Polish sugar company eyes Ethiopia for expansion


Ethiopian sugar professionals will soon share technological skills they have learned from the biggest Polish manufacturer of the product.

The Polish Sugar company Polski Cukier dominates the supply of sugar in the central European country and has signed a memorandum of understanding (MoU) with the Ethiopian Sugar Corporation (ESC).
Officials of the Polish sugar giant told journalists, who came from Ethiopia and Tanzania that the sugar factory has a goal of expanding its relationship with African producers in hopes of increasing its market share.
The plan for ESC involve working on building up their technical capacity.
“In addition to this we hope to do even more with ESC in the future,” Rafal Mozdzen, Lead Specialist of Strategy and Business Development Department said.
The sugar company was established 12 years ago when several smaller sugar companies merged. Currently it has a production capacity 700,000 tons of sugar per year and it has 39 percent of the market share in Poland, where it competes with three other sugar suppliers, which are based in Germany.
The Polish state treasury owns 80 percent of the company and the balance is controlled by farmers and sugar beet plantation owners. According to the officials the company will eventually be fully privatized.
There are 1,600 employees at the plant that rely on sugar beets supplied by 60,000 farmers. The company does not have its own farm, and instead uses independent farmers to grow its product.
Currently, the company owns seven factories established throughout Poland. In the past fiscal year the company’s turnover was 500 million euro and their net profits were 150 million euro in the same year.
The company has a 4.1 percent market share in Europe. According to the officials, the quota for market share without competition given by the European Union ends in 2017, and as a result the competition will be very high to capture the market. To meet the competition the company is now assessing options on the African continent to expand its capacity.
“We want to develop and maintain the market position in Europe and experience cooperation in Africa,” Rafal explained.
The current MoU with the Ethiopian Sugar Corporation is considered to be a gate way to the continent. “We know that Ethiopia is undertaking the construction of several sugar factories and this means a good opportunity to work together with Ethiopia to expand our exports to Europe,” he said.
“We can also work together to improve the production line in Ethiopia,” the company official said.
“We have made several reference visits to Ethiopia. By exchanging staff they can gain technical knowledge so that is part of the MoU” Rafal added.
In the near future Ethiopians who work with the technical aspects of the sugar factory will visit Poland and in return their Polish counterparts will visit Ethiopia.
“Our specialists can support and assist Ethiopians to increase the effectiveness of sugar production and its quality while at the same time protecting the environment,” he added.
“We also are looking forward to a long term partnership even though exactly how that will play itself out is yet to be determined”, he further noted.
Currently, Ethiopia is undertaking the construction of ten new sugar factories which are expected to increase sugar production capacity by ten-fold when completed.
Representatives of the Polish sugar company will be part of the business delegation accompanying the newly elected Polish PM, who will visit Ethiopia and Tanzania in the near future.