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A new bottling plant for soft drinks that opened near Hargeisa last week will help boost economic development and reduce massive unemployment in the region, analysts say.

In partnership with Coca-Cola, Somaliland Beverage Industries (SBI) built the plant in Jalelo, 30 kilometres northeast of Hargeisa, Somaliland.

Somaliland President Ahmed Mohamed Silanyo, President of Coca-Cola's Central, East & West Africa (CEWA) Business Unit Nathan Kalumbu, SBI CEO Ahmed Osman Gelleh and other officials attended the official opening ceremony of the production plant on May 22nd.

The two companies invested $15 million dollars in the project, Kalumbu said during the ceremony. The venture is part of Coca-Cola's commitment to invest $12 billion in Africa by 2020, a plan that began in 2010, he said.

Job creation and economic development

The new plant is a move in the right direction and something that will help Somaliland achieve further progress, said Silanyo in his ceremony speech.

"I would like to congratulate Coca-Cola and SBI; they are contributing something we can be proud of. The opening of this plant will help people learn new skills, it will help Somaliland open up to the world [international investments] and create new jobs," he said.

SBI Chief Operations Manager Mustafe Osman Gelleh expressed optimism and confidence that the investment will create jobs for Somalis. He said the plant currently employs 200 people and estimates it will help create and support an additional 6,000 indirect jobs in the retail and distribution sectors.

He said the country lacked skilled workers and the company had to temporarily use foreign skilled workers to start production and help provide training to new plant employees.

"There are not many people who have the skills needed to work in a production plant, that's why we [initially] brought in workers from abroad. Now, we have trained local workers who have taken over some of the work," Mustafe told Sabahi.

The plant, built on nearly 10,000 hectares, will be able to produce 18,000 crates of soft drinks a day, he said. Production is expected to supply the Somaliland, Puntland, Galmudug and some central Somalia markets, he said.

"We would like to thank the people of Somaliland and urge them to work with us and support us so that we encourage local production of goods," said the operations manager of SBI.

Investing in the future

Somaliland Minister for Trade and Tourism Abdirisak Khalif Ahmed said the training programme will create more employment, while imparting job seekers with important skills they can use later.

He said the new bottling plant is not only creating immediate jobs but is also helping attract other foreign investments.

Ahmed said Somaliland investors tend to be attracted by short-term investments with lower risks; however, this project might inspire them to consider long-term investments that can be financially beneficial for both the individual investor and the community.

In addition to helping lower the high unemployment rate in Somaliland, producing beverages domestically will also help retail and hospitality industries record larger profit margins, said Abdirahman Adam Aar, an economics lecturer at the Civil Servant Institute.

Aar told Sabahi that the new plant will help business owners eliminate costs associated with importing beverages from overseas. "They will be relieved of the expenses they used to incur in importing beverages from Yemen and the risk of their loaded ships falling prey to pirates or sinking with their goods," he said.

Abshir Ahmed Mohamoud, a shopkeeper in Hargeisa told Sabahi that he now buys a 24-bottle beverage crate at $6.40, whereas he used to spend $11.50 for an imported crate of beverage. Although the locally produced bottles are smaller, 300 millilitres compared to the 500 produced abroad, Mohamoud said buyers seem satisfied with the product.

The new plant will also help bring in new revenues for the government. Aar says the government will be able to levy taxes on the goods produced and the people employed by the industry.

Encourage investment in Somaliland

Ahmed said the government plans to support foreign investors who are interested in establishing new industries and production sectors.

He said the government waived taxes on the equipment and other raw materials imported by SBI and other taxes on the goods produced until the plant is fully operational.

"From now on, we are ready to continue with the same policy regarding taxation of imported raw materials that are basic to the production of the industry as stated in the Somaliland investors' policy. We also promise to waive taxes on the sale of goods produced by the plant for the first three years until it becomes fully operational and to reduce the taxation of goods by 50% for the following two years," he said.

President Silanyo said his administration will work with investors to continue to develop new industries and help the economy. "As a government, we are ready for anything that will encourage such industries that will benefit our people by creating job opportunities," he said.