Finding the nerves of steel in Ethiopia

The company provides free meals and subsidizes transport. However, unlike in China, where many workers are happy to work weekends if it means being paid penalty rates, enthusiasm for extra work is largely absent, Qian says.

He describes it as a reflection of Ethiopia's "high happiness index", people opting to spend more time with families and friends ahead of making money.

Miao Wenwei, deputy general manager of East Steel, says the tough challenges facing the domestic iron and steel industry in China mean he will continue to work in Ethiopia for a while yet.

Miao, originally from Changshu Steel Rolling Co Ltd in Jiangsu province, came to Ethiopia two years ago. The quality of rebar that East Steel makes is very good, he says.

While Miao expresses his concern over the relatively low productivity, Qian says East Steel has tried to recruit more quality local staff with the help of Ethiopia's steel industry associations.

"Still, hiring the local workforce has not been at the expense of quality because skilled technical workers from China ensure that. We can't afford to play with our reputation when our products are used in key projects such as railways."

East Steel had been importing most steel ingots from Ukraine since production began late last year, but civil conflict there over the past few months has exacted a heavy toll. Disruption to rail traffic in Ukraine means steel ingots East Steel ordered may not arrive for a long time, and the company has now turned to Oman for supplies.

Qian, who assumed his current post in February, worked in the trade mission of the Chinese embassy in Ethiopia from 2003 to 2007. Before joining East Steel he had worked for the Eastern Industry Zone administrative committee from 2008. The Eastern Industry Zone is the first industrial zone in the second-most populous country in Africa.

Qiyuan Group, the major investor in the industrial zone, is also a shareholder of East Steel, whose largest investor is Huajingyuan Group.

Ethiopia is learning from the Chinese model, Qian says. "The two countries have similar situations," he says, citing Ethiopia's double-digit growth for more than a decade.

To Qian, Ethiopia's relatively above-board and stable government, open policy and friendliness to China are great attractions compared with some other African countries. But the country still depends on neighboring Djibouti for port facilities, and raw materials such as coal and petroleum still need to be imported.

AT A GLANCE

EAST STEEL PLC

Year established in Ethiopia: 2012

Location in Africa: Dukem, about 37 km from Addis Ababa

Business in Africa: Making steel products

Annual capacity: 300,000 tons

Employees: 500, including about 50 from China

Major investors: Huajingyuan Group, Qiyuan Group