Sugar became an important export in the late 19th century after the forced opening of ports following the second Opium War. Up until the 1930s it dominated the economy, and under Japanese colonial rule, sugar fields and processing factories were established all over the island. The Hualien Sugar Factory was built in 1921 and at its peak was processing 2600 tons of sugarcane a day.
Just south of the factory grounds is Danong Dafu Forest Park (大農大富平地森林園區, Dànóng Dàfù Píngdì Sēnlín Yuánqū), 11-hectares of reforested ground that was once planted with sugar fields. Nestled between the coastal and central range, the views here are breathtaking and the high grass teems with birdlife. The turn-off for the park is at Km256 on Highway 9, though you can also wend your way here from the sugar factory backroads.
Even if you don't plan to stay the night at the factory, stop at the ice cream shop (NT$45; 8am-8pm), and a wander around the factory grounds. Here's a bit of trivia for you: the large carp pools beside the ice-cream shop are craters from the US bombing of Taiwan during WWII.
The sugar factory is just south of the town of Guangfu (光復) on Highway 9. There are signs in English on the highway directing you there.