The Tigray Chamber of Commerce & Sectoral Associations has started mobilising investors to take part in the bidding process for the privatisation of Welkait Sugar Plant.

The sugar plant is one of the 13 sugar factories the Ministry of Finance is working to privatise. Of the factories, 10 of them, including Welkait, located 1,030Km from Addis Abeba in Tigray Regional State, are prioritised. The plant, which is expected to crush 24,000tn of sugarcane a day, is among the state-owned enterprises the then-EPRDF decided a year and a half ago to be fully or partially privatised.

A year ago, the Ministry issued a Request for Information (RFI) for the sugar companies, and 10 local and international companies have expressed interest in participating in the privatisation process of the sugar estates. Based on the RFI, the Ministry and Public Enterprises Holding & Administration Agency are preparing to float a tender.

Following the government's decision to privatise the company, the regional chamber has coordinated all sectoral associations at the weredaand town level to mobilise potential investors to raise equity to buy the plant, according to Berhe Arkebe, secretary of Meqelle Chamber of Commerce & Sectoral Associations .

“Sugar factories are very lucrative in Ethiopia," said Berhe. "There is also huge demand and consumption in Sudan and Eritrea."

The state-owned sugar factories produced four million quintals of sugar in the last fiscal year, while the demand was 7.2 million quintals. To fill the gap, the country imported 4.1 million quintals of sugar.

By the end of the current fiscal year, the government intended to increase sugar production to 4.9 million tonnes and generate 586.2 million dollars from the export.

The motive of the chamber is to run a sugar plant that is owned and operated by locals, according to Haftay Hagos, secretary of Tigray Chamber of Commerce & Sectoral Association, which is counselling and facilitating the process.

"Thus, we're creating a shared understanding within the business community and organising potential shareholders to raise equity to buy the sugar plant,” said Haftay.

Before deciding to take part in a bidding process, the Association has commissioned a study to assess the feasibility of the plan, profitability and total assets of the factory. The assessment also includes identifying which ownership arrangement is feasible. Share company, joint venture and private limited company (Plc) are the three ownership forms the Association is considering.