The Dutch company HVA, which had started modern sugar industry in 1951 in Ethiopia in a joint venture modality by signing an agreement with the then Ethiopian government, had established Wonji and Shoa sugar factories in 1954 and 1963 respectively. Being well aware of the huge potential Ethiopia has for the sector by then, the Dutch company had also established Metahara Sugar Factory in the same modality at a distance of 200 km from Addis Ababa at a village known as Merti in 1965. Later in 1970 it had enabled the factory to start production. And, the establishment of this sugar factory had later on become the reason behind to the establishment of Kessem Sugar Factory.
Kessem Sugar Factory which had first been started as an expansion project of Metehara Sugar Factory ¢ s sugarcane plantation field was made to operate independently due to its long distance from Metehara Sugar Factory following the establishment of Sugar Corporation.Established at Awash Fentalie and Dulecha districts of Afar Regional State, the factory is located at 50 km distance from Metehara Sugar Factory. The factory uses the Kesem-Kebena dam which has a capacity of holding 500 million cubic meter water. The factory will at last have 20,000 hectares of sugarcane cultivation land using the water from the above dam. It Constructed by a Chinese company known as COMPLANT with 123 million dollars obtained in loan from the Chinese Development Bank, Kesem Sugar Factory is built with a design capacity of crushing 6,000 tons of cane a day at its initial stage which later on rise into a factory with a capacity of crushing 10,000 tons cane on a daily basis. The factory will also have facilities which will enable it to have ethanol factory as well as cogeneration. The factory has entered into regular production following its trial production by mid 2015. The factory, at its first phase, is designed to produce 1 million 530 thousand quintals of sugar and 12 million 500 thousand liters of ethanol a year. And, reaching its maximum crushing capacity on the second phase, it will have a capacity of producing 2 million 600 thousand quintals of sugar and 30 million liters of ethanol annually. It is also expected to generate 26 mega watts of electric power of which 15 mega watts will be sent to the national power grid. The factory is also benefiting the local community both economically and socially. The community members have got job opportunities from the 11 thousand jobs created by the factory. They also have been organized in11 sugarcane out growers associations and are supplying the factory with sugarcane.