Inside Mesfin Metals and Engineering Corp’s Strategic Push for Post-War Competitiveness
One of the major companies operating under the Tigray Endowment Fund for Rehabilitation (EFFORT), Mesfin Metals and Engineering, announced a major rebranding at the end of September 2025, thirty-two years after it was established as a legal entity.
Engaged in the production of industrial and construction materials, energy supply components, metal fabrication, electromechanical engineering, and vehicle assembly, the company is currently led by its Managing Director, Colonel Tessema Gidey.
Tessema earned his undergraduate degree in mechanical engineering technology from the Defense Engineering University, under Addis Ababa University. He later completed a graduate program in business administration at Indira Gandhi National Open University in India, where he also focused on operational management.
Before taking the helm at Mesfin Metals and Engineering in January 2021, Tessema held senior posts at other defense-affiliated enterprises, including former Metals and Engineering Corporation (MetEC) subsidiary Hibret Manufacturing Industry and Gafat Armament Industry. He was promoted to Director-General from his post as head of Production Planning and Control at Mesfin Engineering.
In this interview with The Reporter’s Nardos Yoseph, Tessema reflects on Mesfin’s current operations, its recent rebranding, the company’s status during and after the northern Ethiopia war, structural reforms, EFFORT’s finances, the conditions of the company’s workforce, and its challenges in accessing forex and raw materials, among other issues. EXCERPTS:
The Reporter: Mesfin Metals and Engineering is one of the better-known companies both in Tigray Regional State and across Ethiopia. However, apart from being recognized as one of the enterprises under the Endowment Fund for Rehabilitation of Tigray (EFFORT), little is known about its independent identity. Could you briefly explain Mesfin’s history — from its founding to its current status?
Colonel Tessema Gidey: The name ‘Mesfin’ carries a deeply historic significance. It was named after a brave fighter — an engineer and political figure — who lost his life in a machinery accident during the armed struggle.
The company’s roots go back to the Bereha, to the desert where the TPLF operated during the struggle against the Derg regime. During that time, there was an engineering structure known as Zero-55 or 055, which was part of the fighters’ operations. This structure provided engineering solutions, produced and repaired tools, and supported logistics — everything from agricultural implements to vehicle maintenance. Using the skill, knowledge, and practical ingenuity available at the time, 055 developed solutions critical for the fighters’ survival and mobility.
Mesfin emerged from that wartime engineering effort. After the struggle, in 1991, the leadership recognized that the technical capacity built in the field needed to be preserved and institutionalized. Discussions began on how to transition the engineering knowledge and human capital from 055 into a formal organization.
In 1994, the engineering team was legally registered as Mesfin Industrial Engineering, ensuring that the skills and structures developed in 055 could contribute to regional and national industrialization. From then on, Mesfin became widely known — both for its technical work and its historic legacy — participating in major national engineering projects until around 2020.
By that time, global and local circumstances were changing, and the company needed to reassess the vision and strategy that had guided it since its inception. Given its large human capital — engineers, technicians, and accumulated expertise — Mesfin began exploring new sectors and ways to expand beyond its traditional focus on metal work and machinery, while preserving the innovative and resilient spirit that had defined it since its origins in the struggle.
What new developments took place around 2020?
What was done then was essentially transforming Mesfin from a company focused on a single field into one diversified across multiple sectors, with a restructured corporate framework. The main idea was that the institution must focus its work on addressing public challenges and bottlenecks — that it should evolve into a corporate structure aligned with national needs. When we say the structure was improved, we mean the mission and the scope of work expanded. The goal was for Mesfin to participate more broadly in areas like energy, transportation — both public and private — agricultural machinery, and mining. The concept was that the machinery and machine parts needed to utilize the country’s natural resources should be locally manufactured; the technology should be introduced and developed here; and instead of merely acting as a merchant in one quiet corner of the economy, the company should build the capacity to create capacities — to become a producer of tools and technologies that empower others to operate at higher levels. Because, being an engineering firm, Mesfin’s philosophy was to build its own capacity and contribute to the capacity of others.
For instance, a company like Messebo Cement can generate millions in revenue per hour of operation, but if its production stops even for one hour, the loss is equally huge. Therefore, if Mesfin develops the capacity that ensures Messebo’s continuous operation — or if it uses its own strength to support Messebo — then beyond that, Mesfin can help similar institutions that generate vast amounts of wealth for the country but often lose billions due to minor or major technical problems that halt production for months. The new corporate restructuring aimed to focus on building capacities and producing technologies and machinery that prevent such breakdowns — to avoid waiting for three or six months for foreign suppliers while industries stand still. The new structure was designed so Mesfin could hold broader responsibilities and offer practical solutions across many sectors.
We undertook the restructuring; the war broke out just months later. Since then, there have been enormous challenges. After the war, when we tried to resume operations, what we found were collapsed institutions — many of them destroyed — and we lost a great deal.
Reports indicate that Mesfin’s facilities sustained varying levels of destruction at various stages of the conflict. Were you able to assess the extent of the damage? Have you managed to resume operations in full?
We have a five-year strategic plan in place. It lays out in detail what we aim to accomplish each year and how we will move forward. Essentially, the strategy charts a five-year path to rebuild from the setbacks and disruptions we experienced — to rise above our previous challenges and reposition ourselves as a competitive and leading engineering institution, not only in Ethiopia but also across Africa. It is about restoring both our capacity and our credibility. We are confident that we will reach the operational capacity that allows us to achieve all of this. Of course, what we cannot control — such as another war or an unforeseen national crisis — could again disrupt progress. But barring such circumstances, and provided that the peace we have today remains stable, we believe we will reach our targets. For now, our immediate focus for the first year or two is to ensure the institutional survival of Mesfin — to keep the corporation functioning and prevent closure. That is our first priority. We are concentrating our efforts on stabilizing operations, evaluating performance, and reinforcing continuity. Once that is secured, we will move into the growth phase. Within two to three years, we expect to fully return to our pre-war level of performance. Beyond that, we aim to create new capacities, diversify production lines, expand our market share, and, by the fifth year, become a strong, competitive corporation capable of consistently providing high-quality, sustainable solutions to all kinds of challenges.
Many businesses in Tigray say that war-related issues with debt and accumulated interest have made it extremely difficult for them to resume operations, even after peace. How does Mesfin’s situation compare in that regard?
That is indeed one of our most pressing issues. The damage Mesfin sustained was enormous. The company’s image suffered greatly — and restoring it has been one of our biggest undertakings. Part of the reason is that the corporation had long been presented as one entangled in politics, which made it vulnerable. During the war, Mesfin was openly targeted. Our facilities were attacked with deliberate intent to destroy everything we had built. The damage affected both tangible and intangible assets. In physical terms, we lost machinery, equipment, materials, and cash — assets worth billions of Birr, some looted, some burned, and others completely ruined. But the invisible loss was even greater: the psychological toll. People’s morale, their confidence, their faith in the company’s future — all took a deep blow. Measuring that loss is almost impossible. At present, our biggest operational challenge is the shortage of working capital. Much of what we had was wiped out during the war. To sustain the company and revive production, we need loans, we need assistance, and we need meaningful financial support. Despite these hardships, we are doing everything within our capacity to keep Mesfin afloat — to maintain operations at the minimum viable level. However, so far, we have not been able to access bridge financing or recovery loans. For a corporation of Mesfin’s size, sufficient working capital is absolutely essential. Still, through our own efforts, we continue to operate — and even under such strain, we remain among the country’s largest taxpayers. Last year, Mesfin was one of Ethiopia’s top tax contributors. Mesfin is a development enterprise. As government policy recognizes manufacturing as a strategic sector, it is crucial that post-war recovery programs also prioritize industrial enterprises like ours. Access to credit is vital, especially for companies rebuilding after conflict. To be frank, there is hardly anyone in Ethiopia who does not know Mesfin’s name. Yet even with that legacy, our biggest challenge right now is still financial — the shortage of working capital. So our current focus is on survival: finding ways, through careful planning and internal restructuring, to ensure the company’s continued existence and sustainability.
If you are facing a shortage of working capital and have no access to loans, what alternative mechanisms are you currently using to keep the company running?
The issue of finance affects everything from the ground up — it influences every stage of our operations. Without adequate cash flow, we cannot purchase raw materials. We cannot take advantage of opportunities to import the inputs we need by ourselves. As a result, we hand over the market opportunities we have secured in our own sector to other entities that have cash, allowing them to benefit instead. In return, we work with them to obtain raw materials through partnership or shared production contracts. In some cases, this means giving up our rightful market share or profits just to stay alive — to preserve our existence as an institution. To put it simply, even if Mesfin’s annual sales reach one billion Birr, our actual profit margin would barely reach five to seven percent. The reason is that we purchase most of our inputs through intermediaries. When we collaborate with others, it’s often on credit or through advance payments, or we buy finished products locally from private importers who bring in materials themselves and resell to us. So the inability to directly import essential raw materials has cost us dearly. The loss of that opportunity — the margin we could have gained — is substantial. Now, with such a severe shortage of working capital, we must ask ourselves: how can we make the most of our internal capacity? How can we economize? How do we restructure to adapt? These are the questions we constantly face. We are always reorganizing our structure to adjust to changing conditions. When circumstances demand flexibility, we operate flexibly; when expansion is impossible, we shift to preservation and apply temporary solutions of every kind. For instance, when we talk about cost control — say, vehicle operations — we’ve reduced vehicle use by eighty percent, using only twenty percent of our previous fleet to save on fuel and maintenance. Across all departments, we’ve taken similar cost-cutting measures. Slowly but steadily, these are the steps we’re taking to navigate through this financial crisis.
How would you describe Mesfin’s working relationships with other businesses after the war?
Beyond financial challenges, a big problem is that Mesfin still faces the same kind of post-war stigma—as if we’re not supposed to operate freely in the market, not supposed to enter it, not supposed to sell or buy as we wish. There’s a kind of invisible pressure that limits our operational freedom. That old wartime suspicion still lingers.
Because of that, anyone —whether a foreign or local partner— who wishes to work with Mesfin does so with hesitation and fear. They hold back. There is still a perception that working with Mesfin is somehow dangerous or politically sensitive. Some even go as far as to say, ‘If you work with them, you must be on their side,’ or, ‘there is no guarantee whether or not you won’t align yourself with war again.’
This is something completely outside the institution’s own true intentions or outlook. Yet it becomes our problem when it shapes how others view and engage with us. Mesfin is a company governed by law and corporate procedure.
If there’s any concern, the right thing to do is to ask, verify, and investigate—to understand what exactly is happening, how it’s being managed, and why. That is the fair and lawful way. Above all, this mindset and perception must change.
But this perception is politically charged, and that makes it difficult to change overnight—especially for large institutions like ours. The challenge is greater for us because Mesfin has always been a large industrial operation with significant facilities and a wide range of activities.
When production slows or stops, the company’s market value declines. Everything then becomes a burden the company carries on its own shoulders.
For example, even when our facilities are underutilized, we still pay for electricity, land ownership tax, and maintenance as if we were operating at full capacity. We pay workers, we maintain machines, we cover every expense—but we don’t generate enough income to balance it.
So these pressures are heavy. When we talk about working capital, it’s not even possible to start discussing foreign currency—we are far from that level. These are the real, concrete difficulties we face today.
Still, we must keep looking for solutions—continuously and without interruption. That’s the only way forward. And that’s exactly what we’re doing.
Mesfin’s affiliation with the Endowment Fund for Rehabilitation of Tigray (EFFORT) often raises questions about financial transparency. Is Mesfin’s financial activity conducted in a transparent and lawful manner?
Mesfin operates its own financial system transparently and lawfully. It is true that our financial operations are subject to the EFFORT audit reports, and—like any other institution—we conduct both internal and external audits. Not only Mesfin, but all EFFORT-affiliated companies follow strict legal and procedural frameworks. I can say with confidence that there is not a single instance, even a fraction, where any of these institutions operate outside the law, established procedures, or regulations. The system is very transparent.
As far as Mesfin specifically is concerned, which is my area of responsibility, there can be performance-related challenges that arise during work—just like in any organization anywhere. When such issues occur, accountability follows based on the nature and extent of the problem. Apart from that, our commercial operations are carried out within a highly regulated and lawful system.
However, I concede that it is true that audit reports have been delayed.
Why have they been delayed?
The audit work we are doing now covers a four-year period. During those years, the companies were not operational. We are conducting audits that go back four years, and naturally, that cannot be completed in a single day. At present, most EFFORT companies have completed their 2023 audit and are now working on the 2024 audit, gradually catching up with the current year.
However, carrying out the audit has been very challenging. Many of our documents were lost, looted or destroyed during the war. The systems we had in place for years were either damaged or completely erased. There are many records we simply couldn’t retrieve.
Additionally, these institutions are not limited to Tigray alone. For instance, Mesfin has branches in Addis Ababa as well. All of this is being audited after a period of four to five years of inactivity, which makes the process even more complex.
During that time, while EFFORT and its companies were struggling to recover, administrative control was temporarily handled by other bodies, which created further complications. Therefore, it is not that there is no financial transparency—rather; the challenge lies in the difficulty of recollecting what was lost.
The issue isn’t a lack of understanding, but rather that some of the responsible institutions are unwilling to understand the context. That, I would say, is the main source of the pressure we face.
Can you elaborate on the delays in the completion of the audit reports, especially regarding the institutions most affected?
The factors that delayed the audit reports are mainly related to documentation issues within each company. Essential records needed for the process are often missing. For instance, in the case of Almeda [Textile Factory], there are no documents at all to account for its machinery or assets. Nothing. If you look at Humera Agricultural Mechanization Center in the west, nothing remains there either.
All these are EFFORT-owned companies, and since they are presented collectively under the same umbrella, their audit results are interlinked. This has created difficulties. However, not all are in the same condition—some have been inactive for years and no longer meet audit standards. Others are completely defunct. Yet, on paper, they still exist under EFFORT.
When auditing EFFORT, one company affects another, delaying the entire process. In reality, these are legally independent commercial entities—each with its own business license and legal personality. Those still operational are making serious efforts to finalize their audits.
But under the law, because they are collectively regarded as EFFORT companies, a challenge or debt in one affects the others. Since there are shared ownership stakes between them, even minor cross-holdings can create significant complications and collective burdens in terms of results and accountability. That’s where the bottleneck lies.
Once this issue is properly understood and addressed, it can be easily resolved. But if there’s no willingness for coordination, the problem will persist.
As one of EFFORT’s major subsidiaries, are you saying these challenges are limited to audit-related issues, or do they also extend to financial operations in general?
They’re not limited to audit matters. Let me give you one example from our experience. We once applied for a large loan from a major bank. The process took over a year, as we were repeatedly asked to fulfill requirements—prepare this, bring that, complete this, submit that.
After more than a year of back-and-forth bureaucracy, when we finally submitted asset documentation and valuations, we were shocked to see our factory facilities valued lower than some private workshops. For instance, a factory worth one billion Birr was valued at only one hundred million.
This was beyond our control, but we had to continue working within those constraints. Completing property valuations by itself is highly costly—it can cost between two and three million Birr, depending on the scope.
After all that effort, the final response we received was: ‘Since EFFORT companies are interlinked, and there are unsettled transactions or unpaid debts among them, we cannot approve the loan.’
So, even when we provide collateral assets, this collective treatment of EFFORT companies becomes a permanent obstacle. The refusal is never final, but the problem remains unresolved.
Whether it’s due to a lack of support or a deliberate delay, the outcome is the same. We share both the struggles and the frustrations together. Everyone knows who is performing and who isn’t, but these institutions have no legal alternative route beyond the formal process.
That’s why, although some progress has been made, many of these companies are not yet fully operational—they remain in limbo until a clear decision is reached.
When will the non-functioning companies you mentioned undergo auditing?
Almeda Textile is no longer operational. Sheba Leather Industry is no longer functioning. Same goes for Saba Dimensional Stone. These are among the EFFORT-owned enterprises that are not in operation.
I cannot say exactly why they ceased to operate, as I was not directly involved in their management. The issue may be administrative or otherwise, but to this day, the full picture has not been made clear to me.
However, these companies are still considered to be under EFFORT’s umbrella. Moreover, many of them hold cross-shareholdings with one another—each owning shares in the other.
This interconnection creates a problem: when companies like ours that are still operational submit collateral assets and apply for loans, banks deny the request by citing the non-functioning EFFORT companies that hold shares in us. They say the inactive ones are liabilities, and that becomes an obstacle to accessing finance.
This issue can be solved—either through an administrative remedy or by setting up a temporary or permanent solution. But that depends on the willingness to reach an understanding.
There are cases where, instead of addressing issues straightforwardly and constructively, unnecessary obstacles are created—solutions that look good on paper but have no practical meaning. If there is no genuine intent for resolution, resentment grows and that breeds closure of regional state owned development enterprises.
In short, the perception surrounding these institutions remains highly negative and deeply discouraging. These are, after all, business enterprises; they should be trusted, allowed independence, and properly regulated, not stifled by fear or suspicion. There is a system. There is law. There are governing rules and procedures. Beyond that, everything should be possible through proper oversight.
Apart from that, we must also recognize the capacity of the Tigrayan people—and indeed of the Ethiopian people as a whole. A solution is necessary. Mesfin’s capacity belongs not only to Tigray but to the entire nation.
Therefore, these companies deserve to be viewed through a business lens. If the foundation remains one of mistrust or if their names are stigmatized, everything associated with them collapses under that burden. This isn’t unique to Mesfin or EFFORT—it’s a pattern seen across many institutions and even at the individual level. The impact of such prejudice is very harmful.
That’s why this is such a delicate task. What we need is to measure, assess, and operate as a business institution. Beyond that, as the head of a business enterprise, I have no political or hidden agenda in what I’m saying.
As long as I am here, it is expected of us to operate within business systems, laws, and regulations. Likewise, it is expected of the relevant authorities who have the mandate to oversee us to manage this process legally and responsibly.
Even while this audit is being conducted, what is required of us as a company is to continue contributing to the country and its people in a lawful and accountable manner.
The sector in which Mesfin operates is one of the most labor-intensive areas of the economy, employing a large number of workers. How many employees did you have before and after the war?
Mesfin still employs a significant number of people. At present, we have over 1,500 permanent employees on the payroll. Even though we are operating under great difficulty and while for many institutions the ‘solution’ would be cutting staff, downsizing, or scaling back operations, we see things differently. If we let these workers go, where would they go? The answer to that question is what guides our decisions. The truth is, there’s nowhere else for them to go. As a company, we are now in a chapter focused on sustaining our institutional survival—that’s why we’ve chosen this path.
We are doing everything we can to retain as many of our employees as possible, within our capacity. Many of them, however, are still earning the same amount of salaries to what they were making seven or eight years ago. Obviously, that income is no longer sufficient to sustain a living. Right now, our workers are underpaid, with little to no benefits. Frankly, they are serving the company almost voluntarily.
But from an institutional standpoint, our only way forward is to endure—to stay alive as an organization and evolve through the hardship. There’s simply no other solution. Even when we say we’re ‘moving forward with a small force,’ in reality, Mesfin can’t even move effectively with that small capacity. Without our workers, what could we possibly do with all this machinery and infrastructure? Without manpower, machines become idle assets—wealth that sits uselessly. That’s why maintaining our workforce remains our top priority.
Of course, some employees, as the cost of living keeps rising, are seeking other opportunities—not because they want to leave, but because their circumstances force them to. We feel sad about it, but we wish them well. And when the situation improves, we will always welcome them back as part of our family.
At the same time, there are many who choose to stay with us through all this hardship. They see this company as belonging to the people of Tigray. For them, working here is an act of service—to stand together, to fall and rise again with the institution, as part of Tigray’s struggle. They say, ‘This is the property of the Tigrayan people; by working here, I’m helping sustain my community’s livelihood.’ That’s the kind of belief and commitment that keeps many of our workers going.
Every day, we move forward with the hope that tomorrow will be better than today. We’re not a purely profit-driven enterprise that operates on commercial logic alone. We’re a company with deep social responsibility. When we think of our employees, we’re thinking of the people of Tigray.
Each of those one thousand five hundred workers supports a family. How many households is that? How many lives depend on them? Cutting one worker means destroying the livelihood of an entire family. It’s a matter of principle and survival balance—we must not create a second crisis by destroying our human capacity in the name of solving the first one.
That’s why we say: we’re doing fine, nothing catastrophic has happened. We’re surviving.
