Investment Opportunities and Joint Venture
The government has decided to transfer public enterprises to the private sector totally or partially. Encouraged by this several domestic and expatriate companies have showed interest to work in joint ventures and private investment on sugar and related sectors. It is known that Sugar Corporation has issued Letter of Intent in September 2016 prior to the government`s recent decision to invite investors.
Accordingly, till January 2019, 30 companies have shown interest and presented their profiles to work in joint ventures with Sugar Corporation. Discussions were held with some of them followed by signing of memorandum of understanding and joint development contracts.
Favorable conditions for jointly developing or privately investing on sugar and diversified products
- Greater interest of the government on investment and its political commitment;
- Conducive investment incentives based on the country`s investment policy;
- The Country`s economic development and
- Abundant natural wealth and labor.
To widely produce sugar and co products in Ethiopia
- 4 million hectares irrigable land suitable for cane development;
- Favorable climate;
- Abundant water for irrigation (rivers);
- Higher cane productivity and
- Large labor force
- In terms of productivity, the country is rich with favorable climate and fertile land which is suitable for sugarcane development.
- Infrastructure (big dams and irrigation infrastructures, roads, airport, electric power, telecom services etc.)
- 102, 741 hectares land covered with sugarcane
- More than fifty years of experience of producing sugar and ethanol locally
- Ten new and three existing huge sugar factories
- Growing of the society`s sugar demand and a vast sugar market
- Expansion of industries (like food, beverage… industries) which need sugar as an input
- Abundant animal resource that opens wide market to produce animal feed and carry out fattening business.
Major Sugar By-products
- Fruits ; Orange, Banana, Mango
- Animal feed
- Cattle Fattening
- Soya bean
- Haricot bean
- Mung bean
Categories of joint venture and private Investment
- Construction of sugar projects
- Administration of sugar factory and operation
- Ethanol factories construction, administration and operation
- Diversified sugar and related products
- Irrigation infrastructure, land preparation and sugarcane development projects
- Sugar factory spare parts production industry
- Animal feed production and fattening
- Pulp and paper factories
- Chipboard producing factories
- Liquor production
- Sugar packing sack producing industries
- Paint producing factories
Main accomplishments of the first & second Growth and Transformation Plan
- Fincha and Wonji Shoa sugar factories are expanded and have increased their production capacity by the scheme of expansion
- Though extent of sugar production planned annually is partially not successful, it is possible to make the annual sugar production to 400 thousand tons from 290 thousand 374 tons in 2010.
- It was possible to make the new sugar factories of Kessem, Tendaho, Arjo Diddessa, Omo Kuraz Number Two and Omo Kuraz Number Three sugar factories operational.
- The land covered with sugarcane reached 102,741 hectares from which it was 30 thousand 397 hectare in 2010.
- Ethanol production booms to 19 million 804 litres from what it was only 7 million 117 thousand litres in Of these large amount of ethanol is mixed yearly with benzene and giving service.
- Several research works which increase sugarcane productivity have been done.
- Several big dams, vast irrigation infra structures, roads, housing, and huge factory constructions works as well as land preparation is widely done.
- Due to lack of infra-structure, limitations of implementation capacity, finance, foreign exchange, spare part as well as machinery supply and many others, the sector is not as fruitful as it is thought. However, because of the chains of activities carried out and other endeavors made, the sector is becoming hopeful now. The country has targeted to become one of the top ten sugar exporting countries by the platform made.
Generally, when the five sugar factories under construction are completed Ethiopia would have 13 sugar factories and the annual sugar production of it would become 2 million 250 thousand tons.
|Comparative Description of Developments in the Sugar Industry Sector|
|No.||Title of the Development||1991||2019|
|1||Number of sugar factories||Two (Wonji Shoa and Metahara Sugar factories)||Eight producing factories (Wonji Shoa, Metahara, Finchaa, Kessem, Tendaho, Arjo-Diddessa, Omo Kuraz 2 and Omo Kuraz 3)
|2.||Under construction||Fincha||Omo Kuraz 1, Omo Kuraz 5, Tana Beles 1 ,Tana Beles 2 and Welkayit
|3.||Annual sugar production||149 thousand 658 tons
|Planned to produce 520 thousand tons of sugar in 2019
In the past years 325 thousand tons to 400 thousand tons has been produced annually
|4.||Annual ethanol production||None||22 million 355 thousand liters is expected to be produced in 2019
In 2014/15 19 million 804 liters is produced ( Out of these large amount of ethanol is mixed with benzene)
|5.||Sugarcane crushed per day||6 thousand 213 tons||Currently eight factories have a crushing capacity of 62 thousand 500 tons
|6.||Land covered with sugarcane||15 thousand 501 hectares||102,741 hectares
|7.||Labor||11 thousand 452 on permanent, contractual and temporary basis||More than 40 thousand workers on permanent, contractual and temporary basis|
|8.||Housing||7 thousand 483 residential houses||21 thousand 147 residential houses and 311 different service providing blocks|
|9.||Number of social service institutions and infra-structures built for the local community around sugar factories and sugar development projects||31 institutions
|255 institutions (schools, health institutions, mills, potable water supply centers, roads, animal health posts, water ponds for animals, farmer/pastoralist training centers, association shops, religious institutions, etc.)|
|10.||Total number of sugarcane outgrowing and providing associations||1 thousand 200 members organized in seven associations at Wonji only
|15 thousand 316 members organized in 70 associations
Of these 9 thousand 319 members organized in 31 associations at Wonji
Some associations in Wonji share 50,000 to 240,000 birr for each individual member every 18 months
|11.||Total land covered with sugarcane out growers in the sugar industry
|1 thousand 2o hectares at Wonji only
|17 thousand 246.82 hectares
(Of these, 7 thousand hectares found at Wonji)