Sugar sector reform increasing sector production capacity: Corporation

ADDIS ABABA (The Ethiopian Herald; August 13, 2020) – The reform in the sugar sector is helping to increase the annual production capacity of sugar factories, Ethiopian Sugar Corporation said.

Gashaw Aychiluhim, Corporate Communication Executive Officer told The Ethiopian Herald that sector reform has enabled sugar factories to witness an increase in production during the just ended fiscal year.

Up until the end of June, seven sugar factories have produced about 3.1 million quintals of sugar. In addition, Fincha and Metehara Sugar factories alone have produced 14.2 million liters of ethanol. Last year’s sugar and ethanol production performance exceeded that of the previous two years.

“The production performance of both sugar and ethanol products exceeded 600,000 quintals and six million liter respectively when we compare this year’s performance with that of last year’s. This index will increase in the remaining two months.”

As the country’s annual demand for sugar is over 7.5 million quintals, currently, the government has purchased and is importing about 2 million quintals from India to meet local demand gap, Gashaw said.

Speaking on the outcomes of the sugar sector reform during last budget year, Gashaw said that “We should never be over-excited. But it is an encouragement for us to work harder and register better performance in the future. We would only be exited once we are able to meet the local demand and start to export our products to other countries.”

As to him, the reform has laid the foundation to achieve this vision. The government is committed to privatizing sugar factories that have are in huge debt and require additional investment capital.

To some extent, the COVID-19 outbreak has affected the process of privatizing six identified sugar projects, he said.

“If the privatization process is executed as planned and we start to produce with full potential, we will be able to meet our local demand for sugar.”

As a result of the failure to finalize the construction of sugar projects on time, the country has lost 9.4 billion birr from three projects among the ten sugar factories launched by the government years ago. Currently, five of them have already commenced production.

Arjo Dededisa, Tendaho, Kessem, Omo Kuraz II and Omo Kuraz III sugar factories have commenced their production from 2015 to 2018. The other remaining five projects are under construction.

As Metals and Engineering Corporation (METEC) that has been awarded the contract failed to finalize the construction of the sugar factories, foreign companies have been awarded a new contract to finalize it.

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