Sugar Technology
On-line News

November 2012

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Not a bad month but nothing of great interest :


The world price continued to hover but this time more on the underside of 20 ¢/lb. Where next?


There seems to be a row brewing whereby the EU is proposing to limit the production of ethanol from certain crops because they are less climate-friendly than initially thought and compete with food production. This is a major U-turn and would affect bio-fuel projects from cereals, sugar and oilseeds.


The Irish government now seems to be backing the re-establishment of a sugar industry in that country, albeit after the expected EU regime change in 2015. Greencore, the owners of the previous industry, took the EU incentives from the last regime change and shut down the industry in 2006 or 7 : watch this space!


Greece’s Agricultural Bank is offering Hellenic Sugar for sale again after last year’s attempt to sell it failed. The front runner is thought to the MK group from Serbia so we have no idea what happened to Suedzucker and Sunoko, a Serbian company apparently owned by Nordzucker.


Tereos, the major French sugar group, has acquired the Ludus sugar factory in Romania only five years after selling its 50% stake in the factory to the company it is now buying from. There is no mention of the purchase price but Ludus, which produces about 34 000 t/a of beet sugar, made a profit of about € 2.4 million last year. Tow other factories in the country are owned by Austria’s Agrana group.


Last month we reported that Western Sugar was expecting a record beet harvest. It now looks as if that is a country-wide trend in a year where the conditions were very difficult for the mid-west’s staple wheat and corn crops. Amalgamated Sugar is expecting an average of 35 to 36 t/a [95 to 98 metric/ha] which would beat last year’s record of 34.7 t/a.

Meanwhile, at American Crystal the second campaign is under way since the company locked out its union workers in August 2011 and all seems to be well with a similar record or near record crop expected.


The ill-fated Lacassine sugar project is back in the news again. Readers will remember that this is the factory near Lake Charles, Louisiana, that was built by the state and subsequently sold to a Colombian group which promised to build an ethanol plant there [the equipment is lying in the yard there]. The project was declared bankrupt last year and now the state – which is still paying off the original debt – wants to spend another $7 million to but the place.


The Mexican crop is just starting and the National Committee for Sustainable Sugarcane is forecasting a 12.3% increase in production to 5.67 million tons. That would signal a return to the production figures in the first half of the last decade.


It has now been confirmed that ASR, the Fanjul owned company which is the largest refiner in the world, took control of BSI during October. It is not clear what the new shareholding profile is like but it seems that the employee trust still owns some of the company.


A war of words between the producers and the industrial consumers in Vietnam has given a glimpse of the cost structures in that country. Even the Vietnam Sugar and Sugar Cane Association admits that its sugar is the lowest in the world while the price is the highest, something of an exaggeration. In truth the cost of production is about 150% of that in almost neighbouring Thailand but one suspects that is more to do with a lack of efficiency than anything.


It must be five years since Chiel Jedang, the then owners, closed the Ord river sugar factory and moved it to Indonesia. There are now signs that the sugar industry might start again in the Ord with talk that China’s Shanghai Zhongfu group will be granted the rights to develop the entire 15 000 ha of the second stage of the irrigation scheme.


It looks as if the sugar refinery proposed for Port Sudan is likely to go ahead with support from Italy’s Eridania. The local shareholder will be Kenana so presumably it will be KETS which will implement the project. The plan seems to be for the plant to initially operate as a traditional port refinery to make up the country’s deficit and to then switch to an export refinery if and when the country swings into surplus.

We say ‘if and when’ because if it costs $1.1 billion to develop a 400 000 t/a sugar estate at the White Nile, will the country ever be self-sufficient?


In the May and September news we reported that the Kwale project just south of Mombasa in Kenya was imminent and now it seems it is. Omnicane from Mauritius is a 20% shareholder in the project and managing partner. It announced in October that it had started implementation of what will be a 3600 tcd factory with an ethanol plant and export electricity capability. The best news of all is that the project will have a core estate. Omnicane talks of investing $200 million.

Another new factory project has been announced in Kenya, this time not far from Sony in the south west of the country near the border with Tanzania and the Maasai Mara park.

Meanwhile, Terra Mauricia – the owner of the Belle Vue factory in Mauritius – has announced that it too wants to invest $200 million in Africa without saying whereabouts it is looking. It did say that it has four possible projects under review. It already owns 25% of two factories in Côte d’Ivoire


We reported about a new factory project in Uganda in the May news this year : Sugar and Allied Industries Limited [SAIL]. The company is in the news again but only because it is being accused of stealing land from farmers. In practice one suspects that it is a misunderstanding of the cane purchase contracts where the company, reasonably, needs collateral before lending farmers seed cane, fertiliser and pesticides in advance.


Zimbabwe seems not to have lost its appetite for self-destruction : the ‘Ministry of Indigenisation’ has warned Triangle that it must respond within 14 days with a plan to ensure that half its shares are held by indigenous people. This could be difficult for a publically quoted company unless it creates a special class of new share with no voting rights and perhaps only one millionth of the normal dividend rights.

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