Published on 24 Apr 2025

Construction boom fuels demand for Korean excavators in Ethiopia

Ethiopia now accounts for a third of Hyundai construction equipment sales in Africa

Photo source: Hyundai Construction Equipment

Rising mining activity and infrastructure projects are driving demand for construction equipment in Ethiopia, Africa’s second-most populous country with over 130m people. Significant surge in its construction and mining sectors, are positioning the country as a focal point for investors seeking opportunities in East Africa.

The construction industry has become a cornerstone of Ethiopia's economy, contributing 21% to the nation's GDP as of 2024 and is projected to expand at an annual rate of more than 8%. This growth is driven by substantial investments in infrastructure projects, including roads, railways, airports and its capital development project.

South Korea’s HD Hyundai Infracore, a manufacturer of construction machinery, says Ethiopia now accounts for a third of its total sales in Africa. The company recently secured an order from two Ethiopian mine development companies to supply 100 36-tonne excavators – its most popular model in the country, with 212 units sold there in 2024 alone. The company expects demand to remain robust, citing continued investment in mining and infrastructure. One of the country’s most ambitious infrastructure projects is the US$7.8bn Abusera International Airport, situated 40 km outside the capital, Addis Ababa. The new four-runway hub is designed to eventually handle 110m passengers per year and provide parking for 270 aircraft. The first phase – capable of handling 60m passengers annually – is due to be operational in 2029. The new airport is intended to complement the existing Bole International Airport, which is nearing its 25m passenger capacity.

Parallel to the construction boom, Ethiopia's mining sector is undergoing transformative reforms to attract foreign investment. The country boasts significant untapped mineral resources, including gold, tantalum, lithium, and potash. Recent policy changes aim to streamline mining regulations and enhance transparency, making the sector more appealing to international investors.

Notably, gold mining alone generated over US$2.1bn in foreign exchange during the first nine months of the 2024/25 fiscal year. Scandinavian miner Akobo Minerals recently began production at its Segele gold mine in the southwest, while other developments include the Tulu Kapi venture by London-listed KEFI Gold and Copper, and Canada-based Allied Gold’s Kurmuk project, which is expected to come on stream in 2026. However, insecurity in parts of the country remains a key challenge for the mining industry, disrupting operations and deterring foreign investment.

HD Hyundai Infracore saw sales of its excavators and medium- to large-sized wheel loaders in Africa rise by 34.8%, from 13,500 units in 2023 to 18,200 in 2024. Despite this growth, the company faces stiff competition from Japanese and Chinese manufacturers. It is now targeting neighbouring markets around Ethiopia and working to raise its brand profile across the continent.

References

‘Construction sector boosts Ethiopia’s GDP to 21%’, Housing TV Africa, 02 June 2024

‘Akobo Minerals opens Ethiopia’s Segele gold mine’, Mining.com, 20 November 2024

‘Ethiopia awards contract to construct the biggest airport in Africa’, NTU-SBF Centre for African Studies, 23 August 2024

‘Ethiopia unleashing its untapped mineral wealth to support development’, The Ethiopian Herald, 27 November 2024

‘Tulu Kapi’s impact on Ethiopia’s mining future’, Capital, 23 December 2024

‘Ethiopian Airlines Group and African Development Bank sign letter of intent for financing of world-class Abusera International Airport’, African Development Bank, 24 March 2025

‘HD Hyundai Infracore wins major order for 100 large excavators in Ethiopia’, HD Hyundai Infracore, 25 March 2025

‘Ethiopia’s macroeconomic reforms boost mining investment, productivity – Minister’, Fana Broadcasting Corporate, 02 April 2025

‘Over $2.1 billion in foreign currency earned from gold mining – Ministry’, Fana Broadcasting Corporate, 16 April 2025

‘Ethiopia population’, Worldometer, Accessed 21 April 2025

‘Kurmuk project’, Allied Gold, Accessed 21 April 2025