ethiopian sugar industry profile - jan 2015

Ethiopian

Sugar Industry Profile

www.etsugar.gov.et || www.facebook.com/etsugar

የስኳር ኢንዱስትሪ በኢትዮጵያ

It was at Wonji in 1951 some 110 km. east of the capital Addis Ababa that modern sugar industry started in Ethiopia as a share company established by foreign private investors & Ethiopian government. It was the Netherland’s H.V.A. Company that entered into the sector as a foreign share holder. When the factory started production in 1954 its initial production was one thousand four hundred quintals of sugar a year. At the start the share company had five thousand hectares of land for its sugarcane cultivation. As its location is one of the most suitable areas of the world to the sector it opened a door to Wonji Candy Factory to come forward.

Then, followed Shoa Sugar Factory in 1962 with annual 1,700 quintals of sugar production capacity. The two factories known by the name Wonji Shewa Sugar Factory altogether had the capacity of producing 750,000 quintals of sugar per annum till recent time i.e. prior to the completion of its expansion. Serving for more than half a century and getting obsolete, these two factories were closed in 2011 and 2012 respectively. Replacing these pioneer factories, the new and highly sophisticated new factory had started production in 2013 with higher production capacity.

The second factory Metehara Sugar Factory established as a share company between

same Netherlands company and the then Ethiopian government in 1965 and started production in 1969 at a location known as Mertti some 200 km from adis Ababa. Currently, the factory with a total 10,235 hectares of sugarcane cultivation land has a capacity of producing 1.3 million quintals sugar and 12.5 million liters ethanol a year on average.

Fincha Sugar Factory as a third sugarcane crushing mill to the nation came into existence in late 1998 though its establishment process and other activities dated back to 1975. The gap between the establishment and commencement of production of the factory is mainly occurred due to the political change the nation had undergone. Its finance sources were African Development

Bank and Development Fund; Governments of Australia and Spain and also domestic banks of the nation. Its initial sugar production was 500,000 quintals per annum. More modern than the former factories, the factory’s construction job including its ethanol plant was executed by American companies known as F.C. Shefer and Associates and Netherland’s company called Dewetto International while many domestic construction companies had also played their part in the process.

Five years after the establishment of Methara Sugar Factory i.e in 1974 following the dawn fall of the emperor’s regime all sugar factories were made to be administered under the ownership of the government and started

Ethiopian Sugar Industry Profile

32 Ethiopian Sugar Industry Sugar Corporation

operating under the then Ethiopian Sugar Corporation. The corporation had also been made to administer the Addis Ketema and Asmara Candy Factories together with the above mentioned three sugar factories.

Later in 1992 when the corporation was dissolved by stature; all the above factories were reestablished as separate public enterprises. Following this the Ethiopian Sugar Industry Support Center came into existence in 1998 to provide support to the factories. The center was established as a share company of the Development Bank

of Ethiopia, Ethiopian Insurance Corporation and the three sugar factories.

In 2006 Tendaho Sugar Development Project was established as a fourth project in the country. The two-phaseed project is being executed to eventually enable the factory produce 619,000 tons of sugar and 63 million litters ethanol a year. The factory will in total have 50,000 hectares of sugarcane cultivation land.That same year the Ethiopian Sugar Development Agency was established replacing the support center to assist the sugar factories in project development, research, training and marketing vis-à-vis its regulating role.

The present “ Sugar Corporation “ with a vision of executing sugar development activities in a large scale and structure came into existence on October 2010 by the Council of Ministers Regulation No.192/2010 replacing the former Ethiopian Sugar Development Agency.

Purposes of Establishment of

Sugar Corporation

• To grow sugarcane and other sugar yielding crops;

• To process and produce sugar, sugar products, sugar by-products and products of sugar by- products;

• To sell its products and by-products in the domestic and export markets;

• To cause the undertaking of feasibility studies, design preparation, technology selection and negotiation, erection and commissioning of new sugar development and expansion projects;

• In cooperation with the relevant organs undertake studies and research in the field of sugar cane plantation and sugar production technologies and implement useful results thereof;

• In cooperation with capable domestic enterprises, to cause the designing and fabrication of machineries and spare

parts required by public sugar factories;

• To posses, in accordance with the law, and develop lands required for its operations;

• To encourage and support sugar cane growers who are supplying their cane products to public Sugar factories;

• To cooperate with the concerned educational institutions in producing the required type, number and quality of trained manpower for the sugar industry;

• In line with directives and policy guidelines issued by the Ministry of Finance and Economic Development, to sell and pledge bonds and to negotiate and sign loan agreements with local and international financial sources;

• To engage in any other related activities necessary for the attainment of its purposes.


Therefore, to accomplish the aforementioned purposes, the corporation has carried out expansion projects on the existing sugar factories while it is constructing ten new sugar factories at different regions of the country. Accordingly, the corporation, besides finalizing the two-phaseed project of Tendaho Sugar Development project and facilitating the entrance of Arjo Didessa Sugar Factory into regular operation, is building five new sugar factories at Southern Nations Nationalities & Peoples Region; three at Amhara Regional State; one at Tigray Regional State and a factory at Afar Regional State (Kessem) with 175,000 ; 75,000 ; 50,000 and 20,000 hectares of sugarcane plantation field respectively.

Vision, Mission & Values

ÒÒ Stand as one among ten leading countries of the world in sugar industry in 2023 based on a sustainable growth.

Vision :

Ò� Creating modern technology and capable human resource so as to develop the nation’s potential to the sector, produce sugar, sugar bi-products and co-products and take remarkable foreign market share and support the nation’s economy beyond satisfying domes-tic demand.

Mission:

Core ValuesÒh Sustainable change and competitiveness;

Òh Virtuous work ethics;

Òh Productivity is crucial to our existence;

Òh Popularity is our typical feature;

Òh We never stop learning;

Òh We encourage creativity and best performance;

Òh Working in team spirit is our unique feature;

Òh Environment protection is fundamental to our development;

Òh Development of human resource is vital to our success.

Pu

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Sugar FactoriesThe factory is found at Oromiya Regional State near Nazareth Town at 110 Kilo Meters from Addis Ababa. Commencing production in 1954 it is the oldest and the pioneer in the history of Ethiopia’s sugar industry. And Shoa Sugar Factory constructed in 1962 is the second oldest and both, being obsolete, have stopped production since July, 2012 and July, 2013 respectively. The two factories constructed by the Holland Company known as H.V.A had a capacity

of producing 750,000 quintals of sugar a year. The sugarcane plantation land of these two factories was 7,000 hectares out of which 1,000 had been planted by out growers.

In a bid to replace these two oldest factories with a new and modern one, an expansion project had been carried out both in the cane cultivation field and the factory since 2010. And, the factory plant expansion project has come into its completion in July,

2013. Accordingly, the newly built and highly automated Wonji/Shoa Sugar Factory will initially have a capacity of crushing 6,250 tons of cane a day and producing 174,946 tons of sugar per annum which with further expansion will reach up to 12,500 TCD maximizing its production to 220,700 tons of sugar a year. The new plant will initially have a capacity of producing 10,000 meter cube ethanol per annum that with further expansion will reach 12,800 meter cube. By the end of the GTP period the factory would be able to contribute 21.15 mega watt electric powers to the national grid in addition to

satisfying its own demand which is around 10 mega watt.Its agricultural expansion project is currently being carried out around the areas known as Wakie Tiyo, Welenchiti and North Dodota areas. The factory, with the help of this agricultural expansion project, will have 16,000 hectares of sugarcane plantation field in total. Till December 2014 the total cane cultivation field of the factory has reached 11,026 hectare. And, the entire factory’s sugarcane field cultivated with the agricultural expansion project is owned by out grower farmers of the surrounding area.

I.Wonji Shoa Sugar Facory


II.Metehara Sugar Factory

The factory is found in Oromiya Regional State at 200 Kilo Meters distance from Addis Ababa. Same as Wonji/Shoa Sugar Factory its construction was carried out by H.V.A. Company of the Netherlands. The factory started sugar production in 1970. Formed as Share Company between the then Ethiopian government and the constructing company, it was the third sugar mill to the nation. It’s sugarcane plantation filed is 10,235 hectares. It has currently 10,100 hectares of land covered with sugarcane. Until very recent times it was the best when it comes to its production capacity that is 136,692 tons of sugar a year. Through an expansion project conducted it came up with an ethanol producing plant by the end of 2010. Currently the factory’s ethanol plant has a capacity of producing 12,500 Meter Cube ethanol per year.

III. Finchaa Sugar Factory

The factory is found in Oromiya Regional State in Horro Guderru Zone 350 Kilo Meters away from the capital – Addis Ababa. The finance needed to construct the factory was secured from the African Development Bank & African Development Fund; governments of Australia & Spain and domestic banks of the nation. The factory started production in 1998 and till July, 2013 the average annual production capacity of Finchaa Sugar Factory was 110,000 tons of sugar while it had the capacity of producing 8,000 meter cube ethanol. Till the last months of 2010 it had been the only factory in the country that produces ethanol.

The factory has carried out expansion projects both on its sugarcane plantation field and its sugar mill. Hence it has come up with a plant of 12,000 TCD capable of annually producing 270,000 tons of sugar and 20,000 meter cube ethanol by the end of the GTP period. Its previous capacity was 5,000 TCD.

To acquire and cultivate cane cultivation field capable enough to feed the expanded plant with more than double crushing capacity, the factory’s agricultural expansion project has been carried out around the areas known as East Bank (eastern side of Finchaa River) , Neshie and also on the idle areas found on the Western side of the river. The factory, therefore, in near future will bring its total sugarcane plantation land which had been only 12,170 hectares close to 21,000 hectares. The cultivation land expansion job has enabled the factory to expand its cane covered land to more than 18,750 hectares till December, 2014. 1110 Ethiopian Sugar Industry Sugar Corporation

It is found at the lower Awash River Basin of Afar Regional State around Millie, Doubti, Assaeitta and Affambo Woredas at a distance of 670 k.m. from Addis Ababa. The project was started in 2006 with 50,000 hectares of land to be cultivated and is a two-phased factory construction with a 26,000 TCD with its full capacity. The first phase of the factory with 13,000 TCD has started production as of October, 2014. Upon coming to its maximum crushing capacity with phase two completed, the factory will be able to produce more than 619,000 tons of sugar and 63,000 meter cube ethanol annually.

Out of the total hectares of the cane farm land the factory cultivates 25,000 hectares sugarcane plantation field by its own while the rest 25,000 hectares are to be cultivated by surrounding out grower pastoralists. The factory has cultivated sugarcane over 19,000 hectares till November, 2014. The cane cultivation field is getting its water supply from Tendaho Dam that has a capacity of holding more than 1.8 billion cubic meter water.

It is the hugest plant in the country and it will take the lion’s share of the total amount of sugar produced in the nation. Out of the total 120 mega watt electric power it generates from its sugar bi-product it will export 76 Mega Watt electric powers to the national grid while the rest is consumed for its own regular operation. Furthermore, up on completion of the construction of the second phase and reaching its maximum production capacity the factory is expected to create job opportunities for around 50,000 citizens.


IV. Tendaho Sugar Factory


ugar Corporation is

working vigorously

to raise the

nation’s current sugar

production capacity

remarkably so that

the nation will greatly

benefit from the sector.

And, according to the

survey conducted at

a national level on

the water resource &

canal development

opportunities, it is

proved that the country

has a potential of more

than 500,000 hectares

of land suitable for

sugarcane plantation.

The upper & lower

areas of Beles River,

areas of south-west

of Lake Tana called

Upper Dinder , areas

along Tekezzie River &

its tributaries around

Welkayit & Humerra ,

valleys of Anger River

– Negiesso, central Genallie River

and Barro-Gillo rivers of Gambella

are among some of the areas suitable

for sugar cane production. Based on

the above survey the corporation is

currently building ten new sugar

factories at various regions of the

country while it has undertaken the

Arjo Didessa Sugar Factory which

had been under the ownership of

a Pakistan company called Al-

Habesha P.L.C since mid of 2012.

S

New Sugar

Development

Projects


1.Kessem Sugar Development Project

IThe project is found at Zone

Five in Fentallie and Dulecha

Woredas of Afar Regional

State, 50 kilo meter from

Metehara Sugar Factory. It is a

project which will have a total

of 20,000 hectares of land to

be cultivated with cane & its

plantation stretches to the

areas known as Kessem and

Bolhomon.

Earlier the Kessem project was

part of the expansion project

of Metehara Sugar Factory. It

was after the establishment of

Sugar Corporation the project

was made to proceed as an

independent entity.

It is a factory expected to

enter into regular production

by March, 2015 and will also

be a factory with ethanol and

co-generation facility. Upon

completion the factory will

have a capacity of crushing

6,000 tons of sugarcane per day

& thereby developed to a level

with 10,000 TCD and capable

of producing 153,000 tons of

sugar & 12,500 meter cube

ethanol at the start and when

it later reaches its maximum

crushing capacity it will

produce 260,000 tons of sugar

and 30,000 meter cube ethanol

a year. Moreover, the factory

out of the total 26 mega watt

electric power it generates,

will contribute 15 mega watts

to the national grid.

2. Kuraz Sugar Development Project

t is a project found in South

Omo Zone (Selamago and

Gnanegatom Woredas);

Benchmaji Zone (Surma and

Mieinitshasha Woredas)

and Keffa Zone (Diecha

Woreda) of Southern Nations,

Nationalities & People

Region. It is a huge project

where four out of the total

five sugar factories are found

under construction. Among

these five two will work with

24,000 TCD each and are

capable of producing 556,000

tons of sugar and 52,324

meter cube ethanol a year

while the rest three will work

each with 12,000 TCD and are

capable of producing 278,000

tons of sugar and 26,162 meter

cube ethanol a year.

The project will have a total

area of 175,000 hectares of land

for its sugarcane cultivation.

This wide area of cultivation

field will get its water supply

from the Omo River through a

diversion weir which is under

construction with 381 meter

width & 22.4 meter height.

Upon reaching their

maximum crushing capacity

these five sugar factories

will altogether produce

1,946,000 tons of sugar and

183,134 meter cube ethanol

per annum. Furthermore, the

factories out of the 415 mega

watt electric power which

they are expected to produce

through cogeneration will

contribute 275 mega watts to

the nation’’s’ electric grid.


3. Wolkayit Sugar

De velopment

ProjectThis is

the other sugar development

project located at 1,200 kilo

meters from Addis Ababa

at the Western Zone in

Wolkayit Woreda of Tigray

Regional State. One sugar

factory with 24,000 TCD is

found under construction and

when it reaches its maximum

production capacity, the

factory will be capable of

producing 484,000 tons of

sugar and 41,654 meter cube

ethanol a year. The project’’s

total area of land for sugarcane

cultivation is 50,000 hectares.

It will get its water supply

from the river called Zarema

upon which the construction

of a dam named “May-Day” is

in progress. The dam which is

under construction by a local

construction company-Sur

Construction, will have 840

meters width and 135.5 meters

height. When completed, May-

Day Dam will have a capacity

of containing 3,497,000,000

meter cube water.

4.Belles Sugar Development

Project

It is a project mainly found

at Amahara regional State at

576 kilo meters distance from

Addis Ababa where three sugar

factories are under construction

and some parts of its cane

plantation field is also found in

Benishangul Gumuz Regional

State. The construction of

three sugar factories with

12,000 TCD each is in progress.

It is a project with a total area

of 75,000 hectares for its cane

cultivation and its water supply

is from Beles River through a

diversion weir built on it.

Reaching their full capacity,

each sugar factories will have a

capacity of producing 242,000

tons of sugar and 20,827 meter

cube ethanol per year.

5. Arjo Didessa Sugar Development Project

It is a project found at western

Ethiopia of Oromiya Regional

State in eastern Wollega and

Eilu Ababora Zones at the

Didessa Rift Valley at a distant

of 540 kilo meters from the

capital through the route of

Addis Ababa-Jimma-Beddelie-

Nekemet Road. The project

had been owned by a Pakistan

company called Al-Habasha

P.L.C. which had been unable

to proceed the business.

Therefore, the company

had been transferred to the

ownership to the Ethiopian

government and was made to

operate as a property of Sugar

Corporation as of August, 2012.

Over 90% of the construction

of the plant was completed

when it was transferred to

the corporation. The factory,

expected to commence

production by mid of 2015, at

the start will have a capacity

of crushing 8,000 tons of cane

a day which as per its design

capacity and with further

expansion job will reach to

12,000 TCD.

To accomplish these targets, the corporation is working hand-in-glove & in coordination with the federal & regional government institutions responsible for con-structing roads, electric power gen-eration, water supply, telephone networking & housing facilities. Both residential & non residential houses in the new sugar factories are made fully from the product of agro stone which is more eco-nomical either in terms of money or time. And, this effort of the corporation, working in collabo-ration with the Ministry of Urban Development & Construction and its consulting agency, has greatly saved huge amount of money and unnecessary time wastage. The ten new sugar factories under con-struction are expected to create di-rect and indirect job opportunities to more than 500,000 citizens in various fields of work. Moreover, due to the sectors’ development which is mainly found being con-ducted in remote areas of the na-tion local people of thes area sare enabled to get access to various social services and infrastructures including irrigable farm lands.

Current Sugar Distribution System

Currently the task of distributing sugar all over the country is managed by quota system set by the government. And, the distribution system has three features:-

• Sugar Distribution in Addis Ababa

Distribution of sugar in Addis Ababa is based on a quota set by A/A Trade and Industry Bureau to be distributed through retail traders and Consumers’ Associations’ Shops. And other service providers get sugar from Ethiopian Fruit and Vegetable Share Company (ETFRUIT).

• Sugar Distribution at RegionsDistribution in the regions is carried out by Ethiopian Whole Sale Trade Share Company to selected towns for distribution. Then whole sellers of regions selected by regional trade & in-dustry bureaus distribute sugar to consumers.

• Sugar Distribution to Industries

Industries that use sugar as an input to their production get sug-ar directly from Sugar Corporation according to a quota set by Ministry of Trade and Sugar Corporation as per the survey con-ducted concerning each industries consumption.

It is from the corporation’s warehouses here in the capital and at its sugar producing factories that all involved in the business of distribut-ing sugar collect the sugar supply.


Structure of Sugar

CorporationSugar Corporation is established on October, 2010 by the Council of Min-isters Regulation No. 192/2010 and is led by a director general. Accordingly, the corporation is entitled to adminis-ter the existing sugar factories as well as new sugar development projects.

And, following a study of BPR in 2011 it is organized as follows:-

1. Office of Director GeneralCarry out a follow up job of the application of special assignments singled out by the director gen-eral of the corporation; planning ,coordinating and conducting meetings of management; carry out a coordination and follow up activities on common tasks given to divisions and reporting on their performance;

2. Canal & Houses Construction Division

Conducting canal & housing construction on the existing and new sugar factories; carrying out maintenance to those already in use and carrying out environmen-tal protection activities;

3. Operation DivisionCarrying out a follow-up, support

& supervision job on agriculture and factory operation activities both on the existing and new sugar factories;

4. Public Organization DivisionOrganizing and coordinating out growers and small scale enterprises & carrying out follow up activities; managing compensation, rehabilita-tion and land distribution programs;

5. Marketing DivisionManage and carry out market re-search & promotion on sugar and by-products of sugar; directing & running domestic sugar distribution activities and manage foreign mar-keting & logistic activities;

6. Research & Training DivisionManaging & conducting research on sugarcane; running research activities to develop sugarcane varieties and on sugar technology and also managing & conducting training;

7. Plan & Project DivisionPreparing corporate policies & strategic plans; manage operational plans, monitoring and supervision activities; monitor and evaluate pro-ject plans and studies;

8. Human Resource Management & Development Division

Carrying out human resource man-

Communication Directorate Director – Ato Zemedkun [email protected]: +251 (0) 11 552 74 75Mob: +251 (0) 913 53 96 94www.etsugar.gov.et

www.facebook.com/etsugarLocation of Head Office:Kazanchise around Ethiopian De-velopment BankTel: 251 11 552 66 53/52 68 96P.O.Box – 20034 Code 1000 A.AA

ddre

ss

agement activities; strengthening employee-industry relationship; designing and managing a system that helps human resource devel-opment;

9.Finance DivisionManage financial and related activities; carrying out financial supervision; perform fund admin-istration and treasury manage-ment tasks;

10.Plantation & Factory Construc-tion Division

Manage and carry out sugarcane plantation development and fac-tory plant construction activities;

11.Corporate Kaizen & Change Management Division

Design and manage transforma-tion and change management ac-tivities; implement and supervise activities of kaizen;

12.Purchasing & Property Adminis-tration Division

Carry out and manage procure-ment, property and facility admin-istration activities;

13.Co-Products & Agro-Processing Division

Preparing animal feed from bi-products of sugar mixing them with other extra mixtures; prepar-ing natural fertilizer from deposit of sugar and ethanol; cultivating other crops alongside sugarcane; cary out cows fattening activities; rearing milk producing cows and establish factory that orchestrate milk outputs ; cultivate fruits and orchestrate them in factory;

14.Machinery Spare part and Main-tenance Service Industry Centre

Making machinery, agricultural tools, light and heavy vehicles, motor bicycles, canal diesel pumps, diesel generators, garage tools and spare parts entirely available; giving maintenance ser-vice to agriculture, construction, light and heavy vehicles, canal diesel pumps, extra-attached tools and motor bicycles at the center, factories and projects level reliably.


:+251-(0)11-552-7475/6322 : +251-(0)11-515-1283 : 20034 Code 1000 A.A [email protected]

www.etsugar.gov.et || www.facebook.com/etsugar

Ethiopian Sugar Industry Profile

ethiopian sugar industry profile - jan 2015

Documents

sugar factories

quintals sugar

factory metehara sugar

fincha sugar factory

shoa sugar factory

initial sugar production

ethiopian sugar corporation

wonji shewa sugar factory