Sugar Technology
On-line News

July 2008

Welcome to our news page!

We try to bring you the latest news and comment on this page but it will always be a better place if you send us your news. You can write to us by clicking on the Contact link at the left.

Clewiston dominates the news this month ...


It looks as if the world price is on the move again with a spike at the end of June which broke through the 14 US¢/lb barrier. Whether that can be sustained is another matter of course.


US Sugar and the State of Florida shocked us all at the end of June by jointly announcing a deal for the state to buy the company for $1.7 billion in order to shut it down as part of its Everglades restoration project. The company only completed its major expansion project at the start of the 2007/8 crop and the factory is currently probably the largest in the world with a nominal capacity of 40 000 tcd [metric].

The negotiations are clearly well advanced with the parties saying that they expect to finalise a deal by this September. The company will then have six more years of operation, presumably closing in the spring of 2014. The announcement comes at a time when the company is involved in litigation with some of its own shareholders over a private sector purchase offer which was rejected without seeking shareholder agreement. This deal, assuming it goes through, values the company shares at above the price previously offered so presumably undermines the shareholders’ case.

Florida first purchased the Talisman company, the most southerly of the sugar companies, in the late 1990’s but at that time it only paid $152 million for 50 960 acres – call it $3 000 per acre. This time it is offering $1.7 billion for 187 000 acres – call it $9 000 per acre – albeit that the factory is much more valuable than the Talisman factory was.


Western Sugar, the beet cooperative previously owned by Tate & Lyle, has announced that it is closing its Greeley factory in northern Colorado. Presumably its beets will be processed by the cooperative’s next nearest factory at Fort Morgan, some 50 miles away.

Meanwhile, Southern Minnesota Beet Sugar Cooperative, the owner of California’s Spreckels Sugar, has announced the closure of its Mendota factory in California. That would leave Spreckels with just one factory at Brawley. Apparently only one quarter of the 1999 acreage was sown to beets in 2007.


It looks as if Infinity Bio-Energy will be taking over the JSC. Infinity is essentially a new investment fund listed on the London AIM [Alternative Investment Market] which started operations in Brazil in 2007 – which might explain why it is prepared to consider buying JSC. The negotiations are expected to finish in September this year.


Tereos [Beghin Say as was] has announced that it will no longer be considering the purchase of Danisco’s sugar division as Nordzucker announced that it would like to buy the business unit. Sudzucker has already announced its interest. Analysts have put a value of $1.24 billion on the deal.


India seems in disarray again with production predicted to drop drastically, perhaps as low as 17 million tons, 6 million tons below domestic demand. Agriculture is again the issue but this time it is farmers leaving the sector as they don’t get paid what they are due.


The Thai government has announced a restructuring of its sugar industry aimed at increasing cane production from 73 to 95 million tons by 2010/11. The focus seems to be on agriculture which is still in the hands of relatively small farmers but the objectives would be more likely to be achieved if the government pulled out of interfering all together rather than retaining its control.


Mitr Phol, on of Thailand’s largest sugar companies, is adding another cane factory to its portfolio in China’s Guangxi Autonomous Region, down near the border with Vietnam. The factory will initially crush 6 000 tcd, expanding to 10 000 tcd in due course. Mitr Phol state that on completion of the new unit they will have 9% of the Chinese market.


A clarifier collapsed at CSR’s Pioneer mill in the second half of June. Thankfully, nobody was seriously injured. The mill had just started for the new crop but it is not known what work, if any, had taken place on the particular clarifier and nor is it clear what type of clarifier it was. Pioneer is a large mill and is expected to be out of action for several months. Although CSR has three other mills in the region, they are forecasting a crop extension of 2 to 3 weeks.


The new government is talking big in Kenya : it has announced a new project to develop a 30 000 tcd [not a typo : thirty thousand!] factory in the western Nyando sugar belt. The reasoning seems to be that neither the bankrupt Muhoroni and Miwani mills nor Chemelil and Sony crush anywhere near their nominal rates so a new mill is required. There is no mention of where the money will come from to build the mill.


It seems that the delay in commissioning this year’s part of the Nakambala expansion project [reported in the March news] is still impacting on production : during June the government gave ZSC four days to get sugar back on to the shelves and said that it was prepared to accept unfortified sugar for sale [Zambia has fortified its sugar with Vitamin A for the last 10 years].


Moçambique is predicted a substantial increase in production from 244 000 tons last year to 295 000 tons this year, thanks largely to the expansion projects at the Tongaat-Hulett factories it seems.

Homepage  Return to Current News  Page Top