Malawi: Two Sugar Companies to Start in 2013

Africa Sugar Digest Volume III - Number 4 Written by Jorge Chullén, IUF Global Sugar 4 May 2012 [email protected] Malawi: Two sugar companies to start in 2013 Malawi's sugar production is expected to increase by 60 percent in 2013, thanks to two new investors. At present, Illovo Sugar (Malawi) produces 330,000 tonnes of sugar and the two new companies will add 200,000 tonnes, bringing the annual total to 530,000 tonnes. A group comprising Malawian and British investors will set up the Limphasa Sugar Scheme in Nkhata Bay, with a price tag of USD 60 million; while a local business group will invest USD 3 million in the Ntalimanja Sugar Scheme in Nkhotakota. Both companies have already planted sugarcane. Another company also scheduled to start is Lifuwu Sugar Estate in Salima, which is reported to have invested USD 130 million. Meanwhile, Illovo Sugar (Malawi) plans to expand production by an additional 150,000 tonnes. The Industry Minister said the new investments will have a combined capacity to produce an extra 480,000 tonnes of sugar per year, creating 7,200 direct jobs and opportunities for an estimated 5,600 small-scale cane growers. Zimbabwe: 4,500 workers in ethanol plant may lose jobs Some 4,500 workers at the Green Fuel ethanol plant in Chisumbanje could lose their jobs if compulsory blending of ethanol in gasoline is not introduced soon. The company already ceased production on February 6, after running out of storage capacity, having some 10 million litres in stock. This resulted, according to newspaper reports, in 700 factory workers being sent on leave. Equally affected are the estimated 1,200 farmers that supply cane to the factory. Investment on the plant is reported at USD 600 million. The Energy Minister has ruled out compulsory blending and advised Green Fuel to export their product if they could not sell it locally. The company replied that exporting the ethanol would be counterproductive because it would only be re-imported as blended fuel at an extra cost to consumers. Newspapers reported that drivers remain sceptical about the E10 fuel (a 10-90 ethanol/gasoline blend) because its price is just marginally lower than gasoline (estimated at only 3 US cents on the litre) and its possible negative impact on their vehicles, while service stations do not have the infrastructure to store the product. Earlier news highlighted a political edge to the imbroglio as some ZANU-PF politicians, including top-rank bureaucrats, demanded a partial transfer of ownership on the plant based on the government's indigenisation policy. Uganda: New sugar factory and cogeneration plant The Sugar and Allied Industries Limited (SAIL) plans to set up a sugar factory in Busoga by January 2013, with an attached cogeneration plant to produce 12 MW, of which 8 MW will be sold to the national grid. SAIL is one of the many companies that were licensed last year in the context of a sugar shortage. SAIL, however, appears to face some opposition by residents who said that there are enough sugar factories in their area, while some large sugar companies having petitioned the government to stop investors from setting up mills in the same catching area.

IUF Global Sugar Program 4 May 2012 Africa Sugar Digest 2 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 the country. The plant would be located some 140 km from the capital Niamey and will create some 10,000 jobs, said the company. Sudan: Two million acres promised to Saudi Arabia A source with the Jeddah Chamber of Commerce in Saudi Arabia said in early April that the Sudanese government had agreed to give his country two million acres of land as a farming investment, which would allow the Arab state to ensure food supplies, with potential surpluses to be exported to other destinations. The lands would be part of a free zone, and will not be subject to taxation or covered by Sudanese laws. They will be located in East Sudan because of access to Port Sudan, which allows easy shipment to Saudi Arabia across the Red Sea. Saudi Arabia wants to build stocks of basic commodities such as sugar, wheat, rice and oil to avoid the negative impact of rising global food prices and to meet the demands of a growing population. Swaziland: Euros 54.267 million grant for the sugar sector On 23 April the European Union (EU) and Swaziland signed a Financing Agreement for EUR 54.267 million (USD 71.6m) to improve the competitiveness of the sugar industry. The program will contribute to improve the road network, improve the productivity and efficiency of small and medium scale cane growers and will provide technical assistance. Swaziland is to receive EUR 120m (USD 158.2m) in the 2007 – 2013 period, which is part of the EUR 1.25 billion program to support the sugar sectors of Africa, Caribbean and Pacific (ACP) Sugar Protocol countries in the context of the reforms of the EU sugar regime. An EU press release said the Swazi sugar industry employs 35 percent of the agricultural workforce and contributes 18 percent to GDP. Annual production is over 600,000 tonnes and sales to the EU taking half of the Swazi sugar production. Two South African companies, Illovo Sugar and Tongaat Hulett (partner in the RSSC), dominate the manufacturing of sugar. The EU 2011 project will set aside EUR 19.5 million (USD 25.7m) to establish the Swaziland Sugar Facility, which will enable stakeholders to design and implement their own projects. The IUF affiliate SAPAWU that organises sugar workers, recently attended an information meeting held by the EU and will participate in the Sugar Facility. This is a result of the IUF Global Sugar project that supports unions taking part in policy discussions and participating in sector-related initiatives. IUF Global Sugar: Regional meetings in Durban, South Africa The IUF Global Sugar project in East and Southern Africa held two activities in Durban with delegates from six unions. The first was a Workshop for Women Workers focussing on creation of job opportunities for women in Sugar (16 & 17 April); the second, an Evaluation Meeting of the five-year project (18-20 April). Some twenty delegates participated in the latter; fifteen in the former. The agendas included a visit by women delegates to the Shukela Training Institute, which focuses on technical skills for sugar and other sectors, and a visit to the Durban Sugar Terminal. In addition to union reports to the Evaluation Meeting, there were presentations by the South African Bargaining Council for Sugar and the South African Sugar Association, as well as on FAWU's IT national program. Full reports will be available on the IUF Sugar site.

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/sugar/ 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).

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