Five businesses harnessing Ethiopia’s local resources

EthioChicken sells day-old chicks to its trained agents. These agents then raise the birds for a month before they are sold to rural households

EthioChicken sells day-old chicks to its trained agents. These agents then raise the birds for a few weeks before they are sold to rural households.

We take a look at five companies capitalising on Ethiopia’s agricultural and livestock potential.

1. From investment banking to agro-processing

Investment banker-turned-agro-processor, Yonas Alemu, founded and manages Lovegrass Ethiopia, a health food company that utilises teff and other Ethiopian grains in its product line-up. Teff, an ancient grain, is celebrated as a superfood due to its high fibre content, gluten-free nature, and its abundance of vitamins, minerals and protein. The company’s range encompasses teff-based pasta, breakfast cereals, pancake mixes, and a variety of snacks, with the majority of these products being made in Ethiopia.

Lovegrass’s primary market is the UK, with subsequent markets including Ireland, Sweden, Germany, and France. Sales are approximately split evenly between third-party retailers and the company’s own website. Yonas recounts that following the company’s success in winning several food industry awards in the UK and France, numerous prominent European retailers began to stock Lovegrass’s products. Among these are Ocado, Selfridges, Whole Foods, and Planet Organic. “The day we first exported [teff] pasta to Italy was probably one of my happiest.” Read the full article

2. Ethiopian food company on path to vertical integration

SAMANU, the company behind the Tena brand of sunflower and soya bean oils in Ethiopia, is gearing towards vertically integrating its manufacturing processes. Majority owned by investors under the stewardship of private equity firm 54 Capital, the company recently secured a $21 million growth capital boost from Norfund, a Norwegian development finance institution, and other private investors. This funding is earmarked to reduce its dependency on imported raw materials and to seize export opportunities.

Currently, SAMANU imports raw sunflower oil, primarily from Eastern Europe, which it then refines and packages locally. With the new investment, it plans to construct a solvent extraction plant that will enable it to produce raw oil from locally grown sunflowers. Additionally, the company will extract oil from domestically grown soya beans and sesame seeds. Read the full article

3. A unique business model to sell chicken in Ethiopia

Flow Equity is a poultry business that primarily targets rural households. Its Ethiopian unit, EthioChicken, was established in 2010, and the company has since extended its operations to Rwanda and Uganda through its subsidiary, Uzima Chicken.

EthioChicken produces day-old chicks with a twist. Unlike most hatcheries that target commercial producers of broilers (chickens raised for meat) or layers (chickens raised for eggs), the company seeks to cater to rural households. To achieve this, it has developed a distribution system that involves a network of independent agents. These agents purchase the chicks from EthioChicken, rear them until they are six or seven weeks old, and then sell them to the end customers. Read the full article

4. Leveraging the potential of Ethiopia’s leather industry

Ethiopia is home to the largest livestock population in Africa, with an estimated 53 million cattle according to the Ethiopian Investment Commission. However, only about half of the potential hide and skin resources are currently being utilised. This market gap was identified by Abai Schulze, an Ethiopian-born entrepreneur, during a trip home from the US, where she was brought up after being adopted at the age of 11.

Schulze conceived a plan to manufacture high-end leather goods – such as handbags, backpacks, and clutch bags – under the brand name ZAAF Collection, utilising local talent and resources in Ethiopia. Today, ZAAF operates two physical shops in the US and Addis Ababa, and its e-commerce platform offers global delivery. The brand has expanded its line to include jewellery, shoes, garments, and other accessories produced in Ethiopia, Senegal, Niger, Kenya, and Rwanda. Read the full article

5. Coffee roasting company taps into strong domestic demand

While most coffee produced in Africa is destined for profitable export markets due to modest local demand, Ethiopia, Africa’s second most populous nation of around 118 million people, is an exception. Here, the substantial domestic demand for coffee has cultivated a thriving industry focused on serving the local market.

Aster Mengesha, CEO of the mid-sized coffee roasting company Aster Bunna, based in Ethiopia’s capital Addis Ababa, made a career switch from public service in 1998 to establish her enterprise. At that time, she recalls, there were only about four to five coffee roasters in the country. Today, the industry has expanded to include over 100 roasters of various sizes.

Aster Bunna caters to both retail and wholesale clients, including restaurants, cafés, embassies, hotels, and individual consumers. The brand is available not only throughout Addis Ababa but also in other major Ethiopian cities, including Bahir Dar and Hawassa. Moreover, Aster operates a small coffee shop in the capital, offering customers a chance to sample her blends. Read the full article