The Tana Beles Sugar Factory, located between Ethiopia’s Amhara and Benishangul-Gumuz regions, is undergoing a major restructuring following months of operational disruptions and workforce departures. Over the past two months, more than 75% of the factory’s employees have left, primarily due to unpaid wages. Many of these workers have since sought alternative employment elsewhere, while those who remained have awaited the gradual settlement of delayed salaries. In response to these challenges, a new board has been established, tasked with overseeing the factory’s recovery and ensuring that full-scale production resumes within a year.
Dr. Biruk Taye, CEO of Ethiopian Investment Holdings (EIH), which manages state-owned enterprises, confirmed that the newly appointed board has already started efforts to reclaim and cultivate 2,000 hectares of land by May–June 2025 (Ginbot 2017 E.C.) to sustain sugar production. Thus far, 450 hectares have been cultivated. According to Dr. Biruk, these measures are part of a structured plan aimed at stabilizing operations and restoring the factory’s functionality, despite delays in previous efforts to resume production.
The Tana Beles Sugar Factory, located 225 kilometers from Bahir Dar, has faced repeated setbacks since January 2025 (Tir 2017 E.C.), when its operations were largely suspended due to financial constraints and labor disputes. The most pressing concern has been four months of unpaid salaries, prompting workers to stage peaceful demonstrations at the factory. Employees had demanded immediate payment, but tensions escalated when security forces were deployed to the site. Reports from workers suggested that heavily armed personnel and military vehicles were stationed around the factory, which some saw as an intimidation tactic. While some viewed the response as a precautionary measure to maintain order, others criticized it as an attempt to suppress worker demands.
Despite the tensions, 421 employees remain on-site, primarily engaged in administrative and agricultural roles. Those who left have been reportedly reassigned to other sugar factories, and efforts are underway to compensate them for their unpaid wages.
Ethiopia’s government has been actively pursuing the privatization of its sugar factories, including Tana Beles, as part of a broader economic reform strategy. The factory, previously under the Ethiopian Sugar Corporation, has now been placed under an independent board, reflecting the government’s shift toward increased operational efficiency and potential private investment.
As part of this process, discussions have been held with Dangote Group, one of Africa’s largest industrial conglomerates. Aliko Dangote, CEO of Dangote Group, recently met with Ethiopian officials to explore investment opportunities in the sugar sector. The company has already conducted site visits and feasibility assessments at Omo Kuraz Sugar Factory No. 3, where it is involved in expansion projects. If negotiations advance, Dangote could play a key role in modernizing Ethiopia’s sugar production industry.
Dr. Biruk confirmed that discussions with investors are ongoing, as the government seeks to transition the sugar industry into private ownership. He acknowledged that privatization efforts remain complex, as they involve balancing public sector interests, workforce stability, and foreign investment considerations.
While the new board’s establishment marks progress, significant challenges remain in the road to recovery. The factory must resolve outstanding salary disputes, expand cultivated land, and restore full production capacity within the planned one-year timeframe. Additionally, with the privatization process still evolving, it remains to be seen whether investor interest will translate into tangible financial commitments.
For now, the situation at Tana Beles Sugar Factory remains uncertain, with both employees and industry stakeholders closely watching how the restructuring efforts unfold. The success of these measures will determine whether the factory can regain stability and contribute meaningfully to Ethiopia’s sugar production sector in the long run.
