French multinational logistics companies enter Ethiopian market

French multinational logistics companies enter Ethiopian market

Trade

Following the recent decision of Ethiopian Government to liberalization its logistics sector, Bolloré Africa Logistics and CMA/CGM Group of France venture with two local logistics companies.

The executives of the two French companies who accompanied their President Emmanuel Macron, who is on state visit in Addis Ababa, signed agreements this morning with Ethiopian companies namely, CSL Logistics and MACCFA Freight Logistics.

“Following the government’s decision to open the sector for foreign investors, we have been discussing with the French CMA/CGM about the possible venture. Today we signed memorandum of understanding that will allow us to sell 49% of our share to CMA/CGM,” Mulugeta Assefa, CEO of MACCFA Freight Logistics told NewBusinssEthiopia.com.



MACCFA Freight Logistics of Ethiopia has been working as representative of CMA/CGM for many years, according to Mr. Mulugeta. Globally CMA/CGM Group is also the third largest container shipping companies next to Maersk and Mediterranean Shipping Company (MSC).

“The venture has many bonfires to our company…It will enable us to access their system easily, technological advancement and train our staff, among others. But most of all the experience and expertise of CMA/CGM will enable us to address some of the challenges the logistics sector of Ethiopia is currently facing,” he said, indicating that the venture which soon begins with handling and shipment of containers is expected to expand beyond import-export trade by involving other local logistics operations.

He indicated that such venture is critical items of modernizing and improving the trade logistics and economic performance of the country. Global logistics performance reports show that Ethiopia’s logistics sector has not been doing so well as compared to its peers, such as, the small landlocked country in East Africa, Rwanda.

CMA/CGM Group has also been partnering with the state-monopoly, Ethiopian Shipping and Logistics Services Enterprise. The heads of the two companies have also signed letter of intent this morning for the management of the Modjo Dry Port.

This morning at the Hilton Addis Hotel Bolloré Africa Logistics of France has also signed venture agreement with CLS Logistics of Ethiopia, a private company which has been partnering with Bolloré for over 11 years.

“The new agreement will enable us to consolidate our logistics offer in Ethiopia. And also reflects our desire to make a long-term commitment to strengthen the national logistics sector through structuring investments, a transfer of know-how with the creation of 300 local jobs ad the setting up of complementary services,” said Patrick Gerenthon, Cluster Manager Bolloré Africa Logistics for Horn of Africa.

As part of the agreement, the joint venture plans to invest 15 million euros to build a new fully secured and modern logistics hub. The project involves construction of multi-activity warehouse o 12,000 meter square of land to handle different export ad import products.

I addition to liberalizing the logistics sector, the government of Ethiopia has also decided to end its monopoly over Ethiopian Shipping ad Logistics Services Enterprises by selling minority share to foreign companies.

The long awaited Ethiopia’s liberalization and partial privatization plan of its mega companies involves ending monopoly in Ethiopian Airlines, Ethio Telecom, electric power and other projects such as sugar companies.