Sugar Industry is one of the industries which contribute immensely for the industrial transformation of our country. The country has huge labor and resources like water, suitable climate and ideal landscape to expand this export-oriented manufacturing industry. It has to be done hand in hand with increasing productivity.
Ethiopia has favorable climate for sugar cane development. It also has more than 500 thousand hectares of irrigable land suitable for the sector. Moreover, it has abundant untapped water resource. These make the sector seek more attention and a coordinated effort. Till the downfall of the former regime, sugar factories in Ethiopia were limited to Wonji Shewa and and Matahara only. It was then that Fincha Sugar Factory has come into existence. But, starting from 2010 the government has expanded the industry to regions like S/N/N/P, Oromiya, Afar, Amhara and Tigray.
The industry in addition to producing sugar produces numerous by-products and co products. Few among them are power, animal feed, ethanol, inputs for paint ,glass and other products.
There is an amazing difference when we compare the current escalating sugar demand and the promotional free tea service which was supplied about 62 years ago solely to introduce the product with fellow citizens. It was very tough to tell and convince people to use sugar.
Sugar industry is started in Ethiopia when the then Ethiopian government signed a share holding agreement with The Dutch’s H.V.A company in 1951. The Company started the job taking 5,000 hectares of land for sugar cane cultivation 110 km away from Addis Ababa. Accordingly, the first sugar factory in Ethiopia- Wonji Sugar Factory started production on March, 20 1962.
Next to it, Shewa Sugar Factory was set up at the same venue in 1963. But Wonji and Shewa sugar factories, till their closure, had a unified management. They had been producing about 750 thousand quintals of sugar per annum. But, operation of these factories terminated in 2011 and 2012 respectively for they were very obsolete. A new factory which had been under construction and commence production in 2013 replaced them.
Cognizant of the benefits of sugar industry in Ethiopia, the Dutch Company built another sugar factory about 200 km from the Metropolitan in Matahara. The Factory began operation in 1970.
Latter on the valley of Fincha was studied in the early 1980s. The study carried out proved that it has higher potential for sugar production. Hence, Fincha Sugar Factory was set up and began production in 1998.
Understanding the high potential the country has, the government of F.D.R.E has set up Tendaho Sugar factory in Regulation No. 122/98 in Afar Regional State. It is a two-phased huge factory. By the time it starts working with its full capacity, it uses sugar cane developed on 50 thousand hectares of land as an input and produces 6 million 190 thousand quintals of sugar and 63 thousand liters of ethanol annually. The construction of the first phase of the factory is completed. It is now carrying out trial production.
Even though the sugar industry in Ethiopia is more than half a century old, it is not developed as it is needed. Moreover, the country`s rapid development has sky rocketed the sugar demand. As a result the production of existing sugar factories couldn`t satisfy the local demand. The newly expanding industries which use sugar as a raw material have also worsen the shortage.
Therefore; the government has been importing and supplying sugar to the market with a subsidized price for a couple of years so as to fill in the gap. But, importing is not a permanent solution. Therefore, the Government has given more attention for sugar industries in the manufacturing sector as it is stated in the First Growth and Transformation Plan.
In the mean time, the effort exerted to narrow this gap between sugar supply and demand has paved a situation for the government to create wide job opportunities for citizens. With regard to job creation, especial attention has been given to people around the sugar development areas.
There is also a plan to export sugar as a foreign exchange earning commodity. In this aspect the government is extensively carrying out the various activities of the sector which could be termed as “Sugar Revolution”. It is investing huge capital in the low land areas of the country. One among these is the building of the very huge Tendaho Sugar Factory.
Parallel to this the government has modernized Wenji Shewa and Fincha`a sugar factories. The capacities of the two factories have increased greatly. Consequently, the annual sugar production has grown to four million quintals in 2015 from what it had been 2 million 903 thousand 740 quintals in 2009.
On the other hand, building of Kessem and Arjo Sugar Factories had been completed in the first G.T.P. and started production. The first phase of the construction of Tendaho Sugar factory is completed and is expected to start regular production soon.
During the first G.T.P, additional 65 thousand 363 hectares of land is covered with sugar cane. The land covered with cane before the start of the first G.T.P was only 30 thousand 397 hectares. The growth registered is 215%.
By 2009 annual ethanol production was 7 million 117 thousand liters. In 2015 it has increased to 19 million 804 thousand liters a year. 18 million 480 thousand liters is used as fuel blended with benzene.
Concerning co-generation, Wenji Shewa and Fincha sugar factories have not only become self sufficient in power production but they are also sending 31 megawatts of power to the national electric grid.
Another development registered in the industry is the research work that has increased the productivity of sugar cane. Construction of coffer dams, diversion weir, infra structure of huge irrigation canals, internal roads, houses and factories as well as land preparation have been done extensively because of which small towns are flourishing.
In terms of benefiting the society, social institutions like schools, health centers of both human and cattle, grain mills, potable water, etc and infrastructures like roads, telecommunication lines, electricity, etc are also set up rendering service to localities living around. Due to these life standard of the people is improving. Children of the local community have been trained and deployed at factories and projects as tractor operators, carpenters, security personnel, etc while others are working as cane out growers are allotted with irrigable land.
As well, youth of the localities have organized themselves in micro and medium organizations and are taking part in the development activities. They are currently benefiting themselves and their families from this. The communities are also benefiting producing crops like maize, sorghum, etc using the irrigable land Sugar Corporation has made available to them. They have paid a work visit to Wenji Shewa Sugar Factory cane out growers and have shared their experience.
As for creation of job opportunity, 350 thousand job opportunities were created in the past five years around sugar development projects and factories. The opportunities created were on permanent, seasonal and contract basis.
Despite the fact that the desired result had not been achieved by the end of the first GTP due to different reasons, conducive conditions have been created to enable Ethiopia become one of the best ten countries in producing sugar by 2023.
In the Second GTP wide range of activities are being carried out to finalize the works of the already started sugar development projects. These include the sugar development projects at different stages of construction levels like Tendaho Phase 1, Omo Kuraz 1,2,3 & 4, Tana Beles 1 and 2 as well as Welkayit sugar factories.
These extensive works are expected to increase annual sugar production in the country. Hence, beyond fulfilling the local market, it is also planned to export sugar. Regarding sugar cane development, it is planned to cultivate 211 thousand 564 hectares. This makes the total area covered with sugar cane to rise to 307 thousand 324 hectares.
Moreover, activities like ethanol production, power supply, irrigation infrastructures, housing, etc are planned to be carried out at a large scale which paves way to communities around to participate in the activities and thereby benefit themselves. This includes the 637 thousand new job opportunities to be created to citizens.
Sugar Corporation, which was set up in 2010 has been leading the sector carrying out different development activities. These works range from construction of new factories, expansion of existing factories, building various infrastructures and social service institutions etc. But it is not enough when the number of factories which have entered into operation is considered and the low sugar and sugar by-product production is compared to the plan first set at the start of the First G.T.P. And, this implies that it has to be done more vigorously.
Taking this all into consideration, the government believes to do many radical changes to achieve the goals set in the second GTP at the sugar industry sector. One among the changes is creating an organizational structure which handles the mission properly. So the Corporation has currently organized itself in a new structure which enables it carry out multi sectoral activities and expand sugar development as required.