Africa Sugar Digest, Vol. III, No 3, 27 March 2012


• Mali: Illovo’s sugar project under pressure
• Sudan: Kenana plans Hong Kong IPO
• Kenya: Biofuel complex proposed for Bungoma
• Mozambique: New sugar mill for Zambezia
• Niger: Chinese Sinolight to build new sugar plant
• South Africa: Ethanol plant by 2014
• Kenya: Nzoia Sugar to set up bottled water plant
• Zimbabwe: Politics threat ethanol project

Mali: Illovo’s sugar project under pressure

Illovo Sugar said on 20 March that the Markala Sugar Project (MSP) in Mali has been slowed down by incomplete funding and unfinished government’s investment in infrastructure. Illovo is an strategic partner in the MSP, which has a price tag of 3.7 billion rand (USD 482 million). Media sources added that some financial institutions are reluctant to accept the opinions of African environmental consultants and development banks on the project. In fact, some studies by international groups said that three main projects under development would have a major negative impact of the wetlands of the Inner Delta Niger in northern Mali:  the Illovo’s project, a project by a Chinese company, and a hydroelectric dam some 1,000 km upstream. A couple of days after the of Illovo’s statement, the military staged a coup d’état that might create further disruption to the Illovo project.

The Markala Sugar Project comprises two schemes: a cane plantation in Markala on the Niger river with 14,000 hectares of irrigated land, and a diversified complex with a factory to produce 190,000 tonnes of sugar per year, a distillery of 15 million litres per year, and a co-generation facility of 30 MW. It is said that the project would create 7,000 direct jobs and 19,000 indirect jobs, and it would make Mali self sufficient in sugar.

Sudan: Kenana plans Hong Kong IPO

Kenana Sugar is looking to raise USD 200 million by floating a quarter of its shares in Hong Kong next December, looking to finance new projects to double production to over one million tonnes of sugar per year, according to a Reuters report dated on 18 March. A Kenana spokesperson said that Hong Kong was a logical place to launch the Initial Public Offering (IPO) because of the growing Chinese interest in Sudan’s agricultural sector.

Kenana expects to produce 390,000 tonnes of sugar in 2011-12 at its plant in White Nile state, and raise its production to 450,000 tonnes by 2015.  Two other new plants are also scheduled to open in the near future. The El Ramash factory in Sennar state should produce 120,000 tonnes in 2013-14 season, while the Redais project will start manufacturing 500,000 tonnes of raw sugar in 2014-15. The latter includes some investment by the Chinese Complant, also known as China National Complete Plant Import and Export Corporation. Kenana has expanded production into ethanol, animal feed, equipment manufacturing, forestry and farming. It reports an USD 600 million annual revenue, which aims to increase to USD 1 billion by 2014.

Kenya: Biofuel complex proposed for Bungoma

An USD 147 million biofuel complex to produce fuel ethanol from tropical sugar beet will start in Bungoma, with first trials expected in early 2013.The new company, Webco, is funded by investors from Britain, China and Qatar, and commercial banks like the Bank of Africa and Equity Bank.

The company said that farmers who would be moved from the area have signed letters of intent to sell their land at 800,000 shillings per acre (USD 9,800). On the other hand, the company said that 521 farmers with 14,800 hectares are willing to grow sugar beet to supply the factory, and that the project has been well received by farmers because beet has a maturing period of six months, compared to the 18-month average for sugar cane.

Mozambique: New sugar mill for Zambezia

Studies are under way for a new sugar cane plantation and mill in the Mopeia district, in the central province of Zambezia, reported the daily Noticias. According to Mopeia district sources the project is financed by South African investors, and the plantation will cover 30,000 hectares. Planting cane on the first 10,000 hectares could take place in the second half of this year, and the installation of the factory would take place by mid 2013. The sources added that some 3,000 direct and indirect jobs will be created. Most of the direct jobs will be in the plantation, and the mill will employ about 400 people.

Niger: Chinese Sinolight to build new sugar plant

Following a meeting with Niger president in early March, the Chinese company Sinolight announced plans to build a 100,000-tonne per year sugar refinery in Niger. The plant would be located some 140 km from the capital Niamey and will create some 10,000 jobs, said the company.

South Africa: Ethanol plant by 2014

South Africa plans to invest 2 billion rand (USD 258.5 million) to build an ethanol plant using sugar beet and sorghum said an executive of Sugar Beet RSA, organisation which would implement the project in collaboration with the government. The plant would be located in the Eastern Cape province. Construction could start later this year and operations by 2014. Initial production is planned at 90 million litres of ethanol per year, output that may eventually raise to 200 million litres. Invest in Gold CoSouth Africa’s Department of Energy plans to finalise the mandatory blending regulations by the end of this year.

Kenya: Nzoia Sugar to set up bottled water plant

Nzoia Sugar Company has invited international companies to look at building a fully automated plant at their factory with a capacity of producing 3,000 bottles per hour. The new plant aims to broaden Nzoia’s income base, in preparation for the expected increased competition when the domestic sugar market is opened in March 2013. At present, sugar millers are protected by safeguards granted by the Common Market for Eastern and Southern Africa (COMESA), which limits the amount of imported sugar from country members.

Zimbabwe:  Politics threat ethanol  project

Zimbabwean media reported that the USD 600 million ethanol project in Chisumbanje runs the risk of collapse as Zanu PF personalities, including Cabinet ministers and top government officials, have demanded free shares in the project claiming indigenisation of investments.

The project is a partnership between the Agricultural and Rural Development Authority (Arda) and Billy Rautenbach’s Green Fuels, Rating and Macdom Investments in a 20-year Build-Operate-and-Transfer (BOT) arrangement signed in 2009. Newspapers said some politicians claimed Rautenbach, who was born in Zimbabwe and is linked to Zanu PF, was not indigenous, and he has to cede 51 percent shareholding to them, in accordance with the indigenisation and economic empowerment act.

Sources said there are over 5,000 jobs under threat after production stopped some two months ago, having the plant reached its 10 million litres storing capacity. In early March, a workers’ delegation sought audience with Prime Minister Tsvangirai, and the ministers in the Energy and the Agriculture portfolios, because they were concerned that the project may collapse, in a similar fashion to the Reserve Bank of Zimbabwe bio-diesel project in Mount Hampden.

Africa Sugar Digest is produced thanks to the IUF Global Sugar project in East and Southern Africa. It appears as news becomes available. Contributions are welcome. The IUF African sugar project is supported by the Social Justice Fund of the Canadian Auto Workers (SJF-CAW), with contribution from the Canadian International Development Agency (CIDA) through the Labour International Development Program of the Canadian Labour Congress (LIDP-CLC).

Africa Sugar Digest, Vol III, No 3, March 2012 – click to download –

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