Fruits & vegtables
Developing a pre-cut and packaged fruit and vegetable industry in Ethiopia offers an investment opportunity, particularly for investors with expertise in horticulture and retail. Here we feature an example of two investment-ready businesses on the ground today, in which an investor can invest directly or co-invest to develop this up and coming sector.
Ethiopia’s fruit and vegetable sector offers attractive investment opportunities, with over USD $245 million in fruit and vegetable export earnings, increasing by 183% in less than a decade. Conditions in Ethiopia make it possible to cultivate high quality produce of virtually all tropical, sub-tropical and temperate horticultural crops, all year round.
To date, the majority of fruits and vegetables are exported in their raw form and historically, over 80% of this has been directed to lower value markets such as Djibouti and Somalia. With rapid developments in infrastructure, road networks and cold storage facilities, Ethiopia offers potential for the right investor to develop its existing production and export of pre-cut and packaged fruits and vegetables.
WHY INVEST IN ETHIOPIA?
Horticulture as a government priority > Fruit and vegetables are a priority sector for the Government of Ethiopia (GoE), which aims to increase production by 47% between 2015 and 2020 based on its Growth and Transformation Plan II (GTP II). Domestic and international investors are welcome and will be given prior attention to encourage them to invest specially in the field of fruits and vegetables. There is strong alignment with the development of a pre-cut and packaged fruit and vegetable industry, with the GoE already prioritizing the need for a fruit and vegetable cold storage program, in addition to the existing cold storage facilities currently available at Addis Ababa, Bahir Dar and Mekelle .
SPOTLIGHT ON A POTENTIAL INVESTMENT OPPORTUNITIES
Production can take place through various models, each of which has its own advantages and challenges, as well as slightly different yield rate, profitability, and time frame. In general, while smallholder sourcing is attractive from a livelihoods promotion perspective, and is strongly advocated by the government, it is both challenging for high-value crops and returns lower volume and/or higher cost yields. That said, there are some successful businesses below that have integrated smallholder sources into their supply chains; an approach, that in the short term may provide the “best of both worlds”, enabling effective transfer and development of skills and technology, as well as boosting production volumes and incomes.
Get in touch
The Agricultural Transformation Agency is an initiative of the Federal Government of Ethiopia Off Meskal Flower Road, across from Commercial Graduates Association