growth rates above the regional average and a likewise growing population are leading to an increased demand for transport vehicles. But up to now, the market has been depending entirely on imports. The country still has no significant manufacturers of passenger cars or trucks.
A national commercial vehicle industry could reduce purchasing and maintenance costs and would have a strong potential for job creation. An assembly plant for buses is to be created under the name of GOBES. The applicant, KALEB Services Farmers’ House PLC, was established in Ethiopia in 1994. Today it has 150 employees and specialises in the import and sales of agricultural machinery and trucks.
PROJECT APPROACH AND PROJECT GOALS
Assembly, sales, maintenance – and an own bus service
KALEB Services Farmers' House PLC is planning to establish the company GOBES in a consortium with Kurt Köchlin GmbH and private investor Mr Markus Körner. It is to assemble, maintain and operate buses for passenger transport in Ethiopia. This would make it the first private enterprise of its kind in the country. GOBES will be located in the town of Bishoftu, 70 km south-east of Addis Ababa. There, an assembly line, workshops and a training centre are to be built.
Beyond the sale of the vehicles, GOBES will offer the full range of repair and maintenance services and will operate its own fleet of buses for passenger transport. Bodies and chassis will be imported and modified for the Ethiopian market at the Bishoftu site. The company wants to operate its own bus fleet from Addis Ababa and Shashemane.
Since a nationwide bus service is planned, maintenance services will also be offered in other parts of the country within the first two years after the company's foundation. For this purpose, a network of sales outlets and repair shops is being established.
STATUS AND OUTLOOK
More than 300 new jobs at the Bishoftu site
GOBES plans to create more than 300 jobs at the new plant in Bishoftu. The site, which is already owned by the applicant KALEB, will house the administration, assembly plant and workshop. In the medium term, GOBES wants to grow strongly, also in terms of the number of employees. To prepare them for their future jobs, qualification measures are planned for 140 of the new employees.
GOBES wants to become a major seller of buses in the Ethiopian market and, in a second expansion step, an important player in the emerging commercial vehicle industry. The consortium is planning to invest 4 million euros. The Facility Investing for Employment GmbH grants a subsidy of 1 million euros (25%).
The Facility Investing for Employment (IFE) of KfW Development Bank is part of the Special Initiative on Training and Job Creation of the German Federal Ministry for Economic Cooperation and Development (BMZ). With its support, the facility wants to remove barriers that prevent the creation of new and better jobs in the private sector.