Ethio - Sugar prospects to engage in four types of sectors
- Agriculture
- Plant
- Animals
- Manufacturing Industries
- Service Industries
- Trade
Agriculture
Plants:
- Sugar Cane & cotton
- Vegetables(tomato, potato, pepper, onion)
- Fruits (Avocado, Mango, Grapes, Lemon & Banana)
- Forestry (Eucalyptus and Goat fodder)
- Grass (Animal fodder), Teff, Wheat, Maize
Animals:
- Dairy Farm
- Fattening
- Poultry
- Goat
- Fish
Service Industry
- Agro and Eco tourism
- Fruit garden picking
- Lodge
- Water park
- Tour and travel,
- Summer-park and camping service
- Cultural shows on open air theater and museum(Cattle jumping… Evangadi etc.)
- Cultural musical and dancing show
- Playground, children court (football, volley ball…)
- Swimming pool, Gym and Spa
- Fishing and Hunting
- Horse ridding
- Camp - Fire
- Bike riding
- Air flight service
- Food Court
- Supper market
- Gas Stations on Karo-Addis Route
- Fuel dispenser
- Pension
- Shop(mini market)
- Warehouse
- Car parking
- Camping service
- Coffee house
College
- ICT College with Park
- Agriculture college
- Tourism and hospitality college
- Boarding School
Manufacturing Industries
- Sugar Industry
- Particle/ chipboard Factory
- Slaughtering / Meat Processing
- Sausage factory
- Milk processing and Juicer factory
- Animal Feed processing
- Small Scale Packaging Industry
- Mineral water packaging
- Manufacturing Workshops
- Cold chain/ cold room
- Mining
Trade
- Import
- Sugar
- Industrial Inputs
- Machineries
- Export
- Sugar, Coffee
- Fruits, Vegetables
- Oil Seeds
- Meat& animal fodder
- Retail &whole sale locally
- Sugar Repacked
- Animal byproducts
- Products from own farm or industry
Additional project areas under progress - Phase I
- Arbaminch on 2 Ha
- Konso 4 Ha
- Jinka 2 Ha
- Dimeka 10 Ha
- Turmi 20 Ha
- Dasenech 20Ha
- kangaton 20Ha
- Humbo on 2 Ha
- Wolytasodo 1 Ha
Additional project areas under progress - Phase II
- Boditi 2 Ha
- Durame 1Ha
- Shone 1 Ha
- Halaba 2 Ha
- Werabe 2 Ha
- Hossana 2Ha
- Butajira 2Ha
- Shashemene 1 Ha
- Hawassa 1Ha
Facilities of the Project
- Modern guest houses and laundry
- Well - furnished 54 expert houses
- Modern cafeteria and entertainment halls
- Many regular workers’ houses
- Big stores and garage
- Huge tanker with a capacity of 800,000 liters
- Petrol station with a capacity of 50,000 liters
- Clinic
National Significance of the project
- profit Generation,
- Tax Revenue,
- Employment and Income Generation/ Center of Excellence in industrialization in Ethiopia.
- Social and Environmental impact,
- National peace and political benefits
In the project life under consideration, the government will earn income from corporate tax payment, dividend tax, salary income tax, sales tax and VAT. This creates additional fund for theregional and federal government that will be used in expanding social and other basic services in the country.
Ethio Sugar’s expectation from Foreign Business Partner:
- Availing Equity Finance (Hard Currency),
- World Class Technology to be considered as knowledge transferred, and
- Best Management System that could ensure effectiveness at the same time efficiency.
Capital of the company
|
Number of shares |
Per value per share |
Amount in Birr |
Issued Capital |
3,007,200 |
1000 |
3,000,072,000.00 |
Subscribed Capital by Founders |
1,072 |
1000 |
1,072,000.00 |
Subscribed Capital by Others |
1,600,000 |
1000 |
1,600,000,000.00 |
Paid-Up Capital |
- |
|
|
Balance to be offered for subscription |
1,399,000 |
1000 |
1,399,000,000.00 |
Public offer
2,999,000 ordinary shares at par value of birr 1,000.00 with total value of birr 2,999,000,000 have been offered to public pursuant to articles of Association article 5 sub article 5.1 apart from par value of shares, 8% service charge shall be levied on the subscribed amount to cover administrative expenses.
Investment Structure:
The total Capital Expected to raise is 10Billion Eth Birr. It is planned to bring-in foreign shareholders with the necessary skill and experience in managing sugar estates to take the major stake in the partnership. It is planned to have the following share distribution among the shareholders that will establish the share company:
Partners |
% share |
Local companies and individuals |
30% |
Foreign companies |
39% |
Government |
21% |
Affiliated companies |
10% |
Profitability:
The project is found to be financially viable and there is a high demand for sugar both in in local markets and exports. Such result induces the project promoters to reinvest the profit which, therefore, increases the investment magnitude in the region.
The actual information on the profitability of the project can be obtained once the capital cost of property transfer is known. However, estimated production cost and annual revenue structure shown in this study (excluding the financial and depreciation cost) indicates that the venture does generate profit from the first year of operation. However, if financial depreciation costs are considered the first year of operation may result in loss. The loss during the first year of operation is due to the fact that the project will have high financial cost burden because of the loan obtained while the attained capacity utilization is at its lowest (about 35%).
Depreciation is not an actual cost of operation; it is a way of spreading initial investment costs on fixed asset over the accounting life of the asset. Accordingly, if depreciation is excluded from the cost structure even in the first year of operation the venture would generate net profit. Nevertheless, beginning from second year and throughout the remaining years of operation the project registers net profit.