Govt to Set up Firm with task of Managing 5 Sugar Factories

ADDIS ABABA – The Council of Ministers has approved a bundle of bills that paves a way for the establishment of an umbrella entity to run five state-owned sugar factories in Ethiopia.

The draft regulations were among the the main items that the council deliberated on during its fifth regular session on Saturday, according to the Office of the Prime Minister Abiy Ahmed.

The soon to be established entity is named as Ethiopian Sugar Industry Group (ESIG), and will be tasked to manage Wonji/Shoa, Metehara, Fincha, Kesem and Beles sugar factories.

The factories are among a dozen of mega sugar production projects currently run by the Ethiopian Sugar Corporation (ESC), a public enterprise established in 2010 to develop mega sugar estates.

“For years, the Corporation has been managing sugar development projects and factories with several complicated problems alone,” said the PM Office.

“This has caused the enterprise to lose its focus and capacity to realize its main mission,” said the office, adding that the latest move, among other things, is aimed at “reducing some of the major responsibilities” from the Corporation.

On Saturday, the council discussed and approved six draft regulations that pave a way for the establishment of the Ethiopian Sugar Industry Group and give legal status to each of the five factories.

The regulations will be implemented soon after their publication in the Negarit gazette, an official federal government law Gazette.

The ESIG will take over the administration role of the five factories with their respective stakes intact from the corporation until their transfer to the private sector, according to the PM office.

The government aspires to privatize the industry in a step by step basis.

The process to privatize nine state-run sugar factories and projects is currently ongoing with the Public Enterprise Holding & Administration Agency handling the activities.

In June last year, the agency hired a Nairobi-based Ernst & Young Global Ltd as a consultant to advise on its initial plan to privatize nine out of the 13 state-owned sugar factories. Welkayit, Tendaho, Kesem, Omo Kuraz I, II and III, Arjo-Dedesa, and Tana-Belese I and II are the sugar estates slated for privatization.