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The world price must be the most important feature this month. As for the rest, the news was hit by northern summer doldrums : not too much of anything as so many people took holidays.
Despite the comment that we reported last month about a recovery in the world price, raws continued their fall throughout August and were below 12 US¢/lb by the month end. What is more worrying is that there seems to be no apparent bottom as shown on the close-up graph below :
The short term issue seems to be a lack of demand for physicals but the longer term issue is that several organisations are now forecasting a 3 million ton surplus for the 2006/7 year. ISO is even predicting a small surplus for the current year when the final figures are available : output of 150.6 million tons compared to a demand of 149.7.
TAISUCO IN INDONESIA
Taisuco, the Taiwan Sugar Corporation, has announced plans to build a sugar factory in Indonesia’s South Sulawesi province. Although no capacity has been announced, the company has said that it is looking for 100 000 ha of land which makes for a very large production capacity. The budget for the project is reported to be US$ 100 million.
Oil-rich Nigeria seems to be investing some of its income wisely : the National Petroleum Corporation has just announced a biofuels initiative with two parallel objectives. One is to develop a fermentation ethanol industry – probably using cassava [manioc] as the feedstock – and the other is to develop a biodiesel industry based on palm oil.
Similar plans seem further advanced at a regional level : the south eastern Nigerian state of Ebonyi signed an MoU last month to establish an US$ 80 million fermentation ethanol plant using Chinese technology. The feedstock will be a mixture of cassava and sugar cane.
The labour force at Kinyara went on strike last month – but not about the imminent departure of Booker Tate now that the company is to be sold. The strike was about the workers’ provident fund that someone decided would be taken away by BT when they left…..
In another news item a local company announced the setting up of a cassava [manioc] based HFCS plant to serve the local bottlers. That would forestall any plans by the new owners to produce industrial quality sugar.
The cane industry in China’s Guangxi province was the latest to be hit by a typhoon/hurricane. The current estimate is that 10% of the crop has been lost. Ironically, this year’s crop was expected to be good as the rains were good following a previous drought.
‘OSCAR’ NOMINATION FOR CLEWISTON BOILER
The new Thermal Energy Systems boiler at USSC Clewiston has received a nomination for the 2006 Energy Institute Awards in the Environment category. The Awards are the energy industry equivalent of an Oscar and the nomination is for achieving emissions limits never before required by a bagasse fired boiler.
The aptly named Awash river – it flows through the Great Rift Valley to the east of Addis – has flooded, threatening the Wonji, Shoa and Metahara sugar estates. The region has been subject to heavy rainfall for some time so the ground is saturated and any more rain flows directly to the rivers.
There was a fire in a sugar silo at Bundaberg’s Babinda factory towards the end of last month but, as yet, the extent of the damage is not known. Babinda is just south of Cairns in northern Queensland.
MUMIAS EXPORT COGENERATION
Mumias has announced plans for a major export cogeneration project. At the moment it only exports about 2 MW, presumably on a ‘continuous power’ basis. When the new project is complete [scheduled for late 2008] the factory should be able to export about 25 MW. It is not clear what sort of PPA is in place however.
Coincidently, the government of Kenya announced last month that it would sell shares equal to 18% of Mumias on the Nairobi stock exchange.
SOUTH AFRICAN ETHANOL
The power ethanol sector seems to be slowly gathering pace in South Africa with the Central Energy Fund signing an MoU for technical assistance with Petrobras of Brazil. The current assumption is that the initial target will be 10% inclusion in gasoline. There is much talk of the local sugar industry switching to the Brazilian model and building more factories to balance the loss of sugar output. [One has to ask why when about half the output is sold onto the world market.]
Tongaat Hulett has announced a major investment plan for its Moçambique operations and is seriously considering the fermentation ethanol sector in South Africa [see above].
Its plans call for a tripling of the Xinavane capacity to 180 000 t/a and almost doubling Mafambisse to 100 000 t/a. Xinavane will also get a small distillery rated at 17.6 million litres/a. From comments made by Peter Staude, the group CEO, the investment is clearly driven by the EU’s EBA initiative.
The statement’s emphasis for South Africa was very much ethanol and some play was made of the existing experience with the group’s Triangle distillery in Zimbabwe which is rated at 180 000 litre/d. However, what was not mentioned was progress on the group’s direct white project. We look forward to hearing about that before too much longer.
It isn’t news that you want to hear when you are trying to sell the company but SCJ has told its shareholder, the government, that its out put fell 30 000 tons short of target and – perhaps worse – its rendement was only 12.73 tc/ts compared to a budget of 11.00.
Meanwhile, Wray and Nephew has announced that it is bidding for SCJ. Wray and Nephew, one of two private sugar companies on the island, was part of the ill-fated consortium that took over the company in the 1990’s – and then handed it back to the government when it failed to turn the company around.
Not far away, the Bajan government has confirmed that it will build its new integrated factory to replace the existing operations. What is less clear is whether the design is based on the high fibre cane, extended crop concept that has been its research focus for some time. The emphasis, as with other island economies without oil resources, does seem to be on export cogeneration though as the performance figures have been given as :
The Yemen refinery project has reared its head again, but this time it is in the Aden free-trade zone not offshore and the emphasis seems to be sugar refining not cogeneration using sugar refining as the dump condenser. A statement by a local company declares the capacity at 1.5 million t/a and the cost to be US$ 100 million.
Pakistan is to set up a “high quality Sugar Technology Research & Training Institute”, something that it really should have had a long time ago.
INDIAN COMPANY TO INVEST IN BRAZIL
Bajaj Hindusthan Ltd., India's largest sugar company, is reported to be planning US$ 500 million of acquisitions in Brazil. The rationale seems to be in part that there is no room for further expansion for the sugar industry in India and in part that you can own the land in Brazil, not rely on local farmers delivering their cane to you.
Infinity Bio-Energy, a company only formed in May and listed on the London AIM market, has announced the taking over of three Brazilian sugar and ethanol companies : Navirai Cooperative, Alcana and Cridasa.