Sugar development has great impact on the economic development of a nation as it is dail consumed. According to the recent International Sugar Association’s report, the annual world sugar consumption level is estimated to around 59 million tons. Therefore, the sugar market has large number of consumers. In the same way, the EthioSugar Manufacturing Industry Share Company President Engineer Lemma Gurmu says that Ethiopia’s annual sugar consumption is would grow from 9 million quintals at this point of time and believed to be grown to 17 million quintals in 2025.
And the annual average sugar consumption per person in Ethiopia is 8 kilograms due to the shortage of supply. But this is estimated to be projected to 21 kilo gram per individual in 2035 followed by achieving the international sugar consumption level through increasing the production and supply of the product through time. For him, Ethiopia is highly committed to balance the supply and demand of sugar through privatizing sugar factories for quality and efficient products.
To be competitive in sugar production, it is expected to produce and sell with less cost. In order to ensure this, the government of Ethiopia led by Prime Minister Dr.Abiy Ahmed, has decided to privatize and has taken encouraging measures on the sugar sector. The shares of the first two old public owned factories, Metahara and Wonji, are being sold since November 2018. The first modern Sugar factory construction in Ethiopia began in 1951 at Wonji town which is on 110 kilometers from the capital Addis Ababa. It started production in 1954 by the initial production capacity of 140 tons per day.
The second factory, Metehara Sugar Factory was established as a share company by Netherlands Company and the then Ethiopian government in 1965 and began production in 1969 at Merti town located on about 200 kilometers from Addis Ababa. It has the total of 10,235 hectares of sugarcane growing land. It also has the capacity of producing more than 130 thousand tons of sugar. From privatizing these two aged sugar factories, Engineer Lemma adds that the company is expecting to have the total of 60,000 peoples in as the two industries share holders both to work and earn benefits collaboratively.
The plan is not displacing the native dwellers of the industrial areas but including them as the owners through the shares they buy. From the total planned share holders, 40,000 will be the local farmers and dwellers of East Shoa and Arsi, while the remaining 20,000 share would be for Ethiopian investors, business men and Diaspora. They are given the partaking opportunity both boost the nation’s economic development and benefit themselves. When the factories fully start producing sugar, the export-import related affairs would be balanced; and the sugar shortage would be diminished.
And, according to the company’s plan, by augmenting the sugar cane plantation, it would produce 160 tons of sugar on a hectare of land to get in turn 172 thousand tons of sugar in a year. By the same token, Company General Manager Bitew Alemu told that the company has been selling shares of the two factories officially since November 2018 to use the production capacities of the factories to enhance profitability and implementing technology. To this end, it has sold shares and collected about 800 million Birr from the required 3 billion Birr to fully run the factories.
In privatization, business companies and individual investors need to trust the government and buy shares. That is why the EthioSugar Manufacturing Industry Share Company has made agreements with HVA Holland, Awash Bank, Nib Bank and Oromia Cooperative Bank to work collaboratively on technology and foreign currency facilitation. Commercial sectors have to assist in modernizing old public owned important sectors and create job opportunities for the young generation.
The Ethiopian Herald May 24/2019
BY MISGANAW ASNAKE
