Executives of the Industrial Parks Development Corporation (IPDC) are spearheading a restructuring that would enable them to assume control of ailing manufacturing industries leasing space in the country’s state-run industrial parks.
“When FDI manufacturing industries shut their factories and leave the country or when domestic manufacturers stop operations due to a variety of factors, IPDC will take over and continue the operations,” said Tariku Adugna, IPDC chief of staff.
Executives say the policy is aimed at salvaging manufacturing industries and saving jobs and livelihoods. The Corporation will be in position to buy failing industries if the reforms go through.
“If the failing company has debt, we will also take on the debt. If there are assets, we will sell them off, pay the outstanding debt and continue the factory’s operations,” said Tariku.
The restructuring, which is reportedly being finalized, will also see the establishment of several subsidiary companies under the Corporation.
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“IPDC is being restructured with the aim of becoming a group. So far, its activity has been limited to developing and leasing industrial parks to private investors. But now, as industrial parks are transforming to special economic zones, IPDC is also transforming to undertake several commercial businesses. IPDC is a commercial entity, so it must maximize its business activities beyond leasing sheds,” said Tariku.
The subsidiary companies to be established as part of the restructuring include construction, logistics, hospitality, and input supply firms, among others.
Tariku disclosed that feasibility studies have been conducted and approved by the Corporation’s board.
IPDC has already acquired a trade license for its subsidiary construction company, which has set out on expansion and renovation works at industrial parks, according to Tariku.
The Corporation has also secured a trade license for a logistics services firm, which is set to cater to operators in parks and SEZs, according to Tariku.
“We are procuring heavy trucks for the logistics company. We are purchasing 20 heavy trucks in the first phase. We’ve identified how many total trucks existing IPs need. When the country imports fertilizer, all trucks in the country shift to transporting fertilizer. At these times, IP logistics are stuck. So we decided to establish a dedicated logistics company. This company also eradicates demurrage costs at Djibouti port,” said Tariku.
The Corporation is awaiting licenses for a hospitality and hotel business as well as a company that will provide inputs for agricultural and manufacturing businesses.
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