STUDY ON THE SUBSITUTABILITY OF PLANTATION WHITE FOR REFINED IN REGIONAL

PRESENTED BY THOMAS EDMUND BELIZE OCTOBER, 2019 Outline

• Introduction • Technical Study • Case Studies • Conclusions and Recommendations INTRODUCTION

Objective of the Study

• Provide the CARICOM Secretariat and sugar stakeholders of the Caribbean an assessment of “the substitutability of Plantation White (PW) sugar for refined in regional manufacturing of beverages and sugar-containing products INTRODUCTION

Rationale for Study • Attempt to safeguard regional which is still very much of economic importance • Challenge that the domestic markets of sugar-producing countries are small in relation to their sugar output and the need to react • How? Value added processing INTRODUCTION

Rationale • Value added processing Belize – production of Plantation white (PW) and direct consumption  Santander Sugar Group (2016): Has capacity to produce 60,000MT of sugar (including PW) per crop and to increase this to at least 100,000MT with the intention of producing direct consumption sugar/PW over time. The group is also involved in co-generation and feeds electricity into the Belizean National Grid.  BSI/ASR Group: currently produces and supplies PW sugar which is used across all sectors in Belize. The plant will soon have the capacity to produce up to 100,000 MT direct consumption sugar. The entity also supplies electricity to the national grid. INTRODUCTION

Rationale • Value added processing

: Guysuco is actively investing in PW production with the aim of producing 50,000 MT within the next 12 - 18 months  Prospect of Jamaica and Trinidad being able to supply the region with refined liquid sugar which could be a cost efficient alternative to imported refined sugar  Planned investments by the three established sugar companies – BSI/ASR (US$30 mil) and Santander US$200mil for a new mill in Belize and Guysuco (US$70mil) in Guyana Technical Study Sugar Processing and Uses • Four major operations involved in cane sugar processing and include: extraction of raw juice, purification, evaporation, and crystallization. The end-product, raw sugar, is about 96.0-98.5% , which is further refined to remove the remaining impurities to the extent that the final product is 99.9% sucrose. • Used as a sweetener, filler and preservative. Sugar has major industrial use in bakeries, manufacturing of , pharmaceuticals, soft drinks, canned vegetable and dairy products. • Sugar makes up about 10% of the soft drinks content. It is reported that carbonated soft drinks account for 45% of sugar consumption in the industries. Technical Study

Sugar Quality for Soft Drink Industry

• Sugar quality features such as color, polarization, sulfur dioxide, iron, lead, arsenic, ash, moisture content, total suspended matter, invert sugar, turbidity, particle size, flocks, odor, taste, total bacteria, yeast and mould counts are commonly used to assess the quality of sugar for carbonated soft drink production. • These quality features are affected by many factors such as variety, maturity level of the cane, weather conditions, diseases, growing-harvesting conditions, cut-to-crush delay and by the processing technology used. Technical Study Plantation White Sugar • Plantation white, or mill white, sugar is a white sugar commonly produced for local consumption in - growing countries. It is produced at the factory where it is in some cases” re-melted and impurities (colour) removed and then re-crystallized. It is effectively refined – or what is referred to above as “direct white sugar”. • In some countries (e.g. Latin America, ), the sugar is produced without re-melting and refining of the raw sugar. Instead, sulfur dioxide gas (produced by burning sulfur in air) is injected into extracted juice, where it bleaches juice colorants, is oxidized to sulfate, and then is neutralized by the addition of lime. This is not the case in CARICOM. Technical Study Plantation White Sugar • Higher grades of plantation white are now being produced in some countries by a carbonatation purification process, in which gas (scrubbed flue gas) is injected into juice and reacted with lime to form calcium carbonate, which absorbs non- sugars and is filtered off. • As demand for high-quality white sugars increases among food processors and beverage manufacturers in tropical areas, the processes described above are being improved and replaced by “Blanco Directo” processes, in which colour-precipitating reagents remove colorants instead of temporarily bleaching them. Technical Study • Plantation White Sugar

• Direct White Sugar is white sugar produced at the sugar factor as opposed to a typical refinery where raw sugar is transported and processed to remove colour and impurities (Cortes 2007). These sugars can be produced the application of some or all of the new separation technologies such as membrane separation, the use of adsorbents, and chromatographic separation (Cortes, 2007, Rein, 2008). • The carbonated soft drink industries particularly have a high demand for refined white sugar which must meet strict quality requirements. In the CARICOM region, this refined (white) sugar in most cases is duty free. Technical Study

Use of Plantation White Sugar

• PW white sugar is known to be used for soft drink manufacturing in many jurisdictions including Belize, Guatemala, Ecuador, , India and the Philippines. • Some quality limitations in PW sugar can impair soft drink production processes and the final soft drink quality. Some of the common defects that can be related with poor sugar quality are formation of acid beverage flocs (ABF) {which shows as turbidly after floc formation which may take a few days}, other turbidity, alteration of flavor, color and taste Technical Study

Use of Plantation White Sugar • There are many reports of Plantation White (PW) Sugar being used in international markets with large sugar industries including Asia/Pacific, Latin American, Africa, and to a lesser extent, the Caribbean region. • Plantation White Sugar also called Mill White Sugar, based on where it is produced, is used with or without further treatment across many international jurisdictions including Brazil, India, China, Philippines, and Thailand. • The sugar is also widely used, for example, for direct human consumption and retail trade in countries like India, China, Indonesia, Philippines, East African community (based on reference to their Sugar standards), Latin America and Belize. • Specifications of a major multinational beverage producer (Bowen and Bowen in Belize) would allow sugar of colour less than 200 ICUMSA Colour units to be treated through hot carbon treatment or ion exchange to produce a liquid sugar that would meet the same quality requirements as a refined sugar with 35 Colour ICUMSA. Technical Study

Estimate of PW Sugar Used by Country and Manufacturer

Brazil Colombia Guatemala Mexico India Volume of PW Sugar 8.9 1.187 0.80 4.7 18.5 (million metric tons)/year

Top five purchasers Coca Cola Nestlé Nestlé Bimbo Nestlé of PW Sugar for Pepsi Bavaria Pepsi Nestle Mars food and beverage Nestlé Kraft Ambev Mondelez Mondelez production Ambev Kellogg’s Coca Cola Kraft Britannia Kellogg’s Pepsi- Cervecería Gallo Kellogg’s Division Technical Study

Classification Terminology for PW by Country Versus Belize

Classification/terminology used Brazil Colombia Guatemala Mexico India Belize for PW with reference to chemical and technical qualities

i) Maximum colour (X IU7.0) 130 - 250 400 400 - 600 400 - 600 150 ≤ 200 IU7.0

ii) Polarization (X °Z) 99.7 99.4 99.4 99.4 99.5 ≥ 99.5°Z iii) Ash Content (Conductivity <0.05 - 0.08 <0.05 - 0.08 <0.05 - 0.08 <0.05 - 0.08 <0.10 NA Ash: % m/m)

iv) Moisture (Loss on drying; % <0.08 <0.10 <0.06 <0.10 <0.10 <0.05 m/m)

v) Insoluble Matter NA NA NA NA NA ≤ 100 vi) Particle Size Distribution NA NA NA NA NA NA (mm) vii) Reflectance Colour NA NA NA NA NA NA Technical Study

Caribbean PW, Codex Standard and regional Requirements

Parameters ASR (Belize) PW Codex Regional Manufacturing Comments Sugar Specifications Requirements Polarization °Z ≥ 99.5°Z 99.5°Z 99.5 to 99.9°Z Mainly required by soft drink manufacturers Sulphur dioxide Not done since it is not 70 mg/kg (max) Preferably absent used Conductivity Ash (% Not regularly done ≤ 0.1 Not specified m/m) Moisture % (Loss on <0.05 ≤ 0.1 Varies but ≤ 0.06 drying) Color (IU pH7.0) ≤ 200 IU7.0 ≤ 150 IU7.0 Varies but ≤ 30; ≤ 40; and more generally ≤ 45 IU7.0 Insolubles (mg/Kg) ≤ 100 Not specified; Not specified but other standards generally varies; clear range from products would require ≤ 5 to 10mg/Kg; minimal insolubles; others up to ≤ 5 to 10mg/Kg; 150mg/kg Invert Sugar Content (% Not measured ≤ 0.10 ≤ 0.015 to 0.04 m/m) Reducing Sugars Not >0.04% NA NA

Molds < 10 CFU/10 g In keeping with ≤ 10 counts/10g max No issues reported Codex Application of Microbiological criteria for Foods (CAC/GL 21- 1997) Technical Study

Yeast < 10 CFU/10 g In keeping with Codex Application of Microbiological criteria for Foods (CAC/GL 21-1997) Mesophilic Bacteria < 200 CFU/10 g In keeping with Codex Application of Microbiological criteria for Foods (CAC/GL 21- 1997) Thermophilic Bacteria Not > 1000 CFU/10g In keeping with Codex Application of Microbiological criteria for Foods (CAC/GL 21- 1997) Total Coliforms Zero CFU/10g. Max In keeping with Codex Application of Microbiological criteria for Foods (CAC/GL 21- 1997) Fecal Coliforms Zero NMP/g In keeping with Codex Application of Microbiological criteria for Foods (CAC/GL 21- 1997) Guaiacol producing Bacteria Zero in 50g In keeping with Codex Application of Microbiological criteria for Foods (CAC/GL 21- 1997) Technical Study

Iron Not >1.0 mg/Kg Comply with ≤ 1ppm (mg/kg) Heavy metals are maximum limits particular important established by due to environmental Codex and cane production conditions

Copper Not >1.0 mg/Kg Same ≤ 1 to 2ppm Lead Not >0.1 mg/Kg Same ≤ 0.1 to 0.5ppm Arsenic Not >1.0 mg/Kg Same ≤ 0.1 to 1ppm pH (for 10 % m/m) Not specified NA Applicable to some; 5-7 Not generally specified (25% w/v) by many users

Particle size Not specified NA Not specified May vary and needs to be ascertained Technical Study

Comparison between PW (Regional), Codex and Regional Requirements • There are no major technical differences between PW produced in the region (Belize) and the Codex Standard which sets minimum requirements • Indeed the limits set for the various parameters are well within and are generally above those of the Codex standard as can be seen for key physicochemical characteristics such as Polarization, Colour, Sulphur dioxide (Sulphite content) not tested for as the process used for producing PW does not involve sulphitation; • With regard to the requirements of regional manufacturers, it can be observed that, except for colour, Caribbean PW sugar as with those from the comparator countries, would generally meet the quality specifications, as laid out • In the various comparator countries (e.g. Brazil), the use of PW sugar of 150 ICUMSA colour units is recommended for use to replace Refined white sugar of 45 ICUMSA colour units as it is more readily available and is a cheaper option. Technical Study

Comparison between PW (Regional), Codex and Regional Requirements

• The distinction also has to be made with regard to sugar as raw material in processing and how it is utilized. The specifications given by various regional manufactures for sugar of ICUMSA of 30 to 45 colour units is intended for direct consumption without any additional changes to the sugar. • In many processing operations, the sugar is made into a simple and sugar of 30 ICUMSA colour units and above can be used to make this simple syrup. Indeed, a simple syrup may or may not require clarification based on the colour of sugar utilized, on the product, and if the manufacturer is operating under franchise and there is a requirement for clarification as is the case for Coca cola for example. Technical Study

Comparison between PW (Regional), Codex and Regional Requirements

• The case can be made for the use of PW sugar of ICUMSA 150 to 200 IU7.0 as produced in Belize and in some of the comparator countries by utilizing a methodology for clarification of the simple syrup made from the sugar. • The determination has to be made as to which products require the use of white sugar of ICUMSA 30 to 45 colour units, which ones can use sugar above that threshold and substituting refined white for PW and at what cost of clarification for manufacturers requiring sugar of ICUMSA 30 to 45 colour units. Technical Study Use of Caribbean PW and its Impact on Regional Industrial Users

• Established that product categories including carbonated beverage, pharmaceutical manufacturers, canners and can be impacted by the limitations of PW sugar. • In the region, manufacturers have reported that the major product categories which require the use of refined white sugar include (i) soft drinks, juices and beverages including alcoholic beverages; (ii) some confectionery (including sweets); (iii) jams and jellies; (iv) bakery products; (v) dairy Products including ice cream. • Considered impact of the use of Caribbean PW, without additional treatment, with regard the soft drink/special beverages with a focus on five requirements Technical Study Use of Caribbean PW and its Impact on Regional Industrial Users

• Colour - ICUMSA 30 to 45 IU7.0 (ICUMSA:50 IU is the allowable maximum if the confirmation test shows that syrup gives no off- taste to products, and no colour to clear and lightly flavored beverages) This requirement is currently not being met by Regional PW and approval to use sugar of other specifications must be given by the franchise • Polarization - 99.8 to 99.9 °Z: Pol is a measure of sucrose purity and the higher the value the less impurities in the sugar. Carbonated soft drink manufacturers require > 99.9 °Z (USC, 2008). This requirement can be met by regional PW sugar which is ≥ 99.7°Z. It is noted that all carbonated beverages in Belize are made with PW at current standards which is comparable or better than Codex and other comparator standards, although some additional treatment is required by making a simple syrup and clarifying it to achieve ICUMSA of 30 to 45 IU. Technical Study

Use of Caribbean PW and its Impact on Regional Industrial Users

• Sulphur Dioxide (Sulfite Content): ≤ 6.0 to 15 ppm (mg/kg): The current regional PW sugar available does not have a value assigned to it for this parameter. This is because the process involved in making the PW does not involve bleaching with sulphur dioxide gas. • Insoluble material: ≤ 5mg/Kg to ≤ 7mg/Kg: The present value for insolubles in regional PW sugar is ≤ 100mg/Kg which at the upper limit would not meet the requirement of manufactures who produce clear products and some of which operate under franchise such as Coca Cola which would require minimal insolubles. Technical Study

Use of Caribbean PW and its Impact on Regional Industrial Users

• Turbidity: < 3.0 (50% w/w solution); < 1.5 (25% w/w solution) ≤ 20 ICUMSA colour units: The regional PW sugar does not specify a value for turbidity. Turbidity is important as it is one main parameter used to assess the clarification process performance because it is related to the presence of non-sugar, flocks and suspended formation contributing materials such as starch, dextran and other indigenous sugar cane polysaccharides, gums and proteins in the juice. The removal of turbidity indicates the removal of these components.

• In general the other requirements pertaining to heavy metals, microbial contaminants are in keeping with industry and manufacturer requirements. Technical Study

Food Safety Requirements • Food grade quality sugar for the regional and international markets is produced to the highest quality standards and subject to comprehensive quality management control systems • Some of these standards include the use of Quality management systems such as ISO 9000 family standards and the use of food safety management systems including HACCP (Hazard Analysis of Critical Control Point) Raw materials, meeting high standards is part of an integrated chain management approach in which the sugar industry is a leader. - • Sugar is also produced in line with Fairtrade standards, ensuring ethical sourcing • The industry is already often able to meet the standards of the benchmark traded sugar contract (number 5 market) which is 99.8°Z pol which represents the benchmark standard price for refined sugar which is at 99.8°Z pol. • Codex standard is not a customs based standard and makes room for some inconsistencies. As is currently the case in CARICOM, COTED accepts the HS codes for tariffs, not the Codex one which is consistent to global trade. Case Studies Case Study 1-Nestlé • Nestlé is a global brand and has regional branches but in addition has establishments in all the comparator countries identified. • The brand has been known to use PW sugar for more than 20 years in a whole gamut of products such as , cakes, cookies, floured drinks, etc. The PW sugar used is in keeping with international standards and colour ranging from ICUMSA colour units 150 to 220 • Nestlé is looking to standardize the use of Plantation White globally and in so doing would have establish specifications for the quality of PW required in addition to determining new or additional equipment for use of PW • The move by Nestlé to standardize the use of PW in all its operations would eliminate the need for a waiver to use PW in place of refined white and typically the sugar would be purchased in the country of operation if it is available • The financial implications to replace refined white with PW sugar would have been weighed given the conscious decision by the Brand to standardize the use of PW across all its global operations. Case Studies

Case Study 2: Citrus Products of Belize Limited (CPBL) – Belize

• CPBL has been using PW in its products that are not 100% juice since its establishment in 1986 • There is currently no need for any additional equipment or other investment as they currently have utilize a clarification process using a Sparkle Filter and this was based on an earlier investment. The process which is carbon based requires a change of filter every 3 to 4 years at an approximate cost of US$3,500 (Bel $7,000). • No unmitigated impacts for using PW currently. The products meet all shelf-life requirement of 6 to 9 months and are exported in the Caribbean region. • With regard financial implications, the major concern is competition with imported products and the cost of PW in Belize. Case Studies Case Study 3: A Comparison of PW Sugar Produced in Ethiopia to Refined White for use in the Carbonated Soft Drink Industry (Engida et. Al. 2013) • This case study addresses the use of PW sugar in an international market and how it compares to refined white sugar for the soft drink industry and present a perspective on the quality requirements vis-à- vis required specifications. • The plantation white sugar samples met some quality requirements of the carbonated soft drink manufacturers, but there are considerable limitations, particularly on polarization, Sulphur dioxide, color and insoluble matters. • The study is reflective to what pertains in the region and it is proposed that a certain element of research and development to support the improvement of PW sugar in the region. In particular there should be a focus on cane production practices, environmental conditions and soil types and sugar cane variety in addition to sugar processing technologies. Case Studies Case Study 4: Bowen and Bowen Ltd - Belize • Bowen and Bowen is a leading manufacturer in Belize which produces carbonated soft drinks, isotonics and juices. Uses only PW sugar and has been doing so over the last 40 years. • The company apply specific standards for the use of this Plantation White Sugar. Those standards are applied uniformly across all products. • The requirements are the Coca-Cola International Quality Specifications and Requirements for the Purchase of Plantation White Sugar. The most indicative attribute is that Color must be below 300 ICUMSA units. Microbiological specifications are within food grade tolerance since the PWS must undergo a Hot Carbon Clarification Process prior to use in final products. • In terms of quality the company notes that its products meet all internal, local, and international quality standards including the Coca-Cola Company Final Product Specifications. Case Studies Case Study 4: Bowen and Bowen Ltd - Belize The processing operations for utilizing PW are as follows: Product Dissolution: Granular Plantation White Sugar is dissolved in product water in batch sized vessel. Product Hot Carbon Clarification: Solution is heated in dissolution “cooking tank” in the presence of a specific quantity of virgin absorptive carbon powder and Celite diatomaceous earth for two hours. Product Filtration: Entire batch solution is filtered through specified porosity Celite filter media with continuous filter media body feed. Product Storage: Solution is held in storage tank for a maximum of 24 hours before use in final beverage. The above process adds approximately 4.7% to the acquisition cost of the Plantation White Sugar in our internal system. Case Studies Case Study 4: Bowen and Bowen Ltd - Belize • Cost measured by consumption per ton of PSW (dependent on acquisition quality); Energy: 4930 BTU per kilogram of PWS Activated Carbon: 0.002 kg per kilogram of PWS Filter Aid: 0.006 kg per kilogram of PWS Overhead: Dependent on internal administrative overhead Labor: Dependent on local per hour rate and operational requirement of CAPEX investment Depreciation: Dependent on CAPEX investment and financial per annum internal depreciation specification. • The company noted that while the investment has paid fir itself many time over, the initial investment and additional operational costs would have been avoided. Conclusions & Recommendations

• Plantation White Sugar can be, and is being used across the industrial food and beverage sectors, regionally and internationally either as direct consumption sugar or with some additional treatment to meet in particular colour requirements • There are many as indicated in the case of Jamaica that would be prepared to invest in liquid sugar, provided the CET was applied not to undermine that investment. • Noting that Coca Cola has approved the use and clarification of PW sugar syrup including equipment to be used) in some countries, including Belize, Guatemala, Educator, it can be reasonably assumed that some assistance would be given as necessary. • A critical consideration is the investment required by some (not all) food and beverage manufacturers for clarification and testing of a simple syrup made from PW to bring it down to ICUMSA 35 to 45 IU. Conclusions & Recommendations

• Investment in improved technology (retrofitting existing sugar mills) to facilitate the production of PW sugar particularly to meet colour and sucrose purity levels is required. • Sugar producers and other private sector entities to explore option of production of liquid sugars. • Recognizing the potential impact that the use of PW could have on the region, there is need to follow up on the international trends of research and development in improving the quality of PW sugar even if regional PW meet the required standards. • Develop and finalize a requisite standard for regional PW White and developing capacity to monitor the requirements of the standard Conclusions & Recommendations

• Regional producers of PW should seek to better address technical specifications of sugar supplied and making available the necessary supporting documentation pertaining to analysis, conformity assessment, and material safety data sheets (MSDS), etc.

• Any move to substitute refined white sugar for PW would require closer collaboration between producers and manufacturers. As such some capacity should be developed to monitor what happens within the trade, including data collection on quality issues that may arise and as necessary address corrective action. Thank You!!!