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Ethiopia’s Tepi Coffee becomes fully privatised

Green Coffee Agro Industry (GCAI) has bought 49 per cent share of Tepi Coffee Plantation (TCP) that was held by Ethiopia’s government

GCAI already held the other 51 per cent share in TCP which is the second largest coffee plantation in the country. GCAI will pay the government US$35.2mn for complete ownership of the plantation. Of this amount, the company has already paid about US$12.8mn and the remainder will be paid over a five-year period, under terms of the deal.

A joint venture between GCAI and the government had been formed in 2011, with GCAI committing to improve the productivity of the plantation from 400 kg/ha to 1,200 kg/ha. The company exceeded the target, achieving 1,300 kg/ha and that formed the basis for the stake transfer agreement.

Following the transfer of total ownership, the company will start to replace old plants with new ones, planting new coffee plants in vacant spaces and pruning existing ones to increase productivity.

“We are importing different machinery from Colombia and Brazil for pruning and collection of coffee,” said Tadelle Abraha, general manager of GCAI. The company plans to invest more than US$21mn to start roasting and packaging ground coffee and to replace aging washing machines, imported from India and England, with new ones from Brazil, Abraha added.

The plantation currently produces more than 6,000 tonnes of coffee in a year and plans to increase the area for growing coffee to 20,000 ha in the next five years. TCP has won numerous awards in recognition of its environmental concerns and commitment to sustainable coffee production.

With the addition of TCP, GCAI now has three plantations, the other two in Kaffa, one covering 1,500 ha and the other 1,000 ha. Starbucks is a major buyer of GCAI’s coffee, according to Tadelle, who said that the company is also planning to sell coffee honey to Starbucks.