|By William Davison
Posted to the web on October 8, 2011
October 6, 2011 (ADDIS ABABA) - Karuturi Global Ltd., the Indian food
processor that earns most of its revenue abroad, said it will
replant its corn crop in Ethiopia after a flood destroyed its
first planned harvest in the country.
The damage was caused by flooding on the Baro and Alwero
rivers in the western Gambella region, Sai Ramakrishna Karuturi,
managing director of the Bangalore-based company, said in
interview on Oct. 4 in Addis Ababa. A potential harvest of
60,000 metric tons of corn was lost after 12,000 hectares
(29,653 acres) of land was flooded, he said.
“The waters started rising last Wednesday and have not
stopped until Sunday,” he said. “Most of our maize is lost. We
have taken a bit of a hit there.” The company said in a
statement on Oct. 3 the loss was estimated at $15 million.
Karuturi, the world’s largest rose grower, in 2009 leased
100,000 hectares from Ethiopia’s government to grow sugar cane,
palm oil, cereals and vegetables. The company may receive an
additional 200,000 hectares if the government is satisfied with
the first phase of the project, according to the Agriculture
The project is “ahead of expectations” and will be
completed by December 2013, and the government is “extremely
satisfied” with progress, Karuturi said.
Ethiopia plans to transfer 3.3 million hectares of land to
investors during a 5-year growth plan announced last year. About
350,000 hectares has been leased since Sept. 2009, according to
the Agriculture Ministry’s website. The Oakland Institute, a
U.S.-based research group, said in a report earlier this year
that 3.6 million hectares has been rented by investors since
The flooding that breached specially built barriers near
Karuturi’s plantations couldn’t have been predicted, Karuturi
said. “This kind of flooding we haven’t seen before,” he said.
“This is a crazy amount of water.”
A second crop of as much as 15,000 hectares of corn will be
planted when the waters recede and will be harvested around
March, Karuturi said. A 200-hectare sugar cane nursery started
by the company is expected to expand to 10,000 hectares before
being sold in 2013, while 500,000 plants of palm oil will be
ready after two years, he said.
To minimize transport costs, produce from Karuturi’s
Gambella operations will be exported to South Sudan and other
East African markets, rather than farther afield, Karuturi said.
Crops will be paid for in dollars, bringing foreign exchange to
the National Bank of Ethiopia, he said.
Two tug boats with the capacity to carry 600 tons each and
which will transport crops along the Baro River that flows into
South Sudan are expected to be operational within 18 months,
Karuturi said. The company is forming partnerships with foreign
companies to build rice and sugar processors on the farm, he
Karmjeet Sekhon, project manager for Indian food company Karuturi Global, with crops in Ethiopia's Gambella province. Photograph: John Vidal for the Guardian