Ethiopian sugar corporation facts – December 2013


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Ethiopian Sugar Corporation Facts – December 2013

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Ethiopian sugar corporation facts – December 2013

  1. 1. It was at Wonji in 1951 some 120 km. east of the capital Addis Ababa modern sugar industry started in Ethiopia as a share company established by foreign investors & Ethiopian government. Then followed Shoa Sugar Factory in 1962 and Metahara in 1969. istered under the ownership of the government and started 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. Five years later, in 1974, following the dawn fall of the emperor regime, all sugar factories were made to be admin- Later in 1992 when the corporation was dissolved by stature; all the factories were reestablished as separate public 1 • || ተወዳዳሪ የስኳር ኢንዱስትሪ መገንባት! || Building Competitive Sugar industry! Ethiopian Sugar Industry Profile The nation’s first & oldest sugar factory -Wonji Sugar Factory enterprises. Then 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. try. 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. Fincha Sugar Factory, found 300 Km to the west of the capital started its regular sugar production in 1998. The present “ Sugar Corporation” with a vision of developing 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. In 2006 Tendaho Sugar Development Project is established as a fourth sugar development project in the coun- 2
  2. 2. • || ተወዳዳሪ የስኳር ኢንዱስትሪ መገንባት! || Building Competitive Sugar industry! Sugar Corporation Purposes of Establishment hh To grow sugarcane and other sugar hh In cooperation with the relevant organs yielding crops; undertake studies and research in the hh To process and produce sugar, sugar field of sugar cane plantation and sugar products, sugar by-products and prodproduction technologies and implement ucts of sugar by- products; useful results thereof; hh To sell its products and by-products in hh In cooperation with capable domestic the domestic and export markets; enterprises, to cause the designing and hh To cause the undertaking of feasibility fabrication of machineries and spare studies, design preparation, technology parts required by public sugar factories; selection and negotiation, erection and hh To posses, in accordance with the law, commissioning of new sugar developand develop lands required for its operament and expansion projects; tions; 3 hh To encourage and support sugar cane growers who are supplying their cane products to public sugar factories; hh To cooperate with the concerned educational institutions in producing the required type, number and quality of trained manpower for the sugar industry; hh 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; hh 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 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. 4
  3. 3. Mission: Core Values ÒÒ To create a sustainable competitive sugar industry œœ Create an institution that plays a major role in the national endeavor to realize social, political & economic transformation that ensures rapid , sustainable and equitable growth; œœ Create a result oriented leadership and workforce with a development mind-set, ethics and skill; œœ Satisfy the national sugar demand; œœ To seize a remarkable export share in the international market; œœ Support the national energy supply through the use of bi-products of sugar; œœ Create a wide job opportunity to citizens; œœ Support and facilitate cultural, social and economic transformation around sugar development areas; œœ To bring about technology transfer in sugar development sector; œœ Enhance the industry’s competitiveness through intercropping; œœ Create institutional competence capable of attaining the strategic goals of the sugar industry; œœ Create compatible social and economic interlink among the public. hh Establish a result- oriented and cost effective attitude and system; hh Sustainable change and competitiveness; hh Establish good governance; hh Virtuous work ethics; hh Cooperate with the people and ensure their benefit. 5 tt Satisfy the national demand of sugar; tt Support the national energy supply system, through cogeneration and use it for key economic sectors; tt Maximize the contribution of the sector to the national economic growth and create job opportunities for citizens; Objectives • Produce 2.25 million tons of sugar and 181,604 meter cube ethanol by the end of the GTP period ; • Contribute 101 Mega Watt electric power to the national grid by the end of the GTP period; • Finalize expansion projects of the existing (Wonj/ shoa, Methera and Fincha) sugar factories as well as construction of the new one at Tendaho; • Build additional ten new sugar factories with a capacity that ranges from 12 to 24 thousand TCD a day & cultivate sugarcane plantation at 320,000 hectares of sugar cane plantation; • Export 1,246,000 tons of sugar by the end of the GTP period out of which half in raw sugar while the rest half is white ; • Substitute up to 137,464 meter cube imported ker- tt Hold an elevated export share in the international market; tt Create institutional capacity with the appropriate human resource and potential for research & technology which help realize the strategic objectives of the sector. • • • • • • • • osene and utilize for cooking and other purposes; Produce up to 44,340 meter cube ethanol for blending purposes by the end of the GTP period; Spread six high yield cane varieties developed through research; Establish a well equipped sugar cane breeding station; Complete the construction of four tissue culture laboratories and green house; Enhance the productivity of cane from 145 to 155 tons per hectare; Provide knowledge and skill upgrading training for 21,500 employees at different levels; Create direct job opportunities to more than 200,000 citizens through agriculture, factory, house and irrigation projects; Construct the corporation’s head quarters and research & training institutions. 6 • || ተወዳዳሪ የስኳር ኢንዱስትሪ መገንባት! || Building Competitive Sugar industry! Vision : Goals Vision, Mission & Values
  4. 4. T 16,000 hectares of sugarcane plantation field. And, the entire factory’s sugarcane field cultivated with the agricultural expansion project is owned by out grower farmers of the surrounding area. 1.Wonji Shoa Sugar Facory he factory is found in Oromiya Regional State near Adama Town at 108 Kilo Meters from Addis Ababa. Constructed 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 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 75,000 tons 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. out both in the cane cultivation field and the factory since three years back. 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 220,000 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 22 In a bid to replace these two oldest factories with a new mega watt electric powers to the national grid in addiand modern one, an expansion project had been carried tion to satisfying its own demand. 7 The newly built Wonji Shoa Sugar Factory 8 • || • ተወዳዳሪ የስኳር ኢንዱስትሪ መገንባት! || Building Competitive Sugar industry! Expansion Projects of Existing Sugar Factories 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
  5. 5. 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 Holland. The factory was constructed in 1970 and had started sugar production by the same year. Formed as Share Company between Ethiopian government and the constructing company, it was the third sugar mill to the nation. It has 10,235 hectares of land covered with sugarcane. Until 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 2011. Currently the factory’s ethanol plant has a capacity of producing 12,500 Meter Cube ethanol per year. 3.Fincha Sugar Factory The factory is found in Oromiya Regional State in Horro Guduru 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. Till July, 2013, the average annual production capacity of Fincha Sugar Factory was 110,000 tons of sugar while it had the capacity of producing 8,000 meter cube ethanol. It had been working with 5,000 TCD. Until December, 2011. It had been the only factory in the country that produces ethanol. pansion project has been carried out around the areas known as East Bank & Neshie located on the eastern side of Fincha River and also on the idle areas found on the western side of the river. The factory, therefore, in the end 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 17,000 hectares till the end of 2013. 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. Factory’s ethanol plant constructed through expansion 9 To acquire and cultivate cane cultivation field capable enough to feed the expanded plant with more than double crushing capacity, the factory’s agricultural ex- Fincha Sugar Factory after the expantion 10 • || • ተወዳዳሪ የስኳር ኢንዱስትሪ መገንባት! || Building Competitive Sugar industry! 2. Metahara Sugar Factory
  6. 6. S ugar Corporation is working vigorously to raise the current capacity of sugar production in the country which is around 300,000 tons that is mainly produced by the existing three sugar factories, to 2.25 million tons per year within the five year growth & transformation plan period. Furthermore, this effort of the corporation will also uplift the 8 million liter ethanol production capacity of the country till 2010 to 181, 604,000 liter, and will replace the 137,464 meter cube kerosene imported from abroad. The effort will also enable the country to produce 44,340 meter cube ethanol for blending to minimize the foreign currency the country spends on oil import. Furthermore all existing and new sugar plants, satisfying their own power demand, will contribute 101 mega watt electric power produced through co-generation to the national grid. the areas suitable for sugar cane production. Based on the above survey the corporation has planned to build ten sugar factories within five years while bringing the construction of the first phase of Tendaho Sugar Factory into its completion is another task set to attain too. The areas identified & the numbers of sugar factories to be constructed on each of these areas are mentioned as follows:- According to the survey conducted at a national level on 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 Be- • Kessem Sugar Development les River, areas of south-west of Lake Project will have one sugar facTana called Upper Dinder , areas tory with a capacity of 10,000 along Tekezzie River & its tributaries TCD on 20,000 hectares of cane around Welkaiyt & Humerra , valleys cultivation field; of Anger River – Negiesso, central • Tendaho Sugar Development Genallie River and Barro-Gillo rivProject will have one huge sugar ers of Gambella are among some of factory with a capacity of 26,000 11 TCD and with total area of 50,000 hectares of sugarcane plantation land; • Kuraz Sugar Development Project will have five sugar factories among these two will have 24,000 TCD each and three each will have 12,000 TCD and altogether occupy a total area of 175,000 hectares of sugarcane plantation field; • Welkaiyt Sugar Development Project will have one sugar factory with a capacity of 24,000 TCD & will have 50,000 hectares of sugarcane plantation; • Tana-Beles Sugar Development Project will have three sugar factories each with a capacity of 12,000 TCD and with total area of 75,000 hectares of sugarcane plantation field. The project is found at Zone Five in Fentallie and Dulecha Woredas of Afar Regional State, 50 kilo meters from Metehara Sugar Factory. It is a project which will have a total of 20,000 hectares of land to be cultivated & its plantation stretches to the areas known as Kessem and Bolhomon. part will stretch & cover 19,900 hectares of land. It 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 ethaEarlier the Kessem project was nol at the start and when it reaches part of the expansion project of its maximum crushing capacity it Metehara Sugar Factory. It was will produce 260,000 tons of sugafter the establishment of Sugar ar and 30,000 meter cube ethanol Corporation the project was made a year. Moreover, the factory out to proceed as an independent of the total 26 mega watt electric entity. power it produces, will contribute 15 mega watts to the national By the end of the five year plan, grid. its canal & road development 12 • || • ተወዳዳሪ የስኳር ኢንዱስትሪ መገንባት! || Building Competitive Sugar industry! Sugar Development Projects 1.Kessem Sugar Development Project
  7. 7. It is found in Afar Regional State in Millie, Doubti, Assaeitta and Affambo Woredas at a distance of 677 k.m. from Addis Ababa. The project is started in 2006 with 50,000 hectares of land to be cultivated and a two-phased factory construction with a 26,000 TCD with its full capacity. The first phase of the factory with 13,000 TCD is expected to start production sugar at the earliest months of 2014. Upon coming to its maximum crushing capacity the factory will be able to produce more than 619,000 tons of sugar and 55,000 meter cube ethanol annually. tivated by out growers. The cane cultivation field will get its water supply from Tendaho Dam that has a capacity of holding more than 1.8 billion cubic meter water. It is the biggest plant in the country and it will take the lion’s share of the total amount of sugar production in the very near future while it will contribute 90 Mega Watt electric power to the national grid by the end of the GTP period. The total amount that will be produced by the factory is 120 mega watt electric powers and out of this it consumes 30 mega watt for its own regular operation. FurtherOut of the total hectares of the farm land, the pro- more, up on completion and reaching its maximum ject occupies 25,000 hectares sugarcane plantation production capacity the project is expected to crefield while the rest 25,000 hectares are to be cul- ate job opportunities for around 50,000 citizens. 13 • || • ተወዳዳሪ የስኳር ኢንዱስትሪ መገንባት! || Building Competitive Sugar industry! 2. Tendaho Sugar Development Project The last picture the factory will have 14
  8. 8. || • ተወዳዳሪ የስኳር ኢንዱስትሪ መገንባት! || Building Competitive Sugar industry! 3. Kuraz Sugar Development Project It 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 & Peoples Region. It is a huge project where five sugar factories will be built. 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. 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 The project will have a total area out of the 415 mega watt electric of 175,000 hectares of land for its power which they are expected to sugarcane cultivation. This wide produce through cogeneration will area of cultivation field will get its contribute 275 mega watts to the water supply from the Omo River nation’s electric grid. through a diversion weir with 381 meter width & 22.4 meter height. 4. Wolkaiyt Sugar Development Project This is the other sugar development project located at 1,200 kilo meters from Addis Ababa at the Western Zone in Wolkaiyt Woreda of Tigray Regional State. There will be one sugar factory with 24,000 TCD and when it reaches its maximum production capacity, it would be capable of producing 484,000 tons of sugar and 41,654 meter cube ethanol. 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 a dam named “May-Day” is under construction. The dam which is under construction by a local construction company – Sur Construction, will have 840 meter width and 135.5 meters height. When completed, May-Day Dam will have a capacity of containing 3,497,000,000 meter cube water. May-Day Dam under construction 15 16
  9. 9. It is a project found at western Ethiopia in Oromiya Regional State in East Wollega and Eilu Ababora Zones in the Didiessa Rift Valley at a distance of 540 kilo meter from the capital through the route from Addis Ababa-JimmaBeddelie-Nekemet Road. The project had been owned by a Pakistan company called Al-Habasha P.L.C. which had been unable to run the business. Therefore, the company was transferred to the ownership of the Ethiopian government and was made to operate as a property of Sugar Corporation as of August, 2012. When it was transferred to the corporation, over 90% of the construction of the plant was completed. The factory , at the start will have a capacity of crushing 8,000 tons of cane a day which with further expansion will reach to 12,000 TCD factory. To accomplish these targets, the corporation is working hand-in-glove with the federal and regional government institutions responsible for constructing roads, electric power generation, water supply, telephone networking & housing facilities. Both residential & non residential houses in and around the new sugar factories are made fully from the product of agro stone which is more economical either in terms of money or time. This effort of the corporation, to work in collaboration with the Ministry of Urban Development & Construction and its consulting agency, has greatly saved huge amount of money and time wastage. The ten new sugar factories, to be constructed within the GTP period are expected to create direct and indirect job opportunities to more than 500,000 citizens in various fields of work. Current Sugar Distribution System 6.Belles Sugar Development Project It is a project found in Amahara Regional State at 576 kilo meter distance from Addis Ababa where three sugar factories are under construction and some parts of its cane plantation field found in Benishangul Gumuz Regional State. It is a project with a total area of 75,000 hectares for 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. 17 Currently the task of distributing sugar all over the country is managed by quota system made by Ministry of Trade and Sugar Corporation. And, the distribution system has three features:1. Sugar Distribution in Addis Ababa • Distribution in Addis Ababa is based on a quota made by Addis Ababa Trade and Industry Bureau to be distributed through retail traders and Consumers’ Associations’ Shops. And other service providers get from Ethiopian Fruit and Vegetable Share Company (ETFRUIT). 2. Sugar Distribution in Regions • Distribution 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 & industry bureaus distribute sugar to consumers. 3.Sugar Distribution to Industries • Industries that use sugar as an input to their production get sugar directly from Sugar Corporation according to a quota made by Ministry of Trade and Sugar Corporation. * It is from the corporation’s warehouses that all involved in the business of distributing sugar collect the sugar supply. 18 • || • ተወዳዳሪ የስኳር ኢንዱስትሪ መገንባት! || Building Competitive Sugar industry! 5. Arjo Didiessa Sugar Development Project
  10. 10. Sugar Corporation is established on October 2010 by the Council of Ministers Regulation No. 192/2010 and is led by a director general. Accordingly, the corporation is entitled to administer the existing sugar factories, the ongoing as well as new sugar development projects. And, following a recent study of BPR it is organized as follows:Divisions, Duties & Responsibilities: 1. Office of Director General Carrying out a follow up and application of special assignments singled out by the director general of the corporation; planning ,coordinating and conducting meetings of management; carrying 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 environmental protection activities; 3. Operation Division Carrying out a follow-up, support & supervision on agriculture and factory operation activities both on the existing and new sugar factories; 4. Public Organization Division Organizing and coordinating out growers and small scale enterprises & carrying out follow up activities; managing compensation, rehabilitation and land distribution programs; 5. Marketing Division Managing and carrying out market research & promotion on sugar and by-products of sugar; directing & running domestic sugar distribution activities and managing foreign marketing & logistic activities; 6. Research & Training Division Managing & conducting research on sugarcane; running research activities to develop sugarcane verities and on sugar technology and also managing & conducting training; 19 7. Plan & Project Division Preparing corporate policies & strategic plans; managing operational plans, monitoring and supervision activities; monitoring and evaluating project plans and studies; 8. Human Resource Management & Development Division Carrying out human resource management activities; strengthening employee-industry relationship; designing and managing a system that helps human resource development; 9.Finance Division Managing financial and related activities; carrying out financial supervision; performing fund administration and treasury management tasks; 10.Plantation & Factory Construction Division Managing and carrying out sugarcane plantation development and factory plant construction activities; 11.Corporate Kaizen & Change Management Division Design and manage transformation and change management activities; implement and supervise activities of kaizen; 12.Purchasing & Property Administration Division Carrying out and managing procurement, property and facility administration activities. Address Communication Directorate Director – Ato Zemedkun Teklie Tel: +251 (0) 11 552 74 75 Mob: +251 (0) 913 53 96 94 || 20 • || • ተወዳዳሪ የስኳር ኢንዱስትሪ መገንባት! || Building Competitive Sugar industry! Structure of Sugar Corporation
  11. 11. 21 22 ተወዳዳሪ የስኳር ኢንዱስትሪ መገንባት! || Building Competitive Sugar industry!