Ethiopia, located in the Horn of Africa, boasts a unique blend of social, historical, and geographical wonders. Beyond its widely appreciated heritage and stunning landscape, the country’s economic transformation is a captivating story. Within this transformation, growing manufacturing businesses in Ethiopia are gaining substantial ground, propelling Ethiopia toward becoming Africa’s industrial hub. This article explores some of the fastest-growing manufacturing industries in Ethiopia that are shaping the future of the country’s economy.
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Fabric and Apparel Production
Recognized as one of the top priority industries by the Ethiopian government, the textile and fashion industry is thriving rapidly. With the objective of changing Ethiopia into a worldwide manufacturing center, global capitalists are seeking to tap into the large labor force and also the bountiful resources, such as cotton.
Firms like Ayka Addis, the Turkish fabric giant, as well as H&M’s companion, DBL Group from Bangladesh, are building massive factories employing 10s of countless individuals. The Ethiopian government’s commitment to sustaining the fabric market is leading to the construction of industrial parks, such as the Hawassa Industrial Park, which has attracted international focus for its environmental and also socially sustainable model.
Natural Leather and Leather Products
Ethiopia has among the largest animal populations in Africa, supplying a stable source of basic materials for the natural leather sector. The nation’s long-standing custom of tanning as well as crafting leather goods has caught the attention of global organizations. Significant worldwide brands like Pittards and also Chinese footwear manufacturer Huajian have set up production facilities in the nation, taking advantage of Ethiopia’s basic materials and artisanal craftsmanship.
The country is experiencing development in the manufacturing of shoes, bags, gloves, and various other leather products, with a boosted concentration on including value domestically instead of exporting raw hides and skins.
Food and Beverage Processing
As the second-most heavily populated country in Africa, the need for processed food and also beverages in Ethiopia is increasing with the growing middle class. Combined with the federal government’s press in the direction of industrialization, food and also drink processing markets are taking pleasure in significant growth.
Notable gamers in this field consist of East African Tiger Brands Industries, a joint venture with the South African packaged products business Tiger Brands, and BGI Ethiopia, the neighborhood subsidiary of the French beverage company, Groupe Castel. They are contributing to the growth of industries such as dairy, edible oils, meat processing, and liquors.
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Cement Market
The building boom in Ethiopia is sustained by public infrastructure projects as well as exclusive financial investments, and has actually driven the demand for concrete overpriced rate. In reaction, the cement market has actually seen an explosion of growth. Companies such as Dangote Cement, owned by Africa’s richest man, Aliko Dangote, and also regional large Derba MIDROC Cement, owned by Ethiopian tycoon Mohammed Hussein Al Amoudi, are increasing their production capacities.
The appointment of brand-new concrete plants has actually dramatically raised Ethiopia’s cement manufacturing ability, making it one of Africa’s largest cement manufacturers.
Pharmaceuticals Manufacturing
With a large population and a booming demand for far better medical care services, Ethiopia’s pharmaceuticals field presents enormous development capacity. Currently, the nation depends upon imports for concerning 85% of its pharmaceutical needs, a circumstance that the government intends to change.
According to this, Julphar Pharmaceuticals, in a joint endeavor with Medtech Ethiopia, opened up a factory in 2016, with others like the UK’s GlaxoSmithKline revealing interest. The development of the drugs producing market will not just satisfy the local need but likewise provide for exports to neighboring nations.
Agro-Processing
Given Ethiopia’s agrarian economy, with agriculture employing nearly 70% of the workforce, the agro-processing industry is a natural fit. This sector transforms agricultural products into value-added commodities, creating economic diversification and boosting farmers’ incomes.
Agro-processing companies such as Ethiopian Pulses, Oilseeds, and Spices Processors-Exporters Association (EPOSPEA), Sheba Foods, and Agro Prom International are making significant strides. They focus on processing various products, including coffee, tea, oilseeds, pulses, spices, dairy products, fruits, and vegetables.
Ethiopia, being the birthplace of coffee, offers substantial opportunities for coffee processing businesses. Companies such as Tomoca Coffee and Garden of Coffee are expanding their operations, providing specialty, artisan-roasted Ethiopian coffee to the world market.
Steel and Metal Industry
With the construction and infrastructure boom, the demand for steel and metal products is skyrocketing. The steel and metal industry is expanding rapidly to provide necessary materials for the construction of buildings, roads, bridges, and railways.
Major industry players like East Steel Plc, a Chinese-Ethiopian joint venture, and C & E Brothers’ Steel Factory are producing various steel products, contributing to the country’s industrial development.
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Industrial Park Development
Recognizing the importance of sustainable industrial development, the Ethiopian government has embarked on the establishment of several industrial parks across the country. These parks offer attractive investment incentives, including ready-made factories and access to infrastructure.
Industrial Parks Development Corporation (IPDC) is the state-owned enterprise leading this initiative. Hawassa Industrial Park and Bole Lemi Industrial Park are prime examples of successful park projects, hosting global and local businesses, fostering knowledge transfer, and promoting exports.
Glass Manufacturing
The glass manufacturing sector is a rising star in Ethiopia’s industrial landscape. The construction boom, coupled with an increased demand for glass packaging in the beverage industry, has fueled its growth.
Companies such as the Ethiopian Glass Factory and Juniper Glass Industries are seizing the opportunity by expanding their operations. They are producing various glass products, including glass bottles for the burgeoning beverage industry and flat glass for the construction sector.
Plastics and Chemicals
The plastics and chemicals industry in Ethiopia is blossoming in response to the demand from various sectors, including construction, agriculture, and healthcare. Chemicals are needed for manufacturing a wide range of products, from soaps and detergents to pharmaceuticals.
Mugher Cement Factory, for instance, has diversified into the production of chemicals such as Caustic Soda. Equally, the plastic industry is growing, with companies like Ethiopian Plastic Share Company producing various products, including pipes, fittings, and other plastic materials used in the construction industry.
Renewable Energy Equipment Manufacturing
With Ethiopia’s vast renewable energy resources, particularly hydro, wind, and solar, the country has significant potential to become a powerhouse of renewable energy in Africa. This promise has led to the growth of manufacturing businesses focusing on renewable energy equipment.
Companies like Metals and Engineering Corporation (METEC) are producing hydro turbines for the country’s grand hydroelectric projects. Moreover, international collaborations are also happening, such as the partnership between the Ethiopian government and Chinese solar equipment manufacturers to establish solar equipment production facilities.
ICT Manufacturing and Assembly
As digital technology continues to revolutionize the world, Ethiopia is also taking strides in the ICT sector. In an attempt to bridge the digital divide and meet the growing demand for ICT products, businesses involved in the assembly and manufacturing of computer hardware and mobile devices are flourishing.
Renowned companies like Techno Mobile have set up assembly plants in Ethiopia, producing smartphones tailored for the local market. Similarly, local firms like Information Technology Transfer Services are assembling and supplying computers and related equipment to the market.
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Paper and Pulp Industry
The paper and pulp industry is another fast-growing sector in Ethiopia. The rising demand for paper for packaging, printing, and hygiene products has driven the expansion of this industry.
Notable companies in this sector include the Ethiopian Pulp and Paper Share Company and Tana Pulp & Paper Share Company. These companies are engaged in the production of various paper products, contributing to the reduction of the country’s reliance on paper imports.
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Furniture Manufacturing
With the growth of the construction sector and the expanding middle class, the demand for quality furniture has increased significantly. Consequently, the furniture manufacturing industry in Ethiopia is witnessing steady growth.
Leading manufacturers such as Flintstone Engineering and MOENCO are producing a wide range of furniture products, both for domestic use and office purposes. Small and medium-sized enterprises (SMEs) also form the backbone of this sector, showcasing their expertise in creating unique pieces from locally sourced materials.
Automotive and Auto-Parts Manufacturing
The automotive and auto-parts manufacturing sector in Ethiopia is growing, fueled by the rising demand for vehicles and the government’s strategy to substitute imports with local production.
Global auto manufacturers, including Hyundai and Volkswagen, have started assembling vehicles in Ethiopia. Simultaneously, businesses like Belayab Motors and Mesfin Industrial Engineering are manufacturing various auto-parts locally. This move not only enhances the local skill base but also encourages the development of an ecosystem for the automobile industry.
Challenges and Opportunities
In essence, the manufacturing landscape in Ethiopia is a blend of traditional and emerging sectors, each contributing to the country’s economic growth and industrial development in its own unique way. As Ethiopia continues on its path towards becoming an industrialized nation, the importance of the manufacturing sector cannot be overstated. These businesses form the foundation of Ethiopia’s industrialization efforts, creating jobs, generating income, and facilitating technological transfer.
However, while the momentum is promising, these sectors also face numerous challenges. Ethiopia’s manufacturing businesses grapple with issues like inadequate infrastructure, shortage of skilled labor, limited technological capacity, and cumbersome bureaucratic processes. Addressing these challenges is paramount for sustaining the growth momentum and achieving the desired industrial transformation.
The Role of Government, Private Sector, and International Partners
The government’s role is crucial in creating a conducive environment for these businesses to thrive. This involves investing in infrastructure development, improving the quality of education and vocational training, streamlining administrative processes, and fostering a culture of innovation and entrepreneurship.
The private sector also has a significant part to play. By investing in technology, capacity building, and research & development, businesses can enhance their productivity and competitiveness. They can also contribute to the local economy by creating jobs, fostering skill development, and encouraging linkages with small and medium-sized enterprises (SMEs).
Equally important is the role of international partners. Foreign investors bring in capital, technology, and expertise that can catalyze the growth of Ethiopia’s manufacturing sector. Their involvement not only boosts specific businesses but also contributes to the overall development of the industry.
Looking Ahead: Opportunities and Strategies
Looking ahead, Ethiopia’s manufacturing sector presents a myriad of opportunities. The country’s large and youthful population provides a sizable domestic market and a dynamic labor force. Its strategic location near key international trade routes, including the Red Sea and the Indian Ocean, makes it an attractive investment destination.
Moreover, Ethiopia’s rich resource base provides ample raw materials for various manufacturing industries. From agricultural products for agro-processing industries to minerals and metals for heavy industries, the country’s natural resources present a significant advantage.
However, capitalizing on these opportunities requires concerted efforts from all stakeholders. It necessitates a long-term vision, strategic planning, and effective execution. It calls for building robust institutions, fostering a culture of entrepreneurship, and investing in people.
Emerging Manufacturing Sectors
Electric Vehicle Manufacturing
As the world shifts towards cleaner and sustainable modes of transportation, the electric vehicle market presents an exciting opportunity for Ethiopia. Already, Marathon Motors Engineering, a joint venture between Hyundai and the great Ethiopian long-distance runner Haile Gebrselassie, has launched the assembly of Hyundai’s all-electric model in Ethiopia.
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Biotechnology and Pharmaceuticals
Ethiopia’s rich biodiversity provides an excellent foundation for the growth of the biotechnology industry. This sector has the potential to revolutionize agriculture, healthcare, and environmental conservation in the country. In the pharmaceuticals arena, local companies such as Addis Pharmaceutical Factory are striving to increase the production of essential drugs and reduce the country’s dependence on imports.
Advanced Materials Manufacturing
With its abundant mineral resources, Ethiopia has the potential to develop an advanced materials manufacturing sector. This includes producing materials for high-tech industries, such as semiconductors, nanomaterials, and biomaterials. The development of this sector could enable Ethiopia to participate in the global high-tech industry and attract foreign investment.
Recycling and Waste Management
The growth of the urban population and industrial activities in Ethiopia have led to an increase in waste generation. This presents an opportunity for businesses in the recycling and waste management sector. Companies like Penda Paper Recycling are leading the way by transforming waste paper into useful products, thus promoting a circular economy.
3D Printing
The advent of 3D printing technology has the potential to revolutionize manufacturing in Ethiopia. It can speed up the production process, reduce costs, and enable the creation of complex designs. This technology can be applied in various sectors, including healthcare, construction, and automotive. While still in its infancy, the 3D printing industry holds immense growth potential.
With these emerging sectors, Ethiopia’s manufacturing landscape continues to diversify and evolve. These new sectors not only add depth to the manufacturing industry but also signify Ethiopia’s determination to stay abreast with global trends and technologies.
Key Strategies for Sustained Growth
As we look towards the future, it’s also important to discuss the key strategies that Ethiopia’s manufacturing sector needs to adopt to sustain its growth and realize its potential.
Firstly, the focus on skills development and capacity building cannot be overemphasized. The manufacturing sector requires a skilled workforce that is capable of handling complex tasks and adopting new technologies. Investing in technical and vocational education, as well as continuous training for existing workers, is crucial.
Secondly, businesses must embrace technology and innovation. The digital revolution has transformed the manufacturing process worldwide, making it more efficient, flexible, and accurate. Ethiopian manufacturers should leverage technologies like automation, artificial intelligence, and data analytics to enhance their productivity and competitiveness.
Thirdly, the development of strong supply chains is key to the success of the manufacturing sector. This involves supporting ancillary industries, promoting local sourcing of raw materials, and improving logistics and infrastructure.
Lastly, the role of research and development (R&D) in driving manufacturing growth cannot be understated. R&D helps businesses to innovate, improve their products, and stay competitive. Creating a robust R&D ecosystem – including research institutions, innovation hubs, and collaborative networks – should be a priority for Ethiopia.
Potential Strategies for Enhancement
Become a shining testament to Ethiopia’s transformation and growth. As we move forward, let’s delve deeper into the potential strategies that could further enhance the manufacturing sector and stimulate the country’s overall development.
Strengthening Public-Private Partnerships
Public-private partnerships (PPPs) have been instrumental in propelling Ethiopia’s manufacturing sector. The government’s proactive role in establishing industrial parks and creating favorable policies has attracted significant private sector investments. To sustain this momentum, a continued focus on fostering PPPs is critical.
For instance, the government can partner with private firms to invest in infrastructure projects, technological advancements, and skill development programs. Additionally, PPPs could also play a vital role in attracting foreign direct investment, which brings capital, technology, and managerial expertise to the country.
Focus on Market-Oriented Policies
While Ethiopia has made significant strides in opening up its economy, there is still room for improvement. The country can benefit from market-oriented policies that boost competition, stimulate innovation, and promote economic efficiency. These include policies that promote trade liberalization, ease regulatory constraints, and facilitate business operations.
Additionally, focusing on policies that attract foreign investment into sectors where Ethiopia has a comparative advantage, such as textiles and garments, leather products, and agro-processing, can spur growth in these sectors.
Enhancing Regional Integration
Ethiopia’s strategic location in the Horn of Africa presents a significant opportunity for the country to enhance its regional integration. Through regional economic communities like the East African Community (EAC) and the Common Market for Eastern and Southern Africa (COMESA), Ethiopia can access a larger market, attract investment, and stimulate its manufacturing sector.
Moreover, the African Continental Free Trade Area (AfCFTA), which aims to create a single continental market for goods and services, provides a unique platform for Ethiopia’s manufacturers to access a market of over 1.3 billion people across Africa.
Harnessing the Digital Economy
The digital economy holds enormous potential for the manufacturing sector. Digital technologies can improve efficiency, reduce costs, enhance product quality, and foster innovation in manufacturing. By adopting technologies such as artificial intelligence, Internet of Things, and Big Data, Ethiopian manufacturers can revolutionize their operations and become more competitive.
Furthermore, the digital economy can also open up new business opportunities. E-commerce, for instance, can enable manufacturers to reach a wider market, both locally and internationally.
Prioritizing Sustainable Development
As Ethiopia aspires to become an industrialized nation, it must also prioritize sustainable development. The manufacturing sector should strive to minimize its environmental impact by adopting clean and efficient production processes, managing waste effectively, and using resources sustainably.
Incentives can be provided to businesses that adhere to environmental standards and implement green technologies. Additionally, promoting the concept of circular economy – where waste is minimized and resources are reused – can lead to a more sustainable manufacturing sector.
Conclusion: A Beacon of Progress
In summary, the fastest-growing manufacturing businesses in Ethiopia serve as a beacon of the country’s progress towards industrialization and economic development. They signify a nation that is ready to break away from its agrarian past and move towards a future defined by industrial dynamism and innovation.
However, Ethiopia’s journey towards becoming a manufacturing powerhouse is far from over. The road ahead is filled with challenges that require creative solutions, strategic planning, and collaboration among all stakeholders.
In this journey, every step counts – every factory built, every job created, and every product made. Each of these steps brings Ethiopia closer to its vision of becoming an industrialized nation. As the manufacturing sector continues to expand and evolve, it holds the promise of a brighter and more prosperous future for the people of Ethiopia. The story of Ethiopia’s manufacturing sector is indeed a story of transformation, resilience, and hope.
Transformative Strategies for Growth
As Ethiopia marches forward on its journey of industrial growth, the country stands at an exciting crossroads. On one hand, it carries the rich legacy of an agrarian economy rooted in centuries-old practices. On the other hand, it boldly embraces the promise of a burgeoning manufacturing sector powered by innovation and technological advancement.
Let’s discuss in further detail the transformative strategies that can potentially catalyze the growth of Ethiopia’s manufacturing sector:
Increasing Investment in Research & Development
To bolster innovation and improve competitiveness in the global marketplace, investment in research and development (R&D) should be a strategic priority. This could involve creating innovation clusters, technology parks, and incubation centers. Collaboration among universities, research institutions, and industries should be fostered to drive knowledge transfer and commercialization of innovations.
Nurturing an Entrepreneurial Ecosystem
Creating a thriving entrepreneurial culture is essential for stimulating innovation and job creation in the manufacturing sector. This can be achieved by providing entrepreneurial education, facilitating access to finance, offering mentoring and networking opportunities, and creating a supportive regulatory environment for startups.
Improving Quality Standards
To compete globally and meet the increasing demands of discerning consumers, Ethiopian manufacturers need to focus on improving product quality. This involves adhering to international quality standards, implementing quality management systems, and providing quality assurance training to employees.
Leveraging Diaspora Networks
Ethiopia has a large diaspora community, which can play a crucial role in promoting the country’s manufacturing sector. They can invest in manufacturing businesses, transfer knowledge and skills, facilitate access to foreign markets, and contribute to technological advancement.
Strengthening Institutional Capabilities
Strong institutions are the backbone of a thriving manufacturing sector. This involves enhancing the capacity of government agencies, industry associations, and training institutions that support the manufacturing sector. They should be equipped with the necessary resources, knowledge, and skills to provide effective support to businesses.
The Importance of Inclusive and Sustainable Development
Looking beyond these strategies, it’s crucial to remember that the path to industrialization is a journey that takes time and requires patience, persistence, and perseverance. The experiences of the fastest-growing manufacturing businesses in Ethiopia should serve as an inspiration for the entire sector. Their success stories show that with the right strategies, strong determination, and a supportive environment, Ethiopian manufacturers can overcome challenges and achieve remarkable growth.
As we reflect on the progress made and envision the possibilities ahead, it’s important to remember that the ultimate goal of industrialization is not just economic growth, but inclusive and sustainable development. This means ensuring that the benefits of industrial growth are equitably distributed, opportunities are accessible to all, and the environment is protected for future generations.
Key Areas to Propel Growth
As Ethiopia looks ahead, several key areas of focus will further propel the growth of its manufacturing sector:
Developing a Skilled Workforce
The availability of a skilled workforce is crucial for the competitiveness and productivity of the manufacturing sector. Ethiopia must invest in education and vocational training to equip its people with the necessary skills.
This involves strengthening technical and vocational education and training (TVET) systems, promoting science, technology, engineering, and mathematics (STEM) education, and providing continuous training for workers.
Promoting Gender Equality
Women play a vital role in Ethiopia’s manufacturing sector. However, they often face barriers that limit their participation and advancement. Efforts should be made to promote gender equality in the manufacturing sector. This involves addressing gender-based discrimination, promoting women’s entrepreneurship, and encouraging women to pursue careers in manufacturing.
Embracing Industry 4.0
The fourth industrial revolution, also known as Industry 4.0, is reshaping manufacturing worldwide. It involves the use of digital technologies, such as artificial intelligence, robotics, and the Internet of Things, to transform manufacturing processes. By embracing Industry 4.0, Ethiopian manufacturers can improve their efficiency, flexibility, and competitiveness.
Enhancing Productivity
Improving productivity is key to the growth and profitability of manufacturing businesses. This involves adopting modern production techniques, investing in technology, and improving management practices. Additionally, productivity can be enhanced by improving working conditions, incentivizing performance, and fostering a culture of continuous improvement.
Building Resilient Supply Chains
The COVID-19 pandemic has highlighted the importance of resilient supply chains. Ethiopian manufacturers need to ensure that their supply chains are flexible and resilient to shocks. This involves diversifying supply sources, improving logistics, and leveraging technology to enhance supply chain visibility.
Encouraging Innovation
Innovation is the engine of growth in the manufacturing sector. Ethiopian manufacturers should foster a culture of innovation, invest in research and development, and leverage technology to create new products and improve existing ones. Collaboration among businesses, academia, and government can play a pivotal role in driving innovation.
Fostering a Culture of Excellence
In a globalized world, it’s not enough just to manufacture products; these products must also meet international standards of quality and excellence. Ethiopian manufacturers can achieve this by embracing a culture of excellence, which involves striving for quality in all aspects of their operations, from product design and manufacturing to customer service and after-sales support.
Leveraging Global Value Chains
Global value chains (GVCs) offer tremendous opportunities for Ethiopian manufacturers to access international markets, learn from global best practices, and upgrade their technological capabilities. By integrating into GVCs, Ethiopian manufacturers can not only sell their products worldwide but also become part of a global production network.
Investing in Sustainable Infrastructure
Infrastructure is the lifeblood of the manufacturing sector. Without reliable electricity, efficient transportation, and robust logistics, the manufacturing sector cannot thrive. Therefore, Ethiopia must continue to invest in sustainable infrastructure that supports the growth and competitiveness of its manufacturing sector.
Building a Strong Brand for ‘Made in Ethiopia’
Ethiopia has a unique cultural heritage and a wealth of natural resources. These can be leveraged to build a strong brand for ‘Made in Ethiopia’ products. A strong brand can help Ethiopian products stand out in the global market, attract consumers, and command a premium price.
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Creating Inclusive Growth
Ethiopia’s industrialization drive should not leave anyone behind. Inclusive growth ensures that the benefits of industrialization are equitably distributed among all sections of society, including women, youth, and disadvantaged communities. This means creating job opportunities for all, providing skills training, promoting entrepreneurship, and ensuring fair wages.
Strengthening Regional Integration
Ethiopia’s manufacturing growth can also be boosted by strengthening regional integration. By collaborating with its neighbors, Ethiopia can create larger regional markets, harmonize trade policies, and improve regional infrastructure. The African Continental Free Trade Area (AfCFTA) offers a significant opportunity for Ethiopia to expand its manufacturing exports to other African countries.
Highlighting Customer-Centricity
In the affordable globe of production, customer-centricity is essential to success. This entails comprehending the requirements and also choices of consumers, offering high-grade products and services, and delivering exceptional customer care. A customer-centric method can help Ethiopian makers differentiate themselves from competitors as well as develop solid relationships with consumers.
Creating a Future-Ready Workforce
As the production sector evolves, so do the skills needed by the workforce. Ethiopia has to prepare its labor force for the future by investing in education as well as training in emerging areas such as digital skills, environment-friendly innovations, and also advanced production. A future-ready labor force will have the ability to adjust to modifications, embrace new modern technologies, and also drive technology in the manufacturing field.
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Conclusion: A Story of Resilience and Hope
The development of Ethiopia’s manufacturing sector is a story of resilience, aspiration, and hope. It’s a story that reflects the spirit of a nation that’s not scared to dream big as well as strive to transform those dreams into fact. As Ethiopia embarks on its journey towards automation, the globe views with anticipation, prepared to commemorate each turning point along the road. As Ethiopia’s manufacturing market continues to grow and thrive, it serves as a sign of hope, brightening the path in the direction of a brighter, much more prosperous future. It’s a testament to the nation’s potential, its durability, as well as its indomitable spirit. It’s a tale that motivates, a story that encourages, and also a tale that provides us all wish. The tale of Ethiopia’s production market is far from over. In fact, it’s just beginning. With each passing day, new chapters are being written, new milestones are being gotten to, and brand-new desires are being recognized. As we look forward to the future, we do so with a sense of hope, enjoyment.
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