Ethiopia says it may grant additional land to Karuturi Global

Bloomberg | 5 May 2011

Karuturi farm in Ethiopia (Photo: Arte/CAPA)

By William Davison

Karuturi Global Ltd. may receive an additional 200,000 hectares (494,211 acres) of land from the Ethiopian government if its current 100,000-hectare concession is developed within two years, the Agriculture Ministry said.

“We have an agreement to give additional land if they accomplish the 100,000 hectares within two years,” Esayas Kebede, head of the ministry’s land investment support directorate, said in a phone interview today from Addis Ababa, the capital.

On April 29, Esayas said the government in November reduced Karuturi’s concession by two-thirds from 300,000 hectares because the area was too large for a single company to manage and to allow for an annual migration of antelope in southwestern Ethiopia. Karuturi yesterday denied the concession had been reduced.

“The information seemed to be baseless because Karuturi has not received any legal letter about the reduction from the Ethiopian government,” Niladri Mondal, a spokesman for Karuturi, said by phone from Mumbai today. “If a letter had been given, we would have taken it into consideration.”

Karuturi’s lease agreement, published on the ministry’s website, says the company will receive an additional 200,000 hectares if it develops the plot adequately within the specified period.

Karuturi, which has invested $100 million in Ethiopia so far, plans to have 65,000 hectares in production this year and sell its first harvest in October mainly within Ethiopia and to other East African nations, Chief Executive Officer Sai Ramakrishna Karuturi said in an e-mailed statement in February. The company is growing crops including rice, palm oil, sugar cane and cereals.

The government is happy with the Indian company’s development of the land so far, Esayas said today.

Ethiopia has transferred about 350,000 hectares of agricultural land in the Gambella, Benishangul-Gumuz and Southern Nations regions since September 2009, according to the ministry. Investors include companies from Ethiopia, India, China, Saudi Arabia as well as Ethiopians living abroad.

--Editors: Paul Richardson, Antony Sguazzin.

To contact the reporter on this story: William Davison in Addis Ababa via Nairobi at [email protected].

To contact the editor responsible for this story: Paul Richardson in Nairobi at [email protected].

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