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Selam Bus Line S.C. bought 15 Scania tourist buses
from Brazil for 23 million Br. The buses will arrive
in Addis Abeba in six weeks, Berhanu Kebede, general
manager of the company, told Fortune.
The 13-year-old service provider opened a letter of
credit with Wegagen Bank S.C on October 31, 2007 for
the buses it procured from the Brazilian
manufacturer, sources at the Bank told Fortune.
Selam was established in February 1995 with the
Tigray Development Association (TDA) as the major
shareholder. Its minority shareholders include the
Associations’ former president, the late Araya
Zerihun, Bekele Berhane, Gebremichael Paulos and
Tadesse Tefera. TDA possesses 99.6pc of the total
shares of the company that has one million Br in
capital.
The company began operations with 14 60-seat buses
and five 46-seat tourist buses. In a bid to increase
its market share in October 2006, the company sold
6,000 shares with a par value of 5,000 Br through
Wegagen Bank and its main office based in Mekelle,
Tigray Regional State. The shares worth six million
Birr were sold to 700 new shareholders. Selam bought
the buses using this money and a loan obtained from
Wegagen Bank.
Public transport is regulated by the Federal
Transport Authority (FTA). Though prices and service
routes are fixed by the Authority, Selam’s five
tourist buses have been charging their customers
double the tariff. These buses generate 30 million
Br in revenue annually.
Currently, there are 1,200 buses, organized in 15
associations, delivering cross-country services.
Businessmen at Selam contend that there is room for
expansion and improved profitability.
“Within five years (2007-2012), the company has
plans to boost revenue by 46pc, increasing the
number of buses to 75,” reads a booklet issued by
the company.
Following the arrival of the new buses, there would
be another share offer, Berhanu told Fortune.
The buses bought from Scania will provide transport
services in regional towns that have asphalt roads
and offer passengers refreshments.
Scania is one of the world’s leading manufacturers
of trucks and buses for heavy transport and of
industrial and marine engines. With 22,000
employees, and production facilities in Europe and
Latin America, Scania is one of the industry’s most
profitable manufacturers.
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