Teklebrehan Amabye & Family (TAF), a private conglomerate gaining momentum as a dominant local company, has signed a contract with a local IT firm, Fairfax Technologies Plc, to acquire a Systems, Applications & Products (SAP)-powered enterprise resource planning (ERP) solution. The contractual value of the solution borders on 25 million Br, company sources disclosed. market price of ERP ranges from 5 to 8 million USD depending on the size of the company. Inking the deal on March 17, 2016, at TAF’s corporate office on Asmara Road, CMC area, the company will be the first private business in Ethiopia to deploy the technology.


The ERP solution offers companies the ability to exercise real time collaborations among their various divisions and departments, helping them operate as one unit. It is a customized technology solution which enables businesses to integrate their entire operation, as well as manage the flow and process of information with users accessing one database under the company’s possession. It gives top executives a cutting edge advantage in decision making, relying on real time data.


SAP and ORACLE are the two companies known across the world for providing the solution, working with local implementers. Fairfax Technologies, a US-based company with a local subsidiary, works with both companies as their East African implementer. Owned by close to 20 shareholders, with Zemedeneh Negatu as the major stockholder, the company was registered here in 2006 with initial capital of close to 10 million Br.


Fairfax Technologies has since bagged multimillion dollar contracts with Ethiopian Airlines for a SAP made solution; the Commercial Bank of Ethiopia (CBE), and ethio telecom, for ORACLE. Worldwide, the company has signed contracts worth 70.5 million dollars, with an annual turnover of 25.6 million dollars last year. Its business in African countries has an annual volume of close to 20 million dollars, company sources told Fortune.


The latest contract with TAF is the first for Fairfax Technologies to enter with a private company operating in Ethiopia. Although consolidated in 2015, TAF’s origins are in the humble start of Teklebrehan Ambaye Construction (TACON), a flagship company of TAF established by a former Addis Abeba University staff in a division responsible for building and construction. TACON had a modest beginning with three employees, including the founder bearing the same name, and 5,000 Br in capital when it was first incorporated in 1993. Today, it has a project portfolio worth 4.5 billion Br, and secured a one-of-a-kind state-financed project, a fertilizer manufacturing plant under construction at Yayu, in Ill Aba Bora zone of the Oromia Regional State.


TACON is one of the frontrunners among local construction firms participating in multibillion Birr bids for the construction of industrial parks the government wants to erect in no less than seven sites across the country. In a joint venture with a Kuwaiti company, its bid to win the Hawassa Industrial Park project was lost to a Chinese competitor. Another bid for a similar project in Dire Dawa, in partnership with a Chinese company, remains undecided by the Ethiopian Industrial Park Development Corporation. In each of these projects, the value of contracts is estimated to reach five billion dollars.


Restructured under a corporate structure last year, TAF Corporate Group is an emerging family business empire with six companies: Edna Hi-Tech (HTS) Plc, Yebel Industrial Plc, Yutaf Aluminium Plc, Edna Mall, Sekota Mining Plc and TACON Plc. TAF’s recent corporate overhaul and its current move in acquiring ERP solutions shows not only that the company’s leaders are “visionaries” but also demonstrates how the Ethiopian private sector is “evolving and growing,” according to people knowledgeable of the company’s growth. “It tells you something when they decided to spend all this money in buying technology instead of machinery,” said a person who works for a consulting firm and advises many of the state-owned and private companies.

The Ambaye sons have a different view of how the world is changing; they aspire to be one of the leading companies in Africa, according to this consultant. Seifu Ambaye, CEO of the Corporate Group and one of the six brothers of the Ambaye family, appeared to concur with this view. “In the current very competitive market place, clients are increasingly demanding better value for money, quality of service and timely delivery that we have to meet, consistently setting far reaching goals for ourselves,” he said.


It will take six months for his Group to fully implement the ERP, a much shorter time than the average two years it takes to get the solution up and running. But the cost of the solution and its implementation period depend on the size of the company. Ethiopian Airlines has close to 8,000 employees, a size four times larger than TACON, thus the cost dropped by almost half of the eight million dollars the airline paid for ERP. Although implementation claims five to one of the total cost, licensing for use of the solution by employees weighs considerably on its cost, according to industry experts.
“The decision to embark on implementing the global leading ERP solution would provide TACON with a reliable tool for enhancing its capabilities and enhancing efforts in the march towards destinations mainly demanded by its wide-ranging internal and external stakeholders,” Siefu said.


For the implementation of ERP to TAF, Fairfax Technologies has partnered with ISYX Technologies, a company based in the United Arab Emirates (UAE). ISYX is hired to do the commissioning and testing of the technology, sending its experts to assist Fairfax.

 

Addis Fortune, March 29, 2016