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Ethiopia plans to triple sugar output by 2011

ADDIS ABABA, Sept 25 (Reuters) - Ethiopia has launched a $1.3 billion project aimed at more than tripling the country's annual sugar production by 2011, the state-run sugar board said on Tuesday.

Ethiopia's three state-owned sugar estates currently produce around 300,000 tonnes annually and the Horn of Africa nation wants its production to reach 1.3 million tonnes by 2011.

"The erection of a new factory and the expansion of existing sugar estates are designed to meet local demand and for export," Belay Dechassa, director of Ethiopia's Sugar Development project, told reporters.

"The aggregate total annual sugar production by 2011, is expected to reach over 1.3 million tonnes", he said.

Ethiopia plans to export to Europe and countries in the Common Market for East and Southern Africa (COMESA) trade bloc.

Belay said the $700 million Tendaho estate, Ethiopia's largest sugar project, is expected to produce up to 600,000 tonnes of sugar a year when it starts production within the next five years.

Tendaho is located in the lower Awash Valley in the Afar region with road and railway links to Djibouti's port, landlocked Ethiopia's outlet to sea.

The three existing estates are each undergoing a $200 million expansion project to boost their production, he said.

Wonji sugar estate, 100 km (62 miles) east of the capital Addis Ababa, is projected to produce 350,000 tonnes annually compared to 75,000 tonnes currently.

Methara sugar estate aims to increase its annual output to 190,000 tonnes from the current 120,000 after the expansion, while Finchaa sugar factory in the west of the country will produce 270,000 tonnes from the current 80,000.

According to a study by the country's sugar development authority, investors are planning to develop sugar plantations in the Awash Basin, Blue Nile Basin, Tekeze Basin and Omo-Gibe Basin.
((Reporting by Tsegaye Tadesse))