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5799 views November 13, 2015 posted by Maja Wallengren

SPECIAL REPORT: Ethiopia Targets Spot As World’s Nr 3 in Coffee as Horizon Expansion Grows

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In honor of my visit nex week to Ethiopia, the birthplace of Coffea Arabica, I am republishing a number of my special reports on this awesome country and its wonderful countries. Amesege’nallo Ethiopia for bringing coffee to the world!

Ethiopian coffee has always been popular with consumers across the world and it’s common that new coffee lovers become coffee fanatics after trying one of the rich flavors from one of the thousands of original varieties found in the birth place of Coffea Arabica. Great news to importers and consumers alike are that the renovation programs implemented during the last 5 years are starting to produce lasting results and production is steadily growing. In Part 3 of the Tea & Coffee Trade Journal’s special series on Ethiopia we will analyze how the private investment now starting to reach the industry is reviving many of the huge formerly state-owned coffee estates and how Ethiopia is increasingly targeting to compete for the spot as the world’s 3rd largest producing country.

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BY MAJA WALLENGREN

It’s been a bit of secret for some years in the coffee industry but what is truly exciting to coffee lovers across the world, the birthplace of Arabica coffee is retaking a dominant role on the world map of coffee. And the largest single coffee farm in the world today is not found in the top grower Brazil, but in the hilly regions where Coffea Arabica was initially discovered growing wild in the Ethiopian forests in the southwestern region of Kaffa over 1400 years ago. Today the East African country is seeing a boom in production as efforts from renovation and replanting of old farms to the expansion of area are starting to take hold. From the tiniest small-holder growers to the biggest of the formerly state-owned estates, the volumes produced are surging.

“This year we will be exporting 32,000 bags (60-kilograms) and sell 8,000 bags in the local market while in its entire history the Bebeka estate had only managed to produce 16,000 bags for both the local and foreign market,” said Jemal Ahmed, Chief Executive Officer of the MIDROC Group which owns Horizon Plantations coffee estate group, the largest in Ethiopia with a total of seven private farms spread out through the country’s central and southern growing regions.

“After we took over Bebeka from the government four years ago we have up-rooted 50 percent of the coffee trees and yet we have already doubled the entire output of Bebeka from the remaining trees by applying the correct agricultural practices,” Ahmed told Tea & Coffee Trade Journal in an exclusive interview during a visit to Ethiopia, adding: “When the new trees mature we believe that production will gradually increase to 96,000 bags over the next three years.”

The massive Bebeka estate, which is home to over 10,000 hectares of coffee, is at the heart of Ethiopia’s new coffee growth. Based in the Kaffa Zone, as the region officially is called, this is where historians say that coffee was first found growing in the wild sometime around the 6th Century. Even today, vast areas of both Kaffa and the neighboring regions here are home to wild coffee growing in the forests. The Bebeka farm is the largest of the seven farms that Horizon Plantations purchased from the government in order to start injecting private investment into what just a few years back was an ailing Ethiopian coffee industry run into decay by poor practices, little management and a lack of market policies.

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New coffee at the Bebeka Estate, Photo Courtesy by Horizon

Together with the 6-farm Limmu Coffee Estate the seven farms have over 25,000 hectares of land under coffee cultivation, making it by far the biggest single-managed coffee estate group in the world. Horizon Plantations purchased the Bebeka and Limmu farms in central Djimma province for about $80 million in 2009 and the farms are part of investments worth over $500 million which Ethiopian born Saudi billionaire Mohammed Al Amoudi has invested in Ethiopia in sectors as diverse as agriculture to cement and gold mines.

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Mohammed Al Amoudi, Photo Courtesy by Tadias Magazine

“When Al Amoudi decided to go into coffee it was not just because coffee as an Ethiopian is in his blood but because that’s where he can do a real big impact on the socio-economic development needed for the country,” said Ahmed. “If we look at Ethiopia today just compared to a few years ago, now 85 percent of the children have access to elementary school and we have reduced child mortality by over 50 percent. This would not have happened if it wasn’t because the government is investing heavily into education and the coffee regions are a big part of this,” he said.

The work undertaken with the investment has been quick to bear results and it’s hard for visitors not to be impressed. Row after row of new young trees all planted within the last two years are found as far as the eye can see, some on bigger plateaus and exposed directly to the sun, but most grown in the forest under a dense cover of shade trees.

At both the Limmu and Bebeka estates, the priority has besides re-planting been on training farm workers in proper cultivation practices; from how to prune trees, to how to pick and process the coffee. Hundreds of washing units have been entirely replaced and several hundred kilometers of farm roads have been improved or built from scratch. The better and enhanced infrastructure has been a key to the boom in coffee in Ethiopia, said Kemal Mohammed, operations manager for Horizon Plantations.

“These kind of farms, more than any other because of the size of these farms, require a lot of investment, just the roads are a huge cost. Transportation has a huge impact on development and today all the coffee regions in Ethiopia are connected to the capital by asphalted road and the government is now starting to work on the inter-regional roads,” said Mohammed.

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New coffee at the Bebeka Estate, Photo Courtesy by Horizon

Precise production figures have always been difficult to verify, but since Ethiopia for the first tine surpassed 5.0 million 60-kilogram bags in total output in the 2004-05 harvest production has gradually expanded and is forecast to reach 8.5 million bags in the new 2014-15 crop year, according to the London-based International Coffee Organization. The Ethiopian Coffee Growers Association in the Ethiopian capital of Addis Ababa, meanwhile, has projected that production will reach between 9 and 10 million bags by 2020. Even if final figures should turn out to come in lower, it’s an impressive growth curve that Ethiopia has achieved in the last 10 years.

“After the military took over control of the country in 1974 they nationalized all the coffee farms and it’s just a little over 7 years ago that the government started the liberalization of the economy. We received the farms in Limmu and Bebeka with no infrastructure at all; there had been no investments for years, there was no infrastructure and there wasn’t even any machinery left,” said Mohammed. “With all the different initiatives we have put in place, from growing techniques to the input we use and the improved infrastructure, we expect that the average productivity will increase to the maximum of about 1.8 tons per hectare by 2018 from around 700 kilograms now,” Kemal said.

Driving through the Limmu estate an early morning, the beautiful evergreen of the coffee forests are cast in a fresh and bright light which stands out in a spectacular contrast against the deep red basaltic soils. New seedlings are everywhere along the road, ready to be planted on the farms, and a group of young girls are headed toward the school a few kilometers away in the blue and white uniforms. The Ethiopian coffee boom is happening and the positive impact on socio-economic conditions for the more than 20 million people who depend on coffee production for their daily survival here is a reality.

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Just north of Bebeka, on the other side of the Kaffa coffee town of Bonga town, local farmer Gerawa Yesuf is tending to a new field of young coffee seedlings, carefully providing husbandry for each new little green plant. The government, she said, gave local producer 4 kilograms of seed and when carefully nursed 1 kilo of seed produces 4,000 seedlings.

“This was all forest coffee,” said Yesuf, pointing out to each side of the farm, where a piece of land in the back is still covered by forest. “I have been here almost 25 years and I now have 4.5 hectares, of which 1.5 hectare is forest coffee and these 2.0 hectares we have planted with new coffee during the last two years,” she said.

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As Ethiopia’s coffee industry is embracing its new market-oriented and investment-friendly policies, coffee production is starting to grow to new highs that less than a decade ago few would have thought possible. And it’s not just in Kaffa that such expansions are taking place. From the famed southern coffee regions of Sidamo and Yirgacheffe to the eastern-most coffee zone of Harar, all reports are of bigger crops and better beans.

“When you go to Harar today, and any other coffee region for that matter, you see the renovation going on and you see that coffee farming is being done correctly, that farmers are applying new agricultural practices to the way they grow coffee,” said Orit Mohammed, owner of Dubai-based Boon Coffee importers and specialty roasters of Ethiopian coffees.

“And it’s definitively working because not only do you see much more coffee coming out of Harar these days, but you also note it in the quality and how the Harar coffees reaching the market now are coming back to the blueberry and wine taste it used to be so famous for,” said Orit, who herself was born in Harar and raised in Ethiopia.

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There is no denying that Ethiopia is increasing production and as growers are starting to get better princes and higher premiums at the source of origin, investments and labor into new plantings continue. In late 2014, Al Amoudi announced he was increasing his investments into coffee and other agricultural projects in Ethiopia, planning to double annual revenue within three years by investing an additional $500 million. The combined result of all the efforts being carried out on the ground has already returned Ethiopia as a significant player at par with Colombia and Indonesia competing for the spot as the world’s 3rd largest grower.

For Ethiopia, however, it was never about being grand in coffee but rather about supporting and embracing the role of socio-economic development that coffee still plays in Ethiopia.

“When I was approached about the opportunity to work for Horizon it was very clear that we would do a massive effort to improve the living conditions for the workers here and that motivated me to take this job because it’s a wonderful opportunity when you see all the improvements that are being done,” said Kemal, adding: ”Ethiopia is on the path of transformation.”

To read the full article, the rest of the Special Series on coffee in Ethiopia and more pictures for FREE see it HERE; Coffee Production in Ethiopia Grows

Maja Wallengren has been writing about coffee for more than 20 years from over 45 coffee producing countries across South-East Asia, East and West Africa and across Latin America. She can be reached at
http://spilling-the-beans.net/contact
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