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Ethiopia’s eight state-owned sugar factories are slated for privatization. The cement giant Dangote and Coca-Cola are the top bidders interested in these sugar factories. After the Ministry of Finance and Ethiopian Investment Holding (EIH) announced the tender for the sugar factories in August 2022, around 20 local and international corporations expressed initial interest.
Ethiopia’s eight state-owned sugar factories are slated for privatization. The cement giant Dangote and Coca-Cola are the top bidders interested in these sugar factories. After the Ministry of Finance and Ethiopian Investment Holding (EIH) announced the tender for the sugar factories in August 2022, around 20 local and international corporations expressed initial interest.
Nearly half of the companies keen to enter the sugar business by acquiring the state assets were local. Earlier this week, the Ministry together with the EIH, made an official request for the interested companies to submit their proposals for the privatization of the companies. Labelled a “critical milestone” in the government’s project of privatizing the sector, the Ministry and EIH issued the Request for Proposal (RFP) beginning May 23, 2023. The eight factories up for privatization are Arjo Dedessa, Kessem, Omo Kuraz 1, Omo Kuraz 2, Omo Kuraz 3, Omo Kuraz 5, Tana Beles, and Tendaho.
While presenting his Ministry’s nine-month performance for the current fiscal year, Minister Ahmed Shide told Members of Parliament (MPs) last week that his office has been preparing to transfer ownership of the eight selected sugar factories to private investors. The government has already made huge investments in the sugar factories. It is believed that the business would be more efficient in the private sector given the current macroeconomic situation of the country, stated the minister. He expressed hopes that once in private hands, the industry would operate with peak agility and precision, leveraging corporations’ vast corporate know-how and financial muscle to upgrade and expand sugar operations.
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Hinjat Shamil, senior economic reform advisor at the Ministry says various investors have approached the Ministry, indicating the number of companies that formally registered preliminary interest don’t represent all interested firms. Management at one of the companies vying for one of the factories said that the factories are “extremely overvalued,” potentially reducing firms’ appetite for the bids.
