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Short and sweet this month ...
The EU has announced that it is now satisfied with the balance of domestic sugar supply and demand having mandated a 2 million ton reduction in production earlier this year. However, Suedzucker – Europe’s largest producer – took the opportunity to point out that the balance was only there while raw imports remained at the current level. We are getting close to the EBA open market date of July 2009!
Ebro Puleva, the Spanish sugar company, is contemplating closing three of its seven beet factories in the wake of the EU regime reforms but, more interestingly, it is also planning to invest €33 million [US48 million] in a refinery near Cadiz.
The EU has agreed to resume support to the Fijian sugar industry, the military regime having agreed to elections by February 2009. Everybody seems to accept that the industry would not survive without that support but a feasibility study is being undertaken for the possibility of constructing a a fifth sugar mill in the Labasa region.
The privatisation of the Jamaican sugar industry is making slow progress with apparently eight bidders in the race [a race with no obvious prize]. The government has now appointed a team of people to examine the tenders and make a decision by next March.
What is unclear is why there are now eight bidders when there were only five back in March this year… The new bidders are reported to be Flo Sun [which is part of Florida’s Fanjul group of companies], Infinity Bio-Energy from Bermuda [but with large investments in Brazil] and Stirling Partners from the Bahamas [described as a boutique investment bank ].
T&&L SELLS SAENZ HOLDING TO MAN
Tate and Lyle has sold its 49% stake in Occidente to ED+F Man, the London trader. Occidente owns three sugar factories in Mexico – Tamazula, Mante and Xicotencatl – and is controlled by the Saenz group. The deal is reported to be valued at US$93 million. Saenz has an option to buy 1% of the shares so there may be an adjustment still to come but the transfer should be complete by early December.
We now know more about the proposed Madhvani project in the north, first reported here in August. It will be located – assuming that approvals are given – in the far north west of the country in the valley of the Albert Nile. This is the area which abuts the Sudan and the DR Congo and was [is?] the territory of the [hopefully slowly disbanding] Lord's Resistance Army. It seems that the factory will be sized to produce 100 000 tons a year of sugar.
It seems that the Procana project that we have reported for the last couple of months has moved : it is now to be established in the Elephants River valley close to the South African border [and hence the Kruger National Park]. It will draw water from the newly refurbished Masingir dam – something which is worrying the farmers downstream.
Last month we said that the real question was whether Maryborough would just accept defeat. Now we know the answer : no, it has put in a Aus$60 million counter-offer. The offer [worth about US$54 million] is in cash and shares and is assessed to be worth more than the Bundaberg offer – at least by some. The Mulgrave Board has again rejected the offer and urged shareholders to vote for the Bundaberg offer.
In the event the vote, scheduled for a date in Mid October, didn’t happen because the Australian Securities and Investment Commission postponed it, saying the Board had not given enough consideration to the Maryborough offer.
Behind all of this is the Guinness Peat Group : it owns 27% of Maryborough and, as we reported recently, is also involved in a fight for the control of Sugar Terminals Ltd. During October it emerged that it has also bought 5% of Isis mill. Watch this space.
GOKONGWEI BUYS PASSI
The Gokongwei group, which already owns Sonedco and Universal Robina on Negros and Cagayan Robina in northern Luzon, has purchased the two Passi mills on Panay. That now makes it the second largest sugar producer in the Philippines after VMC.
It looks as if Bronzeaok is going to start its second integrated sugarcane ethanol project in the Philippines even before the first one is complete. The first one is said to be currently under construction at the olf San Carlos factory, south east Negros. This later one, just announced, is called the South Bukidnon project so will presumably be on Mindanao.
Despite our comment in the September news about the PSMA winning its battle to have Indian sugar banned as “unfit for human consumption”, it seems it eventually lost. The Lahore High Court has allowed the release of the impounded sugar.
Booker Tate’s proposed Uva Wellassa project in Sri Lanka seems to be running into environmental resistance. The 25 000 ha project is reported to have Cabinet approval but it is located in what is known as the Maduru Oya forest close to a national park in the island’s central east. [It is only about 50 km north of the Pewatte estate which BT used to manage.] The project is part of the government’s long term plan to increase domestic production from the current 56 000 tons per annum. Domestic consumption is about 600 000 t/a.
EU APPROVES TRANSGENIC BEET
Last month the EU approved a ‘Roundup Ready’ transgenic sugarbeet developed jointly by Monsanto and German seed company KWS. However, it is not expected that the beet will be grown in Europe : the approval is primarily to allow imported sugar and possibly dried pulp from the variety to be used in food and animal feed for sale in the EU.