The Ethiopian Investment Commission (EIC) revealed on May that ten global companies had signed memoranda of understanding (MoU) with the Ethiopian Investment Commission (EIC) to set up factories inside the Kilinto Pharmaceutical Industrial Park.
With a total size of 337 hectares, the industrial park is nearing completion. Once completed, the Kilinto Pharmaceutical Industrial Park will have the capacity to accommodate more than 1,000 factories. Located in the south of Addis Ababa, Kilinto is being developed in two phases in collaboration with the World Bank Group.
The industrial park, which is fully financed by the World Bank, features 18-km of asphalt road, provision of essential social services, green spaces, warehouses, business centers, and car parking space, according to the Ethiopian Industry Parks Development Corporation (IPDC).
According to Adenan Bere, Communications Director at the IPDC, Ethiopia expects to lure world-class companies to help its economy through the export of pharmaceutical products as well as import-substitution.
Bere also noted that in addition to attracting foreign firms to penetrate Ethiopia’s emerging pharmaceutical sector, the IPDC is also working with local financial institutions to support local firms to invest in the industrial park.
As the Ethiopian government in recent years embarked on attracting foreign firms in the pharmaceutical sector, Chinese firms are becoming among the major international firms in exerting their capital and technology in the industry.
In June last year, Chinese pharmaceutical giant, Sansheng Pharmaceuticals Plc, had inaugurated its production plant in Ethiopia amid Ethiopia’s higher demand for import substitution in medicines.
Sansheng Pharmaceuticals Plc commenced its first phase of production in June 2018 inside the premises of the Eastern Industry Zone on the outskirt of Ethiopia’s capital.
The Ethiopian government, which has been expressing its concern over the minimal share of local medical drugs production for the country’s domestic use, also stressed the benefits of the Chinese pharmaceutical firm in saving a substantial amount of hard currency through import substitution.
Demeke Mekonnen, Deputy Prime Minister of Ethiopia, said during the plant’s inauguration ceremony that despite the Ethiopian government’s various measures to support the pharmaceutical sector, the “sector has not yet evolved into where we projected it to be — both in terms of its investment portfolio, production capacity, technology acquisition and the creation of employment opportunities.”
He also noted that the sector is still dominated by heavy importation of pharmaceutical products from abroad, which currently represents about 85 percent of the annual 500 million U.S. dollar local market.
“Your investment to Ethiopia could not have come at a more opportune moment,” Mekonnen said.
Ethiopia is currently constructing or has commissioned 15 industrial parks as part of a plan to turn the country into a light manufacturing hub in Africa by 2020.
Chinese companies, which are the leading partners of the Ethiopian government in the construction of industrial parks across the country, are also actively engaging their capital and technologies by investing inside the newly built industrial parks.
