ADDIS ABABA (Reuters) — Two Ethiopian companies said on Monday they will work with Chinese telecoms gear maker ZTE Corp to build the African nation’s first mobile phone assembly plant.

The $5.2 million facility in the northern town of Bhar Dar will be able to produce more than 3,000 handsets a day once it is up and running in 18 months’ time, Janora Technology, one of the two Ethiopian firms, said in a statement.

The other local company is the Organisation for the Rehabilitation and Development of Amhara Region.

Janora said it and TIRET would build the factory, while ZTE would provide the machinery and technological know-how.

Industry sources said ZTE would also set up a CDMA network with capacity for 2.4 million Ethiopian subscribers.

Demand for mobile phones in the Horn of Africa nation has risen sharply following the upgrading of services and the expansion of state-owned Ethiopian Telecommunication Corporation.

(Reporting by Tsegaye Tadesse; Editing by Daniel Wallis and David Holmes)