Information for Investors

Sugar Cane

Production and Processing of Sugar Cane

It is to be recalled that sugar plantation in Ethiopia started in 1954/55. When Wonji Sugar Factory was commissioned, it produced 15,843 tons of white sugar.

In the first campaign, exactly when sugarcane development began in 1951, the company was owned by Dutch Company: HVA (Handlers-Vereenging Amesterdam).

It is known that the development of sugar cane plantation was began on 5,000 hectares in the upper reaches of the Awash basin, 100 km Southeast of Addis Ababa.

Presently, there are three large-scale sugar establishments in Ethiopia: two of them in the Awash Basin (Wonji, Shewa and Metehara) and one (Finchea) in the Blue Nile Basin.

It has been confirmed that the present level of national production from the three sugar estates is approximately 261,041 tons and 87,257 tons of molasses per annum respectively.

The above mentioned three sugar factories have a production of 280,000 tons of sugar annually. The total is developed by three factories in 23,769 hectares. It is hoped that the area for the plantation will further expand in the near future.

Land and Water Resources

Ethiopia is endowed with abundant areas of suitable law lands; rivers and conducive or suitable climate for sugarcane growth.

Potential Irrigation Sites for Sugar Cane Development

BASIN

  1. Awash
  2. Blue Nile
  3. Tekeze
  4. Omo Gube
  5. Baro
  6. Nile
  7. Omo

Potential Rain-Fed Sites for Sugar Cane Development (in ha)

Sites                                        Cross Area                  Suitable Areas                                    

  1. Yayu (Ilubabor)                      12,400                         5,000
  2. Duko (Gojeb Valley)              12,000                         1,400
  3. Tepi (Jimma)                           8,500                           1,650
  4. Serbo (Ilubabor)                      12,000                         1,900
  5. Bune (Ilubabor)                       N.A                             N.A

Labour

Ethiopia has abundant hard-working, inexpensive and easily trainable labour force. The average wage for unskilled labour is considerable low.

Market

It is evident that sugar in Ethiopia serves for direct household consumption and as an intermediate input for other industries like pastries, bottling companies and breweries.

Sugar Demand and Expected Production

Production

Measurement

2010

2011

2012

2013

2014

2015

Annual Demand

Ton

500,000

575,000

661,250

760,438

874,503

1,005,679

Annual Expected Production

Ton

290,934

371,092

932,542

912,562

1,326,100

2,252,013

Source: Sugar Corporation 2011-2015 Strategic Plan (2012)

Currently, there is a constant deficit in domestic sugar supply. Hope that there will be a surplus supply in the near future.

Favorable Conditions for Investment in the Sugar Industry

  • There is no fierce competition in the Ethiopian sugar industry that prohibits potential investors from investing in the sector.
  • The industry requires a huge capital investment and the payback period is longer (12 years).
  • Customers have no strong substitute for sugar. Sugar substitutes (e.g. honey) are in short supply in the country.
  • The investors have the right to totally invest in and on sugar factories or they can also enter the sector with local co-financers. Government will also take part in the development of the sector in case local private co-financers fail to humiliate.

An investor who is interested to enter into sugar cane plantation and processing can have the right of customs duty exemption and investment incentives. Investors also enjoy remittance of funds and have investment Guarantee and Protection.

Cost of land of utilities is considerably low. Don’t hesitate to join and invest in the sugar cane plantation and processing.