An industrialist speaks

Yusuf Akgün, an aspiring Turkish investor and president of Akgün Construction, is currently working on one of his major projects yet – the construction of Ethiopia's largest industrial zone. The industrial zone,on completion, will focus on producing textiles and garments, processing leather products, the processing of food, the production of  pharmaceuticals and chemicals machinery and building materials. In addition, there will also be a technology park in the project. Various facilities, such as vocational schools, a university, a hospital, a shopping center, and a fair and an events area are all included in the master plan. With immense experience in the construction field, mostly in Europe, Akgün has been dealing with Ethiopian officials to kick-start the project, which is currently at a standstill because the government had suspended the project due to a potential threat posed at the Legedadi Dam and Water Treatment Plant as a result of the construction of the industrial zone. Akgün spent some time with Amare Aregawi of  The Reporter in Istanbul, Turkey, and talked about his plans to execute the project and what having an industrial zone is all about. He hopes that the government of Ethiopia will extend the necessary support for the project. Excerpts:

The Reporter: Can you tell me something about your background, particularly before you started the industrial city?

Yusuf Akgün: I’m very keen on trade and industry sectors. I have been the owner and chairman of Ikitelli Organized Industrial Zone since its establishment 45 years ago. We have operated in the construction sector for many years. In the 1960s, we started the production of PVC and other types of construction materials. So I came up with the idea of establishing Ikitelli Organized Industrial Zone in 1963. The former metropolitan mayor of Istanbul called it a major achievement. We moved all small- and medium-size industries out of the city. The main idea was to establish 15 industrial organizations but the biggest one was Ikitelli Organized Industrial Zone. I have been the chairman of Esco Cooperative since 1963 and I am responsible for the management structure and super- structure. There are 27 industrial zones under Esco and they are connected to the union of which I’m founder and chairman.

How many industries exit in Turkey right now?

There are 218 industrial organizations in Turkey and many small-scale enterprises in the villages. I won’t give particular names but let me explain it this way. If you go to supermarkets, you will realize that everything is produced here in Turkey. Textiles, shoes, metals, automobiles, electronics, plastics, and other products are made here. We also produce recycled materials such as glass were, plastics or metals. Packaging is also one of our leading sectors. So we are one of the leading countries in the packaging sector. We are just talking about export right now, not import. One makes a value of about USD 7 billion from the sector every year. We have a Turkish saying that goes, “Make the horses run head-to-head.” So industry, agriculture and animal husbandry go head-to-head like horses. It’s not possible for a country to develop without this.

How many people work in the industries?

Ikitelli Organized Industrial Zone extends over 1,000 hectares of land; there are 37 industrial sites with different sectors that are cooperatives and there are 30,000 enterprises. There are about 350,000 workers. The electric power they use is 300 MW. We have a metro system in the industrial site and it’s connected to the country’s railway system and airport. We are trying to contribute to the development of the industry. We have apprenticeship programs in the universities, high schools and elementary schools.

How has the government been helpful with the infrastructure you need?

That’s a very good question. First, the government made land available. The municipality and the government provided the land, water, electricity and infrastructure. I would like to emphasize that it doesn’t matter what government structure or party one is in, he or she can still support this project.

The ministers and the government change; but no one opposes it. Even though the government provided the land, they didn’t require environmental assessment report because environmental impact report is not requested for land that is provided by the government. All the industries have treatment plants so that they don’t harm the environment. For example, some countries in Europe, such as France and Germany, require environmental impact assessment report. And we started application of the assessment in 1995. If you ask about the politics of such developed countries, they don’t request reports once they finish their development. They would like to use it as a limit of development for developing countries.

When we look at the 37 industrial companies in the site and many enterprises as well, was it easy to get a license?

There is another unit that takes care of those licenses. So we are just like a municipality where the unit is 100 percent legal. The Ministry of Industry granted us legal permission to give licenses. So we also give construction licenses and operational licenses. Moreover, we provide electricity, telecom and other infrastructures. I also served as chairman of this unit for twenty years. It was a one stop-shop service to deliver everything at a time.

There are many roads, sewerage systems and canals here. Who built them?

All of the cooperatives in the industrial sites have a building system. The government allocated land for the cooperatives, so the construction was done by the cooperative members. But the roads and other infrastructure outside the main site are built by the government. They have licenses for every enterprise. We calculate the money for the construction up to the capacity of the enterprises. We do the work that the enterprises need with the money they provide. So, in the final analysis, the property belongs to the members so that they can rent or sell it.

Where do you get the manpower from? Do you have technical schools?

We have apprentice programs and schools, job training schools, and some large companies have their own training schools. The employees are trained in schools. But the most important thing is that the companies give them practical knowledge.

What about the technopark you built here?

First of all, the idea of building the technopark is to find something new. It can be material or an idea. The government has a really good approach to the technopark. They don’t collect any form of tax from them. These organized technoparks are like open universities. We provide the enterprises with experience and ways of improving the technoparks and we maintain cooperation with the universities so that the students can visit them.

Has the technopark conducted any research?

They are basically research and development places. For example, IT innovations have been introduced here. Various electronic productions were transferred to the enterprises as well. I’m not sure but our technopark also handed over an Unmaned Ariel Vehicle in addition to the repair service it provides to Turkish Airlines.

Are you exporting the technologies to the developed countries?

We produce technology of very high quality. We export mostly to European Union countries such as France and Germany. 60 to 70 percent of the export goes to European countries, mostly to Germany.

Are you saying that Turkey is a technologically developed country?

Turkey, these days, exports its own technology. This ides seemed very remote from us 30 years ago. It was very difficult to do this on our own but now we produce all types of machinery and construction materials for export. We have really good agriculture and food production as well. One company in Turkey even has 1,800 different types of materials under construction.

You are also planning to establish an industrial zone in Ethiopia. How is this project going?

Before we move to that I want to say something. Establishing an industrial zone is very crucial. It saves the city from pollution and it also provides a very good living atmosphere for the people. So let me tell you something important. We have small- and medium- size enterprises; the small became medium and the medium became large.  The government supports the organization of industrial zones. More than 60 percent of the industries in Turkey grew from small and medium industries.

Because of the industrial zones here, is the standard of living improving? Are there more clinics, schools and infrastructure around the sites?

It brings employment opportunity to the people. Just think about a chef who works for the enterprise after some 15 years; he would want to have his own enterprise. These enterprises are like schools.

So, what do you think about establishing an industrial zone in Ethiopia?

It was on November 30, 2008 that Turkey hosted a major event. It’s very common in Istanbul to host such a meeting by members of the industrial zone. Abadula Gemeda, the then President of the Oromia Regional State, was one of the guests. We hosted him for ten days and showed him every- thing here. He and the then ambassador to Turkey, who is currently the President of Ethiopia, Mulatu Teshome (PhD),  kindly asked me to establish an industrial zone in Ethiopia. They said that they would not leave unless we agreed. Then we signed an agreement. I signed that pre-agreement but I didn’t think it was real. Then, after six months, I went to Ethiopia to Abadula’s office. He gave us some direction on how to get the plot of land. As a result, they allocated the land for us. We didn’t know that Addis Ababa’s drinking water supply was near the land. The negotiation took nearly one year during which the late Prime Minister Meles Zenawi agreed to provide 30 percent of the money for the construction of infrastructure. He invited us to his office in March 2012 and assured us that the Ethiopian government would not be part of the project. After two years, we signed another agreement with the government. We paid the money and they allocated us the land. Around the end of 2012, the environmental impact assessment came out to stop us from building the industrial zone. The Ministry of Environment and Forests rejected the report that was first conducted by the University of Istanbul. While they were allocating the land, we were not aware of its proximity to the city’s water reservoir. We considered the allocation of the land was not a good choice and we thought it would cause a problem for future industrialists. We were told that it was impossible to undertake the project in Addis Ababa and the government offered us alternative plots in other parts of the country. But we didn’t accept it. We told them to give us land some 30 km away from Addis Ababa. Now, we are waiting for their response.

If you get that land, which would be 30 or 40 km away from the capital, will you be ready to continue?

There were 120 enterprises that agreed to be part of this industrial zone. First, there were American enterprises but they eventually went to Tanzania. So if they offer us the land, we would continue. But we lost a lot of time and money because of the problem that occurred. We just need them to give us a sovereign guarantee that there will not be any further problems. They also asked us to enroll some enterprises to be part of the project, but to make it happen, we have to bring in some enterprise from Turkey. The main idea of organizing an industrial zone is to bring in enterprises and the government should support us in this regard. They are supporting a lot this time and we will wait to hear from them. This is the most important thing that we would like to do in Ethiopia.