Indian firm to build sugar mill in Ethiopia

By Groum Abate, IANS,

Addis Ababa : An Indian company is planning to build a new sugar mill in Ethiopia, the east African nation that is attracting a lot of Indian investment and attention.

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Razia Agro Industry plans to set up the sugar mill in the East Wollega zone of the Oromia Regional State in Ethiopia. A company official told a local newspaper that the Indian firm has secured 4,000 hectares of land for the sugarcane plantation and the construction of the mill. “We have been cleaning the land and developing the farm,” the official said.

Razia Agro Industry has a registered capital of 131 million birr. A senior executive of the company said the group would start constructing the factory next year. The mill will have an installed capacity of producing 1,200 tonnes of sugar per day.

Already there are three state-owned factories: Wonji, Metehara and Finchaa. The government is also building the largest sugar mill in Ethiopia in Tendaho, in Afar state, at a cost of $725 million with a credit facility provided by the Indian government.

India has given a $640 million loan for the Tendaho sugar project.

The Ethiopian government hopes to boost sugar production to 2.5 million tonnes from the current 300,000 tonnes within five years.

Razia’s sister company, Sainik Potash, has been working on a potash development project in the Afar Regional State since 2007. Sainik Potash is a subsidiary of Sainik Coal, a giant coal manufacturing company in India. The investment group, Sainik, is planning to establish another new company which will be engaged in marble production in Ethiopia.

India is the leading private sector investor in Ethiopia with investments of $4.35 billion. Over 450 Indian companies are currently operating in Ethiopia.

Indian investors are now being engaged in various sectors, from flower market and agriculture sectors they have moved to manufacturing, agro processing, information technology (IT) and other sectors.

The Export-Import Bank of India (Exim Bank) has also entered into an agreement with Ethiopia for extending a $91 million line of credit to finance exports and consultancy services for development of the sugar industry.

(Groum Abate can be contacted at [email protected])