Bangalore-based Indian company, Karuturi Global, the world’s largest flower producer, couldn’t get enough land in India to compete with rivals. So the company went to Ethiopia early this year and leased 1,200 square miles of land—larger than the State of Rhode Island—to grow flowers. After a few years, the land will become useless due to heavy use of fertilizers. Millions of Ethiopians are facing food shortage and yet the World Bank-financed dictatorship leases huge tracts of land to foreign agribusiness to grow and export flower.
Read the whole story below.
Corporate India Finds Greener Pastures—in Africa
By Mehul Srivastava and Subramaniam Sharma | BusinessWeek
Indian billionaire Ravi Ruia has flown to Africa at least once a month for the past year and a half. He’s invested in coal mines in Mozambique, an oil refinery in Kenya, and a call center in South Africa. Soon, he may also have a power plant in Nigeria. “Africa looks remarkably similar to what India was 15 years ago,” says Firdhose Coovadia, director of African operations at Essar Group, the $15 billion conglomerate headed by Ruia and his brother, Shashi. “We can’t lose this opportunity.”
Faced with increasing competition and a welter of bureaucratic obstacles at home, Indian companies are looking to Africa for growth. Since 2005 they have spent some $16 billion on the continent, vs. at least $31 billion for the Chinese, according to data compiled by Bloomberg and the Heritage Foundation, respectively. Bharti Airtel, India’s largest mobile-phone provider, in June paid $9 billion for the African cellular operations of Kuwait’s Zain. In 2008, India’s Videocon Industries paid $330 million for two coal mines in Mozambique, and India’s state-run fertilizer maker bought an idled Senegalase phosphorus producer for $721 million.
Beyond those big deals are dozens of smaller acquisitions and investments by Indian companies. “Compared to India, valuations [in Africa] are quite attractive,” says Anuj Chande, who heads the South Asia Group at accounting firm Grant Thornton in London. “We’re expecting to see a lot of midsize deals across a variety of sectors.”
The Indians view Africa as a place where they can replicate the low-cost, high-efficiency business model they have honed at home. Like India, Africa has hundreds of millions of underserved consumers eager to buy products tailored to their needs. Consumer spending in Africa may double, to as much as $1.8 trillion, by 2020, McKinsey & Co. predicts, an increase that would be the equivalent of adding a consumer market the size of Brazil. As a pioneer in sales of single-use sachets of soap and shampoo (along with Unilever (UL) and Procter & Gamble) for lower-income Indians, Mumbai-based Godrej Consumer Products understands “low-cost, value-for-money products,” Chairman Adi Godrej said in a May interview. In June his company acquired Nigerian cosmetics maker Tura, and in 2008 it bought South African hair-care company Kinky. “We want growth. Whether it’s from inside or outside India, we are agnostic,” Godrej said.
Indian companies also see Africa as a hedge against a possible slowdown at home. “If tomorrow the Indian economy was to take a U-turn, then at least you have other markets which are growing,” says Neeraj Kanwar, managing director of Apollo Tyres, India’s No. 2 tiremaker. His company bought South Africa’s Dunlop Tyres for $62 million in 2006, giving Apollo two manufacturing plants on the continent and brand rights in 32 African countries. Apollo aims to triple sales, to $6 billion, by 2015, with 60 percent of revenue from abroad, vs. 38 percent today. “Africa is going to give me growth,” says Kanwar.
Essar has endured endless squabbles with Indian landowners who refuse to make way for steel mills. Like other Indian companies tired of regulatory headaches at home, it moved into Africa and now has 2,000 employees there. Bangalore-based Karuturi Global, the world’s largest rose producer, couldn’t get enough land in India to compete with European and African rivals. Many times flowers wilted on the tarmac as cargo flights were delayed or canceled, including a big Valentine’s Day shipment. So in 2004, Karuturi bought a small plot in Ethiopia, and sales have since grown elevenfold, to $113 million in the year ended Mar. 31. Karuturi now leases 1,200 square miles of land—larger than the state of Rhode Island—in Ethiopia and sells more than half a billion roses a year. “Africa offered us a scale we could never reach in India,” says Managing Director Sai Ramakrishna Karuturi. “I’d love to do more in India, but getting even 1,000 acres near Bangalore took years.”
21 thoughts on “Indian co. leases land in Ethiopia the size of Rhode Island”
IMF destroyed Mali’s agricalture sector by dictating a commercial crop rather than food crops to take priority. The result has been a lot of money for the tobaco industry, hunger for the people, and the government manages to remain in power with the help of the West. When you have a government that needs the West to stay in place, the end game is the same. I fear for Ethiopia’s fertile land.
Indians have destroyed their land thanks to intensive farming. This is a classic example of short termism. It is not sustainable. They will move to another virgin land after this land is exhausted. In the mean time, Woyane gets the dollars it desperately needs to stay in power. The next generation will certainly pay the price.
The names of the people who wrote this look like from India. They have full knowledge of the billionare investor and the consequence of this huge land grab. Does Ethiopia lack educated minds who can do this research and analysis before signinig such long term deal to foreign investors ? no the problem is – the governmet in Ethiopia did not give educated Ethiopians a chance to give their opinion. The decision being made now as a long term consequence for generations to come.
Folks: this is genocide by other means.
It is typical colonial economy whereby in previous periods at the start of the older form of direct colonialism, colonialist money men went to Africa forcefully grabbing fertile land areas from African farmers who were farming highly nutritive traditional staple agricultural products for human needs and human consumption and replaced them with cash crops production for the purpose of profit making for the few alone.
As it robbed fertile land areas from the indigenous farmers producing food for human needs, most researchers agree that it was the start of unjust system of African famine in the entire history of African existence. This is great injustice, leading the society deep down to the bottom of misery and endless impoverishment. The system is robbing our futurity and the futurity of our children down the line.
WE MUST RESIST IN UNITY WITHIN DIVERSITY!
More about the mythology of the destructive commercial commercial agriculture versus humanistic agriculture for human needs.
http://www.context.org/ICLIB/IC42/Myths.htm
It is indeed troubling to watch these enemies of the people selling the country away acre by acre to foreigners. What can we do to stop it. If it is allowed to continue unopposed, I think, in the near future we may not have a country left to call home. This is a clear menifestation that their mission is to loot and distroy the country. Never seen or heard in history, a country being distroyed by it’s own sons. I can’t imagine how much hate they harbour against their own country . What is driving them to this kind evil act?
1,200 square miles?? O_0
To give you a perspective of how large that is, consider that all of Addis Ababa is 205mi2. Therefore this plot is nearly 6 times the size of Addis Ababa.
Hmmm I wonder how much they paid the Ethiopian mobs.
“Africa offered us a scale we could never reach in India,” says Managing Director Sai Ramakrishna Karuturi…” Karuturi’s country couldn’t lease him more land, as the Indian government does not want to see its people suffer from the bane of famine in their country. In Ethiopia Meles couldn’t care less if millions of Ethiopians have nothing to eat and suffer from famine. That’s why he allows the Indian Co. to produce half a billion roses per year using harmful fertilizers. The fertilizers destroy the land rendering it useless for staple food production. In the meantime Meles fills his pocket with the money the foreigners pay (most likely to accounts abroad). He says Ethiopians cannot own land, but he is selling Ethiopian land as if he owns the land as his personal property!! Meles flouts the Constitution he imposed on the Ethiopian people, but he thinks the laws do not apply to him and allows himself to break them.
Tizibt, what part of the “lease” you don’t understand? They leased the land not “owned” the land. Gabito? Get your facts straight before trying to blabber on subject you don’t have a clue. If you did – you would have applauded the government’s decision to open job opportunity for ethiopian workers. You don’t ask how many jobs were created because of this – you rather ask your hate filled usual accusation of “Meles fills his pocket with the money”. How do you know that. Do you know how much they paid? Clueless again. Go to the department of agriculture website and find out how much of land is owned by foreign investors in this great country we call USA. You are condemned to stay behind – may God help with that.
Biru – very apt name, eh? How much do you get paid by Meles to defend him? I am being kind to you asking how much you are being paid. My response to you should be – don’t bother your hashish induced hallucinating little brain to try to explain anything. Those of us who know what’s going on don’t need to look for cooked statistics in the dusty files. Our information is direct from those on the land. Continue tripping! kkkkkkkkkkkk!
Tizbt, please be ashamed to say “little brain” to anybody you don’t know. I wish you could give an answer to his questions rather than acting like a bitch. People like you are a turn off to any meaningful discussion. May be he caught you in mid of your mood swings. “Those who of us who know what’s going on”, yes right, Ms. know it all. If this is what your knowledge makes you say to perfectly made argument – well Biru is correct you are cursed to stay behind for ever! KIiKiKiKiKiKiKiKiKi.
It’s not difficult to surmise why you sympathize with Biru. You know the saying “birds of the same feather flock…” how did the saying go? You finish it. Go ahead be my guest and have a meaningful discussion with Biru!
Tizibt, now it seems like you having a bad hair day. I can see your misery in life through your writing. You are acting like a bird who lost a wing. Can’t fly – what to do now? That’s precisely you! Go get a life for whatever is left in you.
Jemal – why don’t you have a “meaningful discussion” with Biru since you belong in the same league but just don’t fry those little brains!
Jemal my friend, don’t even bother to talk to little Tizibt about any meaningful discussion. She’s filled with hate that she is unable to see things clearly. She’s a waste of time with little time to spare. The train of progress has passed her by a long time ago. She might be trying to find her place somewhere where perverts like her reside – cyber space. Get lost my clueless Tizibt.
Finally, I have succeeded in getting you two together! What did I say – birds of the same feather etc.” Please go ahead, continue frying your little brains since only you two can understand each other! Be happy and enjoy your ‘progress’!
Fascinating conversation between Biru, Tizibt and Jamal. If you ask me Tizibt seems to have a hard time accepting facts. She does not have the temperament and patience to be who she claims to be, I KNOW IT ALL. As a vivid reader of this web site, I’ve noticed that she always asks about the amount of payment one received to defend this or that whenever a counter point is made. This clearly shows she belongs to the era of corruption and bribe. The politics of either you are with us against us has no place in the 21st century. That’s the one thing she misses. Guys, don’t take it personal. She is a lost cause if you ask me. Derg and Feudalism are not coming back little Tizibt.
Meketa, You’ve been aching to join in, haven’t you? Woyanes can’t hide their shame. It’s easy to smell the foul stink when you open your mouth to defend the indefensible. You need to earn your living by attacking all who are against your evil boss, Meles Zenawi, who is spending the aid money and the money from the sale of Ethiopian land on sycophants like you. Don’t take it personal – this applies to all of your kind.
Tzibt tinshewa, you just made my point clear – unbeknownst to you, of course. It takes one to know one. For you it’s all about getting paid. Your world revolves around money not principle. Kick back, bribe, favoritism, elitism and tewelje-net are not coming back. Get to gripes with that. You are a decayed and soiled piece of trash. You don’t belong to any forum let alone intellectual discussion. You feel like the power belongs to few of you not to the masses. The people of Ethiopia have no problem living in harmony despite their many differences or views. Every time you talk you spit hate and anger – which are typical characteristics of losers. You are the ass-kisser type of the past – not me.
when meles goes this greedy.. indians lose the land and meles goes to prison
Tizibt vs Meketa : Heavyweight bout !!! Who is your winner? Please vote. I say the winner is Tizibt !!!
I wonder about the argument held among Tizibt, Biru, Jemal and Mekete,,,Guys this is not about belonging to a certain political party or Ethnic group. This is about Humanity! Who can deny that the government keeps selling the country of course to fill individual’s pocket with dollar? Who can deny that the farmer; the real owner of the land is dying of famine or is being a lanbourer on his own land? How can you fail to think this and care about humans; Ethiopians? Yes they are grabbing land! they are selling the country!! Please,,,be human guys! Tizibt, having a good point, you fail to argue with them rather you guys keep insulting each other!