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By Jason McLure
Sept. 26 (Bloomberg) -- Ethiopia will spend $1.4 billion to increase sugar production fourfold within the next five years, said Belay Dechasa, director of the state-run Sugar Development Agency.
The Horn of Africa nation is building a $725 million sugar factory at Tendaho in eastern Ethiopia and will expand three existing plants, Dechasa said in an interview today in the capital, Addis Ababa. Production may increase to at least 1.3 million metric tons by 2012, from 280,000 tons.
``We intend to be the least-cost producer in the world market,'' he said, without elaborating.
Agriculture in Ethiopia, Africa's biggest coffee producer, accounts for 47 percent of the nation's economy, according to World Bank statistics. The country currently imports about 50,000 tons of sugar a year and exports 20,000 tons of the sweetener at a preferential price to the European Union under the Everything But Arms trade initiative.
The expansion project will be funded with a $640 million loan from India, with additional financing provided by the Ethiopian Treasury, a state-owned sugar development fund, the Ethiopian Development Bank and the Commercial Bank of Ethiopia.
The Tendaho plant in the Afar region, already under construction, will have the capacity to produce 600,000 tons of sugar annually, Dechasa said.
Output at the Wonji factory, 100 kilometers (62 miles) east of Addis Ababa, will be increased to 300,000 tons, from 75,000 tons, while production at the Methara plant in the central Oromia region, will double to 126,000 tons. The Finchaa factory, 350 kilometers west of the capital, will triple current output of 85,000 tons.
To contact the reporter on this story: Jason McLure in Addis Ababa via Johannesburg at
pmrichardson@bloomberg.net.
Last Updated: September 26, 2007 07:08