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Saudi investor's Ethiopian farms to raise coffee, tea output
June 25, 2015 / 11:40 AM / in 2 years

Saudi investor's Ethiopian farms to raise coffee, tea output

ADDIS ABABA, June 25 (Reuters) - Ethiopia’s coffee export drive will be boosted by higher output from the venture of a major Saudi Arabian investor, the manager of his enterprises there said.

Horizon Plantations and Ethio Agri-CEFT plans to more than double its coffee production and expand tea output.

Horizon Plantations is part of the MIDROC umbrella group of companies, majority owned by Saudi Arabian investor Mohammed Hussein Al Amoudi. Forbes magazine estimated his net worth at $10.8 billion.

“In the coming five years, we have a plan to raise our coffee produce to 25,000 tonnes,” Jemal Ahmed, managing director of the firms, said in an interview.

“One hundred percent of our coffee could be exported once we attained the quality we need,” he said, adding the group planned to set up an instant coffee processing plant soon.

The firm, which trades its premium coffee through the Neumann Kaffee Gruppe and counts Starbucks, Munich-based Dallmayr, Germany’s second largest roaster Tchibo, and Seattle-based Caffe Vita among its buyers.

It produces more than 10,000 tonnes of coffee from its 25,000 hectare plantations in southern Ethiopia‘s, of which 70 percent is exported.

Ethiopia, Africa’s biggest producer of the bean - anticipates record-high exports by the end of the fiscal year ending July. Drought and disease has hit rival crops in Latin America.

Total coffee production in Ethiopia amounted to 450,000 tonnes over the 2013/14 period, according to official figures. Officials expect a similar amount this season.

It exported around 190,000 tonnes in 2013/14, earning $841 million, down from the record high of 193,000 tonnes the year before.

The son of a Saudi Arabian father and an Ethiopian mother, Al Amoudi has invested heavily in Ethiopian construction, agriculture and mining.

He plans to invest $5 billion more in Ethiopia’s agriculture and agro-processing over the 2016-2021 period, said Jemal, who is also managing director of Saudi Star - another subsidiary which grows food crops in 15,000 hectares in Ethiopia’s Gambela region.

Among the sectors that will see an expansion include tea production. MIDROC’s Ethio Agric-CEFT produces a total of 5,700 tonnes of tea leaves annually from the 1,249-hectare Wush Wush plantation and the 860-hectare Gumaro, and expects production to rise to 7,000 tonnes in the next few years.

The firm is set to export 1,300 tonnes by the end of the 2014-2015. Its buyers include Unilever’s Lipton.

“Ethiopia is one of the very few countries which has opportunities to invest in virgin land. For us, (tea) was just a startup but the next step will be big,” Jemal said. (Editing by George Obulutsa and William Hardy)

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