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By Wudineh Zenebe
Posted to the web on January 19, 2010 |
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January 19, 2010 (ADDIS ABABA) – MIDROC Derba Cement factory concluded a deal with Volvo Truck Corporation for the purchase of 1,000 semi trucks (lorries) at a cost of 142 million dollars for Derba Transport Company, which is under establishment.
The transport company is being established to transport the products of the cement factory and that of Saudi Star Agricultural Development Plc, which is growing rice, mainly for export to Saudi Arabia. While the company is eventually expected to have 2,000 to 2,500 trucks under it, MIDROC has now settled the payment for the first 1,000.
The agreement was signed between Haile Assegdie, director general of Derba MIDROC, and Stefan Tilk, Northern Africa and Middle East area director for Volvo. The deal was made with Derba MIDRCO, because the transport company does not yet have legal status.
“This is the largest order in Africa we have ever got,” Tilk told journalists during the signing ceremony.
Volvo is represented in Ethiopia by Equatorial Business Group, another of Mohammed Ali Al-Amoudi’s companies. The negotiation of the trucks was, however, done directly between Derba MIDROC and Volvo.
Scania was also considered for the purchase, but then Derba MIDROC chose to give its full order to Volvo.
“The first 500 trucks will start coming as of February[2010],” Haile told Fortune.
Saudi Star Agricultural Company was established in August 2008 with a capital of 500 million Br. Mohammed Ali Al-Amoudi is said to have allocated an additional three billion dollars for the company.
This company would like to get 250,000ht of land in Ethiopia, but so far has only been given 10,000ht in Gambella where it is growing rice. So far its expenditures total 102 million dollars, including the 80 million dollars it spent for the purchase of Caterpillar agricultural equipment.
“We are producing high quality rice, and we expect to get 4.5tn to six tonnes per hectare,” Haile said.
55pc of the new produce will be exported to Saudi Arabia, carried to the port by the new vehicles, Haile said. The trucks will be of more use in the future when the company starts producing from the additional 250,000ht it is trying to get from the government to start manufacturing sugar and edible oil using its own plantations.
The cement factory also expects to produce 2.5 million tonnes of cement a year, achieving about a 100pc increase from the current production of existing factories in Ethiopia.
The trucks will be a national boost to the existing force of only 3,000 trucks nationwide, according to documents from the Federal Transport Authority (FTA).
EBG will be the supplier of spare parts once the trucks arrive in Ethiopia.
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