| Amongst a number of developmental initiatives launched by the government to improve the living standard of the population and develop the economy at large figures the sugar industry.
Presently, the contribution of the sector to the GDP is relatively minimal while the volume of production is significantly below the local demand even though the commodity is being exported. But given the country’s abundant water resources, coupled with a vast fertile land favorable for the plantation of sugarcane - the major plant the country produces sugar from - the country has a potential to become one of the world’s major sugar producers. In fact, efforts are already under way to boost the sector and realize that vision, the result of which is expected to be revealed within the coming two years.
The development of the sugar industry includes the expansion of three of the existing sugar factories - Fincha, Wonji and Metahara sugar factories - and the development of a new sugar factory in Tendaho, which will have an annual production capacity of six million quintals per annum. The production capacity of the new factory will make it one of the biggest sugar factories around the globe, Trade and Industry Minister Girma Biru told The Reporter. “There are only a few sugar factories which have such a big production capacity. The new factory will significantly raise the country’s sugar production capacity.”
Along with what will become the country’s biggest sugar factory is a 1.8 billion cubic meter dam, whose construction has already been completed. The dam will, starting from the coming winter, be ready for use to irrigate vast sugarcane plantations on a fertile land covering 28 villages. The plantations will provide job opportunities for 35 to 40 thousand farmers living around the localities, according to Girma. The sugarcane growing on this area will be used to produce sugar in what will become the country’s biggest sugar factory.
Fincha Sugar Factory will enjoy the biggest expansion projects among the existing sugar factories, where, upon completion, its production capacity will increase threefold to 2.7 million quintals. Currently the factory produces 850,000 to 900,000 quintals of sugar per annum.
The sugar industry development project is not of course only about the expansion or erection of factories. It includes the construction of dams and canals as well as sugarcane plantation in vast, fertile lands, among others.
The dam, which will be used to irrigate the Tendaho sugarcane plantations, is already completed and ready for use. Sugarcane plantations for Fincha Sugar Factory will use the nearby Amerti Nashi hydroelectric dam for irrigation. Like the Tendaho project, the Fincha Sugar Factory expansion development includes plantation of sugarcane on fertile lands stretching across a number of village, which will in turn provide job opportunities for farmers living around. Similar projects will also take place for the expansion projects of the Wonji and Metahara sugar factories.
Being one of the government’s short term development strategies, the sugar industry development program is scheduled to be finalized in the coming two years.
Only last week, the government secured a soft loan amounting to 640 million USD from the government of India for the erection of a new sugar factory in Ethiopia and the expansion of the existing three. The construction of the new plant and the expansion projects are scheduled to be completed within 18 to 24 months.
Although a relatively huge soft loan and the largest single line of credit provided by the government of India to any nation so far, the 640 million USD secured for the sugar factories project is only 39 percent of the total fund required for the whole sugar industry development program. The overall project requires a sheer 15 billion birr. The balance is expected to be secured from emergency development funds, banks or other sources, according to the Trade and Industry minister.
Owing to its size, the sugar industry development program will devour a relatively huge sum of money given the country’s economy but the results expected from it seem more rewarding.
The overall objective of the development of the sugar industry is aimed at boosting the country’s sugar production five-hold within the coming two years. Presently, the volume of sugar production (about three million quintals) is less than the local demand. Come 2010, the production capacity is projected to hit 15 million quintals, which will not only exceed local demand, but also provide a substantial for export as well, there by generating additional foreign currency revenue.
Aside boosting the production capacity of the sector, the project will also play an important role in creating employment opportunities for more than 80,000 skilled, semi-skilled and unskilled laborers, generating about 100 MW electric power, and substituting up to 20 percent of gasoline import with fuel ethanol, according to Sofian Ahmed, Finance and Economic Development Minister. Upon completion the ongoing project, the sugar factories will be able to produce up to 243 million liters of ethanol, an alcohol which can be blended with benzene with a five percent proportion. (A car engine running on benzene can do the same with five percent ethanol blended benzene.)
If all goes according to plan, all this will come true just within two years and 2010 will turn out to be a milestone in Ethiopia’s sugar industry.
By Hayal Alemayehu | 
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