Sugar Technology
On-line News

August 2008

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A good harvest ... of news :


Florida’s Governor may be pleased with himself for negotiating to buy out USSC [see last month’s news] but the state’s Senators and Congressmen are not happy and not all of its residents are convinced that it will happen.

Many people are questioning the cost and it seems that the Army Corps of Engineers, responsible for the regional water management, were not aware of the plan and were working on a completely different approach which didn’t utilise any USSC land.

What people are also realising is that only perhaps 10 or 15% of the USSC land is needed for the Everglades preservation scheme but, more importantly, some 35 000 acres of the Florida Crystals land further to the south is also needed. Will the state pay another 1.7 billion to buy at the Fanjul family?


We are no closer to knowing the cause of February’s explosion at the Savannah refinery but Washington is hearing echoes of the explosion as a Senate sub-committee investigates. It turns out that a new VP Operations had been appointed just three months before the explosions : he is claiming that he raised the alarm about poor conditions but was told by Imperial to ‘back off’ although he did note improvements after his comments.

OSHA is apparently proposing a $5 million fine on Imperial for the explosion and a second fine of $3.7 million for violations found at the group’s Gramercy refinery in Louisiana a month after the explosion.


The JSC purchase deal with Infinity Bio-Energy that we reported on last month has apparently now been signed. The government has also announced that every employee will be made redundant with ‘some’ of them re-employed by the new company. Redundancy payments will total about US$ 35 million, two thirds of that coming from EU payments under the sugar regime reform arrangements. What it has not announced is the purchase price : have they had to pay Infinity to take JSC off their hands?


Is Cuba setting its sights too high again? It is saying that it is planning a 25 to 30% increase in production relative to the 1.5 million tons produced in the year not long finished. That figure was only achieved because of late finish to the crop however, caused by a dry spring. Most of the investment seems to be in harvesters and trucks so presumably the chronic problems are seen to be harvest related rather than factory related.


Following the withdrawal of Terreos that we reported last month, Nordzucker beat Sudzucker to the table and signed a deal to buy Danisco’s sugar division. The purchase price, reported to be about € 750 million [about $ 1.2 billion], seems very high in the light of the continuing consolidation within the EU.


Ebro Puleva, the Spanish food company, has announced that 11 companies have drawn down the prospectus for the sale of its sugar division. Earlier in July it was forced to deny that it had received a €400 million [$620 million] from ‘Cajas de Ahorros de Castilla y Leon’, a savings bank controlled by the government.


Hellenic sugar has announced that it will negotiate with strategic partner ‘Cal West Ethanol’ to convert two of its five beet factories to ethanol production as part of its reaction to the EU regime change.


The proposed Tana River project in Kenya, led my Mumias, seems to be having problems with the High Court of Kenya placing a ban on further development on environmental grounds despite the government granting of a licence to the project. If it does finally go ahead, the project will involve 20 000 ha of cane and an industrial complex with 34 MW of export cogeneration and an ethanol plant fed with molasses from the sugar factory and Mumias.


Another sugarcane project has been announced in Moçambique, this time at Dombe in the Manica province : west of Beira and about 30 km from the Zimbabwe border. The project, sponsored by venture capital fund Principle Energy, has a budget of $280 million and is forecast to produce 213 million litre/annum of ethanol plus 65 MW of export electricity. Commissioning is planned for 2012.


It looks as if the Indian federal government will partially deregulate sugar later this year, permitting millers to sell their sugar as and when then wish to. At the moment they are forced to sell 10% of their production to the government for doing out to the poor and the remainder can only be sold on receipt of a release order allocated by the government. A step in the right direction but will the state governments still fix the cane price for instance?


BSO China has apparently agreed to invest nearly $500 million in beet factories in Heilongjiang Province, the most north easterly of that country’s provinces up against the Eastern Russia border. The announcement came from the local authority but BSO itself is understood to have had no comment.


July saw a sudden surge in the sugar cooperatives of Australia. First of all Maryborough announced that it had 90% approval from the shareholders of the Mulgrave cooperative, thus beating rival Bundaberg in the 15 month fight for control of what is, after all, a relatively small operation. The deal values Mulgrave at about Aus$ 60 million.

Then the shareholders of Mackay voted to convert from a cooperative to an unlisted public company. That move was quickly followed by a joint announcement from Mackay and the Proserpine cooperative that the two were exploring the possibility of a merger.


T&L has sold its sugar trading division to Bunge, a US agribusiness that seems to have ambitions to become a second Cargill. The move is another step in the desaccharification of T&L : if it has no trading operation then buying raws to refine will become even more difficult


Syngenta is claiming that its ‘Priori Xtra’ fungicide, recently released for use on sugar beets, will control all key diseases and increase sugar yields by 120%. Given say 8 t/ha as a typical yield – it depends where you are in the world, France certainly does much better for instance – then a 120% increase would mean 9.6 t/ha extra or 17.6 t/ha …..

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