ETHIOPIA – State owned Ethiopian Sugar Corporation (ESC) has officially commenced operations at its recently completed sugar manufacturing unit, Tana Beles 1, located north of the country’s capital Addis Ababa.
The factory was inaugurated in June 6, 2021 and has since then been put under testing with corrective works undertaken to ensure it is fully operational.
Prior to the finalization of the construction works, the project has derailed for nearly a decade as the first sand was turned in 2012 with a planned completion date of around 18 months.
However, by end of 2017 only about 60 percent of the project was completed forcing the government to cancel the business agreement with the original contractor, Metal Engineering Corporation (MeTeC).
CAMCE, a corporation which belongs to China National Machinery Industry Corporation (SINOMACH), took over the project in September 2019.
The government estimates that it has injected about US$231m in the construction of the facility which has a processing capacity of 12,000 tons of sugarcane and 1,000 tons of refined sugar per day respectively.
Ethiopia expects the completed project to produce 200,000 tons of refined sugar annually, while creating job opportunities for nearly 10,000 Ethiopians.
It will also produce 45 MW of electricity from bagasse of which 16 MW will be used for its operation and the rest will be injected into the national power grid.
The factory is also expected to have the capacity of producing high amount of molasses and ethanol.
Ethiopia has launched major reforms to develop its sugar sector and make it more competitive.
To this end it has earmarked a number of government owned facilities to be privatized, a process that is being overseen by Ernest & Young Global (EY) Ltd.
Tana Beles 1 is among the companies slated for privatisation which include Tendaho, Kesem, Omo Kuraz II and III, and Arjo-Dedesa which are operational and Tana-Belese II, Welkayit, Omo Kuraz I which are currently under construction.
Initially, the government intended to privatise 13 sugar factories; however, it dropped the plan for three operational plants: Wonji Shoa, Metehara and Fincha sugar factories, and decided to keep them under government ownership.
Also, the privatisation plan of Omo Kuraz VI Sugar Factory, which was under construction was held back due to poor performance by the building contractor, leaving it 20% complete.
The decision to offload the sugar factories has come about as the government is unable to cover the debt accumulated over the years and maintain funding for the faltering sugar plants.