Ethiopia: First wines to attract fresh investment

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The first wines at the Ziway vineyard are to be bottled this year, bringing the promise of attracting new foreign investment.

In Ziway, southern Ethiopia is an unexpected sight — vineyards bursting with merlot, syrah and chardonnay grapes ripening in the African sun.

The scene is more reminiscent of France’s Beaujolais region than this corner of the Horn of the Africa, but the French beverage giant Castel, which bottled its first batch of Ethiopian wine in 2014, is helping change the way outsiders view the country. It is also boosting government hopes of attracting foreign investment, key to its plans to reach middle income status by 2025.

The country’s growth rates are already among the highest in Africa, hitting 11.2% in 2013, according to the government, although the International Monetary Fund (IMF) puts the figure at 8.2%.

For Castel, the ambition is merely to produce good wine, and Ethiopia is an ideal, if surprising, place to do that.

“We don’t find it difficult because the climate is good, it’s not too hot,” said Castel’s Ethiopia site manager Olivier Spillebout, at its vineyards in Ziway, 160 kilometres south of the capital Addis Ababa.

The sandy soil, short rainy season, cheap land and abundant labour were what drew the company’s billionaire president Pierre Castel. The company has been working in Africa for half a century, and in Ethiopia since 1998 when it purchased a state-owned brewery, St George.

But the late prime minister Meles Zenawi thought a vineyard would boost Ethiopia’s image abroad, and asked Castel if it would be interested. So in 2008 the firm spent $27m setting up Ethiopia’s first foreign-owned vineyard.

Castel aims to sell half of the 2014 production of 1.2m bottles on the domestic market, and half to Ethiopian diaspora communities in North America, Europe and elsewhere in eastern Africa.

In Ethiopia, a bottle of Castel wine sells for $10 dollars, and is of better quality than comparably priced imported wines from South Africa or Italy.

The bottle’s design echoes Ethiopian traditions, showing the bulbous carafe traditionally used to serve the still popular, and potent, honey wine.

Even so Spillebout claims his wines are popular with drinkers of sweet and syrupy traditional wines, which are often served with raw meat, a local delicacy.

Castel said it does not expect to earn profits from its Ethiopia vineyard until 2016, eight years after it set it up; its main concern is keeping up with demand, having sold nearly a quarter of its first batch of wine since April, and said it plans to expand the vineyard to eventually boost production to three million bottles a year.

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