Investment Opportunities and Joint Venture
The government has earlier decided to transfer public enterprises to the private sector either totally or partially. Encouraged by this several domestic and foreign companies have been showing interest to work either in joint ventures or in private investment on sugar and related sectors.
Favorable conditions for privately investing on sugar and diversified products
- Greater interest of the government on transferring the sector to private investors and its political commitment to focus on other critical issues;
- Conducive investment incentives based on the country`s investment policy;
- The Country`s continuous economic development and
- Abundant natural resource favorable for the sector and the large labor.
Suitability to widely produce sugar and co products in Ethiopia
- Over 4 million hectares irrigable fertile land suitable for cane development;
- Favorable climate;
- Abundant water for irrigation (rivers);
- Higher cane productivity;
- Large labor force;
- Infrastructures (big dams and irrigation infrastructures, roads, airport, electric power, telecom services etc.);
- Around 80,000 hectares land covered with sugarcane;
- More than sixty years of experience of producing sugar and fifteen years exposure in producing ethanol locally;
- Eight fully operational sugar factories;
- Continual domestic sugar demand growth and a vast sugar market at the region level;
- Potential to obtain 162 tons of cane per hectare within 15 months’ time;
- Expansion of industries (like food, beverage… industries) which need sugar as an input and
- Abundant cattle resource that opens wide market to produce animal feed and carry out fattening business.
Major Sugar By-products
- Carbon dioxide
- Fruits ; Orange, Banana, Mango
- Animal feed
- Cattle Fattening
- Soya bean
- Haricot bean
- Mung bean
Opportunities for joint venture and private Investment
- Construction of sugar projects;
- Administration of sugar factory and operation;
- Ethanol factories construction, administration and operation;
- Development of diversified sugar co- products;
- Irrigation infrastructure construction, land preparation and sugarcane development projects;
- Sugar factory spare parts production industry;
- Animal feed production and fattening business;
- Pulp and paper factories;
- Chipboard producing factories;
- Liquor production;
- Sugar packing sack producing industries;
- Paint producing factories.
Main accomplishments gained on the sector
- Fincha and Wonji Shoa sugar factories are expanded and have increased their production capacity by the scheme of expansion in which the old Wonji Shoa Sugar Factory is replaced by a new one;
- Though size of sugar production planned annually is partially not successful, it was made possible to increase the annual sugar production to 400 thousand tons from around 300 thousand tons;
- It was possible to make the new sugar factories of Kessem, Tendaho, Arjo Diddessa, Omo Kuraz Number Two and Omo Kuraz Number Three as well as Tana Beles sugar factories operational although the operation of Tendaho Sugar Factory is temporarily terminated;
- The land covered with sugarcane has reached 80,000 hectares;
- Ethanol production increased to 19 million 804 liters from 7 million 117 thousand liters in 2010 of which a large amount of ethanol is mixed yearly with benzene to serve as a fuel;
- Several research works which increase sugarcane productivity have been carried out;
- Several big dams, vast irrigation infrastructures, roads, housing, and huge factory constructions as well as land preparation works are widely carried out;
- Due to a lack of infrastructure; limitations in implementation capacity, finance, foreign exchange, spare part as well as machinery supply and many others, the sector is not as fruitful as it is sought. However, because of the chains of activities carried out and other endeavors made, the sector is becoming hopeful, especially for potential investors.
Nexus Manufacturing Share Company
Nexus manufacturing Share Company is a private company involved in developing a range of alcohol products from molasses at a capacity of 50,000 liters a day which is expandable to 100,000 liters. The Company, signing an agreement with the then Ethiopian Sugar Corporation in April, 2018 and building molasses based distillery plant next to Omo Kuraz Sugar Factory Two, has started ethanol production in early 2022.
The Factory is located at Southern Nations, Nationalities & Peoples Region next to Omo-Kuraz Sugar Factory Two. It gets its major input – molasses from Omo-Kuraz Sugar Factory Two on payment including other utilities such as purified water and steam as per an agreement the two parties will reach in due course.
RORANK Business Share Company
RORANK Business Share Company is a private company already engaged in the manufacturing of alcoholic liquors. The Company, signing an agreement with the then Ethiopian Sugar Corporation in March, 2017 and building molasses based distillery plant next to Kessem Sugar Factory, has made the necessary preparation to begin ethanol production in early 2023. Its factory has a capacity of developing a range of alcohol products from molasses at a capacity of 50,000 liters a day which is expandable to 100,000 liters.
The Factory is located at Afar Region State next to Kessem Sugar Factory. It gets its major input – molasses from Kessem Sugar Factory on payment including other utilities such as purified water and steam as per an agreement the two parties will reach in due course.