• South Africa: Mandatory blending for bio-fuels passed
• Ethiopia: Ambitious sugar expansion plans
• Tanzania: Kilombero Sugar Illovo to start beverage alcohol production
• Cameroon: Indian and local investors in a USD 113 million factory
• Egypt: Sugar investments in Sudan and Tanzania
• Swaziland: Sugar wages increase in 2012/13 largest in the country
• Our last issue of Africa Sugar Digest
South Africa: Mandatory blending for bio-fuels passed
The South African Department of Energy passed the so-called “Regulations Regarding the Mandatory Blending of Biofuels with Petrol and Diesel,” published on the Government Gazette on 23 August. The regulations allow a blending range of 2-10 percent of bio-ethanol in gasoline/petrol, with ethanol derived from vegetable sources; and, in diesel, a minimum of 5 percent concentration of biodiesel derived from vegetable or animal sources. This piece of legislation has an enormous significance for the country’s sugar cane sector in terms of new markets and the potentials for employment creation.
Two main sugar companies, Tongaat Hulett and Illovo Sugar, have expressed their support to diversify production based on sugar cane, either with ethanol production or cogeneration of electricity. Estimates by Tongaat said that cogeneration may ensure some 20,000 direct jobs, which the company deems to be at risk, and create 23,000 new jobs if cane output returns to full production. Introducing mandatory ethanol blending, said Tongaat in November 2011, would mean replacing some 400,000 tonnes of sugar with E-2 bio-ethanol (2 percent blending) or 1 million tonnes if E-5.
In some interesting developments, the Confederation of Zimbabwe Industries endorsed a call for a domestic legislation on the blending of gasoline/petrol with bio-ethanol by December 2012, at a minimum of 10 percent (E-10) or a discretionary 20 percent. This relates to the controversial situation of the USD 600 million ethanol plant in Chisumbanje, which stopped operations after reaching its full storage capacity of 10 million litres last December, and after the government’s refusal to pass legislation on bio-fuels. It would be ironic if future fuel exports from South Africa to Zimbabwe do include bio-fuels.
Ethiopia: Ambitious sugar expansion plans
Plans to build ten sugar factories in different areas of Ethiopia estimated to be worth 80 billion birr (USD 4.5 billion) are progressing well according to the Ethiopian Sugar Corporation. The projects include also the construction of dams and roads, irrigation and infrastructure development in different localities in the states of Afar, Amhara, Tigray and Southern Region. The Ethiopian Sugar Corporation web site cites three existing projects, and also May 2014 as the date to finalise the building of the proposed new ten factories. According to the corporation, sugar production will increase to 2.3 million tonnes by mid 2015, with approximately 1.2 million tonnes destined for exports. The final objective is to make the country one of the world’s top ten sugar exporters.
The Ethiopian sugar plans are not without controversy. A report by Human Rights Watch (HRW) said the projects in the Omo Valley will displace thousands of people, and it includes the building of what would be the Africa’s largest dam (the world’s fourth biggest), which has added to the controversy.
Tanzania: Kilombero Sugar Illovo to start beverage alcohol production
A report by the East African Standard said that Illovo Sugar received approval on their environmental impact assessment to build a USD 45 million distillery at its Tanzanian subsidiary, Kilombero Sugar. The distillery will produce 12 million litres per year of beverage alcohol and, according to the report, its construction started last year. Praj Tanzania, a subsidiary of Praj South Africa, is the contractor for the project. Illovo Sugar also said that they have plans to produce alcohol in Zambia and Malawi by 2015.
In related news, the Tanzania Bureau of Standards (TBS) cautioned fuel importers last April that imported gasoline blended with ethanol is considered an adulterated and illegal fuel, following local standards. The case appears related to complains by the Tanzania Association of Oil Marketing Companies (TAOMAC) that fuel imported earlier this year appears to be gasoline of poor quality because of its blending with ethanol.
Cameroon: Indian and local investors in a USD 113 million factory
Cameroonian and Indian investors plan to invest USD 113 million in the growing and processing of sugar cane in East Cameroon. Justin Sugar Mills said it owns 155,000 acres in Bertoua in Cameroon’s East Region, and plans a factory with an initial daily crushing capacity of 4,000 tonnes of cane, 16 megawatts of cogenerated electricity and 45,000 litres of alcohol per day. The company estimates it would create some 5,800 jobs, including 3,000 temporary jobs. Long-term objectives are to increase crushing capacity to 20,000 tonnes of cane, cogeneration of 80 MW and triple the alcohol production. Currently the state-run SOSUCAM produces about 120,000 tonnes of sugar per year, against an estimated domestic consumption of 210,000 tonnes (2011).
Egypt: Sugar investments in Sudan and Tanzania
The Egyptian-African Company for Investment and Development announced an investment of USD 400 million to set up two sugar mills, one in Sudan and the other in Tanzania, to cover local demand, including Egypt’s, and to export surpluses to neighbouring and European markets. The company said it has successfully negotiated funding for the sugar factories from the African Bank for Development and some French institutions.
In Tanzania, the Egyptian African Company said it plans to acquire between 10,000 and 20,000 acres in Rufiji, some 100 kilometers from Dar Es Salaam, aiming at producing an annual 120,000 tonnes of sugar.
The Egyptian African Company was set up to promote investments in the Nile Basin countries and to help the Egyptian private sector enter these markets.
Swaziland: Sugar wages increase in 2012/13 largest in the country
Wages in Swaziland’s sugar industry will increase by 8.3 percent in the 2012/13 season, effective April 2012, according to the annual wages settlement report by the Federation of Swaziland Employers and Chamber of Commerce, who added it’s the highest wage increase in the country’s economy.
Our last issue of Africa Sugar Digest
Africa Sugar Digest was launched in January 2010 to replace the occasional, but then increasingly more frequent, electronic mailings to the IUF-affiliated unions carrying news on the sugar sector and workers. Under the IUF Global Sugar project in East and Southern Africa, the Digest improved the sharing of information and contributed to building a common understanding of developments in the sector among unions. This year, thanks to the Canadian Auto Workers (CAW), we made a further improvement by redesigning the IUF Sugar Workers Network web site. It also meant, however, that the Africa Sugar Digest had fulfilled its purpose, and its publication will be discontinued. We hope that our readers will subscribe to the IUF Sugar site (www.iuf.org/sugarworkers/) and will keep in touch. Thanks to all of you for your interest in our newsletter.
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. Visit the IUF sugar site at www.iuf.org/sugarworkers/ for further information on the cane, sugar and ethanol sectors. 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).