Bill Gates and Remo Pedon at Acos in Nazreth, Ethiopia (March 2012).
IFT: What kind of positive changes has the Nazreth facility brought to the local community? Remo Pedon: Actually there have been many positive changes. Smallholders have seen their selling price for navy pea raw material grow sevenfold since 2005. The network of suppliers around our Acos Ethiopia operation now provides employment to 15,000 people in the community. Also, after 10 years everybody now has a mobile phone, so that has completely changed their situation and their lives. Taxis, which were once just carts and donkeys, have been replaced by motorized scooter cars. We’ve seen a lot of progress and modernization. IFT: What are some of the cultural differences that have presented challenges during your work in Ethiopia? Remo Pedon: Ethiopia is a land of contrasts, a beautiful land of great agricultural potential, but a closed society. For example they have their own calendar; they are currently living in 2005. They also use a different time system from the rest of the world. For example 6 o’clock in the morning for them is like midnight for us. It’s a completely closed system but they use it. Some people ask me if this is just a tradition, but it’s not. Young people, 20 years old, use this system, so it’s not just for the older people; it’s for everybody. Everything related to beans is based on the price of a bag. So they’re always thinking of the price for one field bag, which is 100 kg. We [in the industry] normally talk about tons, but this can lead to big mistakes. International trading fluctuations are not known in Ethiopia and therefore tend not to impact the Ethiopian market. Despite these different structures and traditions, there can be a way of working with it and adapting to serve the international market, though it’s not always easy.
IFT: What are some of factors that have allowed Acos to flourish in Ethiopia? Remo Pedon: Constant product supply is a key factor. Also the banking system is very forward thinking and helpful. In Europe it is very difficult to obtain credit because of the banking situation. In Ethiopia if you have a very good business plan, as well as a good budget and you export, the bank will give you the amount of money that you need. This is important because in other parts of the world, not only Europe but for example South America, it’s very difficult to access credit from the bank. Here they support our project. IFT: How would you describe the impact of the Ethiopian Commodities Exchange (ECX)? Has it inspired similar efforts in other developing countries in Africa? Remo Pedon: I would say it has been very beneficial. Acos was a founding member and I believe it has steadied the market a lot. It is a good example of what Ethiopians can achieve when they set their minds and political will to it. Within a mere three years they have built a $1.2 billion market. Dr. Eleni Gabre-Madhin, who founded the exchange, has now left ECX to repeat its success in Kenya.
Exclusive Interview: Remo Pedon Featured Topic: Emerging Markets