Addis Fortune | 14 September 2009
Sheik Mohammed Hussein Ali Al Amoudi, who had just been identified as the second richest person in Saudi Arabia, is preparing to farm cereals on hundreds of thousands of hectares of Ethiopian land for export to Saudi Arabia; a deal that could be worth 80m dollars has been signed with Ries Engineering for the supply of agricultural equipment.
The Sheik has formed a new company, Saudi Star Agricultural Development Plc, to do the job with a budget of one billion Birr. Saudi Star was licensed by the Federal Investment Agency on August 20, 2009, with a registered capital of 500,000 Br. The company, which requires a total of 200,000hct, has so far received 10,000hct in Gambella Regional State. The Company will seek more from the Amhara, Oromia and Benishangul regional states, according to Nebiyu Samuel, senior advisor and special assistant to Al Amoudi.
This investment followed a directive issued by the Council of Ministers five months ago allowing investors to use water in government-made irrigation dams at little-to-no cost, says Nebiyu.
“It is a company that has taken advantage of the incentive package,” said Asfaw Dingamo, minister of Water Resources. “We have granted it permission to use the water.”
The water which Saudi Star will use comes from Alu Wero Dam, which was constructed during the military regime.
Another company the Sheik formed a year ago, Horizon Ethiopia, is seeking to get 100,000hct in Gambella, out of the total 250,000hct it requires. The company requires this land for the development of palm trees, from which palm oil is extracted. The company has not yet received the land because of opposition from environmental groups and local residents.
Environmental groups are denouncing the plan to give the land to the company because the area is completely covered by woods. The locals added their voice to this by letting know the officials and the company know that they would use force to stop the handing over.
The new plot for Saudi Star has not caused any problems because it had been set aside for agriculture from the outset, according to Guaner Yer, vice president of Gambella Regional State.
“The company demands even more land than this,” he said. “We have promised them that we will give them more land when they have put the first 10,000hct to use.”
Saudi Star was created after the Sheik presented a sample of rice to Abdullah Bin Abdul Aziz, the King of Saudi Arabia, who liked the quality. Nebiyu said that it was after this that the Sheik set out to produce one million metric tonnes of rice, wheat and maize.
“Sheik Mohammed is increasingly becoming more interested in leaving urban areas to focus on agriculture and agro-processing,” Nebiyu said.
Saudi Star has signed a deal with Ries Engineering for the acquisition of Caterpillar brand agricultural equipment, which is not yet official because of a few things to be completed by the supplier, according to Yiheyis Assefa, assistant managing director of Ries Engineering. The equipment could be worth 80m dollars.
By WUDINEH ZENEBEFORTUNE STAFF WRITER