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Afghanistan Ice Cream Sweetens Business Appetite

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By Amie Ferris-Rotman

HERAT, Afghanistan, July 27 (Reuters) - In a nation wrenched by decades of war, perhaps it is of no surprise that one of Afghanistan's most successful brands manufactures what is sorely lacking from the conflict-scarred landscape: joy.

The rectangular vanilla bars mechanically dipped in thick chocolate at the Herat ice cream factory in western Afghanistan are a world away from intensifying violence in a war that has dragged on into its 11th year.

Herat Ice Cream's orange sorbets, coffee-flavoured bars, cones and a mock "Magnum" are sold in all of Afghanistan's 34 provinces, a rare success for a business benefitting from no foreign investment.

Officials in Herat province bordering Iran now want to build on such a success to turn the region into a business hub, creating a "Herat" brand in a nation where locals depending on foreign aid have largely failed at independent commerce.

"I started with half a million and now my company is worth $15 million," said Ahmad Faizi, Herat Ice Cream's chief executive, who set up the firm almost nine years ago with his savings from an import business.

His 216 employees work around the clock to make the country's beloved treats, turning imported and local milk into 30 tonnes of ice cream a day. They sell for the equivalent of 30 cents a piece and generate $5 million a year in turnover.

They are then boxed by headscarved women and shipped in chilled containers on Afghanistan's often unpaved roads, even reaching Kandahar in the south, a stronghold of Taliban insurgents, and remote mountainous areas on the border with Pakistan.

Foreign aid is dwindling as the 2014 deadline looms for NATO to withdraw most of its combat troops, sparking concern that the country's crippling corruption and shaky security could mean Afghanistan will not be able to stand on its own two feet.


HERAT: A SUCCESS STORY

Herat, a large, fertile province with the second biggest population after Kabul, is emerging as a success story, setting an example for the rest of the country.

The local government expects Herat to contribute 20 percent of national government revenue this year, or some $300 million, up two percent on last year. The majority comes from customs duties collected from robust trade with Iran.

"Herat has potential to be a business hub. We have a strong economy, we are big," said Herat member of parliament Reza Khoushak Watandost, who also runs a local family-owned coal business.

"In history, Herat was first to have businessmen who traversed the country," he said in his office in the provincial capital of Herat city, which bustles with trade of Iranian-made products, many offering better quality than the clothes and kitchenware for sale in the capital, Kabul.

Though Iran serves as a lifeline for Afghan trade in Herat, Watandost and other businessmen complained of dumping by its richer neighbour -- trying to undermine local production by selling cheaper goods.

But vast agriculture potential, especially grain, fruit and meat, means Herat could thrive once foreign money dries up, says the U.S. Department of Defense's Task Force for Business and Stability Operations (TFBSO), a Pentagon unit helping the Afghan economy.

TFBSO predicts Herat's $1 billion economy could jump to $2.4 billion a year by 2020, turning Herat's food, marble and cashmere into a brand. These made-in-Herat goods have already comes to symbolise quality.

"We're very confident that after 2014 things are actually going to get better because the distortions to the economy that donor money has brought to Afghanistan will begin to go away," said its director, James Bullion, on a trip to Herat's industrial park, one of a handful in the country. (Reporting by Amie Ferris-Rotman, Editing by Rob Taylor and Ron Popeski)

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