07 February 2010African Sugar Digest1

Africa Sugar Digest
Number 2
07 February 2010 / Written by Jorge Chullén, IUF Sugar

Egypt: Cargill plans a sugar refinery

Agricultural conglomerate Cargill has requested a license to build a sugar refinery in Egypt with investments worth 600 million Egyptian pounds (USD 108 million). Egypt consumes around 2.8 million tonnes of sugar a year and produces 1.6 million tonnes, with the bulk of imports coming from Brazil.The refinery will be in the Damietta area on Egypt's north coast, and will enter into production one year after beginning construction.

Zambia: Zambia Sugar to double exports to EU

Zambia Sugar expects to double its annual exports to the EU to 200,000 tonnesin the next three years. Zambia benefits from duty and quota free access to the EU markets, thanks to the EU Everything but Arms (EBA) arrangement with the Least Developed Countries (LDCs). Zambia’s annual sugar production has doubled in the past five years from less than 200,000 tonnes to over to 450,000 tonnes. Zambia Sugar is a subsidiary of Illovo Sugar.

Mauritius: EIB to fund construction of two sugar refineries

The European Investment Bank (EIB) has agreed to a 15 million Euros loan (USD 20.7 million) to Omnicane to build two sugar refineries in Mauritius, as part of the EU support to the restructuring of the Mauritian sugar sector in the wake of the EU sugar reforms. The loan will also improve storage and handling facilities and expansion of an existing mill. The loan follows a 13 million Euros loan made in 2009 to FUEL Sugar Milling Company Ltd., which benefits from an interest subsidy from the European Development Fund.

The EIB said the support to Omnicane and FUEL will create some 70 new jobs, in addition to the employment of 500 existing workers. Refined sugar produced by the two companies will be sold to the German company Südzucker.

The initiative falls in the context of the 2006 Port Moresby Declaration through which the ACP-EC Council of Ministers agreed to 1.5 billion Euros (USD 2.076 billion) towards the costs of adapting the sugar sectors of the ACPs to new market conditions. In this process as well, the EU also committed 135 million Euros (USD 186.9 million) as budget support to the Government of Mauritius.

Kenya: Mumias Sugar posts 561 percent rise on profits

Mumias Sugar reported a pre-tax profits increase of 561 percent in the six months ending in December 2009, to 1.5 billion Kenyan shillings (USD 19.8 million). Revenues increased by 49 percent, benefiting from high international sugar prices, which are reaching levels not seen since the early 1980s. In the period, Mumias processed 1.1 million tonnes of cane, 19 percent higher than last year, and produced some 124,000 tonnes of sugar, an 18 percent increase.Also interesting is the appreciation of the Kenya shilling against the US dollar which favoures the company because most of its long-term contracts on spares, fuel and fertilizers are denominated in US dollars. Apparently, however, cane prices have not kept pace with sugar prices, because they seemed to have increased only in about 10 percent.

Tanzania: Comments on sugar imports and rising prices

News that Tanzania needs to import 80,000 tonnes to cover domestic consumption prompted comments from TPAWU members via their Yahoo Group (sugarworkerstanzania). In Kagera Sugar, the amount of rainfall has affected negatively the quality of the cane and created difficulties in the cane loading operations. In addition,the mill’s machinery requires upgrading as it suffers regular breakdowns. Kagera’s production goal in 2009-2010 is 45,000 tonnes, which now seems difficult to reach, given that only 26,000 tonnes were achieved by the end of January. Kagera’s harvest usually ends in the month of March, although it is expected that operations this year will go into April. TPAWU members from Mtibwa commented on management shortcomings and the low efficiency of small-scale cane farmers, who supply some 65 percent of the cane, according to them.

New Sugar and Ethanol Projects

  • Kenya: Two new mills approved.Local paper Daily Nationsaidprivate investors have obtained the government’s approval to build two new sugar factories. One will be located in the Ndhiwa District (Nyanza Province) with a capacity to crush 1,000 tonnes of cane per day, while the other is proposed for the Trans Mara District (Rift Valley Province) with a daily crushing capacity of 2,500 tonnes.
  • Kenya: Mumias to build ethanol plant.Mumias signed an agreement with the Indian company, Avant Garde, for the design and construction of the Mumias Ethanol Distillery Project, with a price tag of 3.5 billion Kenyan shillings (USD 46.5 million). Production is expected to start in 2011. The ethanol venture follows the construction of a cogeneration plant, which produces some 38 MW and was commissioned in May 2009.
  • Uganda: Madhvani to invest in ethanol.The Madhvani Group announced it will invest 50 billion Ugandan shillings (USD 26.6 million) to build an ethanol plant in the Mukono district, with an annual production of 25 million litres. The Group owns Kakira Sugar Works, the largest sugar producer in the country. An expansion program scheduled was to be completed last year to raise annual sugar production from some 90,000 tonnes to 160,000 tonnes.

Africa Sugar Digest is produced thanks to the IUF Global Sugar project in East and Southern Africa. It appears as news becomesavailable. Contributions are welcome. Visit the IUF sugar site at for further information on the cane, sugar and ethanol sectors.

The IUF African sugar project is supported by the Social Justice Fund of the Canadian Auto Workers (SJF-CAW), with contribution from the Canadian International Development Agency (CIDA).

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