Pakistani company looking to invest in sugar production
Shakeel & Company, a Pakistan-based company is looking to invest in sugar production in Ethiopia, The Reporter has learnt.
According to the company, Shakeel, which was established in 2004, is mainly involved in manufacturing and export of agricultural products such as wheat and maize.
Last year, Shakeel, has reported an average export worth USD 22.5 million, reads its profile e-mailed to The Reporter.
However, The Reporter was unable to independently verify the above figure taken from Shakeel’s income statement and balance sheet.
As far as its investment interest in Ethiopia is concerned, Shakeel is looking to invest a sum of USD 150 million in sugar development. This money will be invested to develop and expand Kessem Sugar Factory in a joint venture with the Ethiopian Sugar Corporation.
In this respect, the Company has already expressed its interest to the Corporation, on January 29, 2018.
“We have received interest to invest in Kessem Sugar Factory along with their profile,” Gashaw Aychiluhim, communication director of the Corporation told The Reporter.
Established three years ago, Kessem Sugar Factory is estimated to produce 4,000 quintals of sugar per day. Its installed production capacity is around 6,000 quintals per day. It was built by a company from China, COMPLANT.
The gap between the actual and installed production capacity, is attributed to a shortage of sugarcane. This again, delays the development of a nearby irrigation project which was meant to feed the factory. So far, the factory’s supply of sugarcane comes from growers.
A concerned department within the Corporation is reviewing the company’s interest, said Gashaw. If the Corporation is convinced with the offer from Shakeel is feasible, we will definitely look for their partnership.
If the two parties agree, the first step will be a signing of Memorandum of Understanding and finally a joint venture contract.
Currently, Ethiopian Sugar Corporation manages around seven sugar factories. Over the years, this Corporation was under public scrutiny for its failure to satisfy the local demand despite huge sums being invested from public coffers.
Some of the projects such as Omo Kuraz were victims of mass corruption involving officials, brokers and businessmen which saw millions of funds allocated for the project, wasted.
Despite overambitious plans by Ethiopian government to develop 10 sugar factories a couple of years back, still the local demand is not met. The government has recently been engaged in the importation of sugar to fill the gap.