Sudanese sugar firm to expand output to 500,000 T

By Opheera McDoom

KHARTOUM (Reuters) - The state Sudanese Sugar Company is renovating four existing factories to increase output to 500,000 tonnes of sugar by November 2013 and upgrade quality, the deputy general manager said.

Farouk Mahmoud told Reuters in an interview on Tuesday the company also planned three new factories with a total of 375,000 tonnes of capacity and had already secured funding of $260 million from China for one 125,000 tonne capacity plant with a refinery in the central Sennar state.

Sugar is a key commodity in Sudan, where the population is sensitive to price hikes. Africa's largest country by land mass must import to cover domestic consumption of 1.2 million tonnes a year.

"The plan for the Sudanese Sugar Company is first of all to increase the capacity of the prevailing mills ... to produce 500,000 tonnes of sugar per annum," Mahmoud said. "That means by extension vertically and horizontally for these four factories."

"This will complete in the coming three years ... we can speak about November 2013 ... it is self-financing," he added.

The company normally produces 350,000 tonnes of sugar a year, while Sudan's other sugar firm, Kenana, makes 400,000 tonnes, he said.

Mahmoud said the company had already upgraded two refineries to produce sugar, which meets the EEC2 quality benchmark set by the European Union. They have a current capacity of 2,000 tonnes of raw sugar a day and within two years could process 2,600 tonnes a day.

FIFTH PLANT

The deputy manager added that full funding was secured from China and work under way to add a fifth factory, which would be commissioned in November 2013 and would produce around 30 percent of its 125,000-tonne annual capacity. It could reach full capacity in either the second or third year of operation.

He said the company was hoping to secure financing for a further two new plants, maybe from India, to produce a combined 250,000 tonnes per year in the Gezira state south of Khartoum. Once funding is ensured, the two factories could be commissioned in 30 months, he said.

Meanwhile, the general manager of White Nile, which is owned by the state, Egyptian investors and 30 percent by Kenana, said on Sunday it planned to open a $1.1 billion sugar factory in Sudan next year with an initial capacity of 250,000 tonnes by November 2011 and a full 450,000 tonnes by 2012.

Sudanese Sugar and Kenana have imported around 520,000 tonnes of sugar in 2009/2010 to fill a gap in the domestic market, Mahmoud said.

A leaky dam in the east Sudan meant Sudanese Sugar lost some cane, and its production came in below par at just 300,000 tonnes, while Kenana's output was also lower than normal at 275,000 tonnes, he said.

"We have 80,000 tonnes in the pipeline ... coming from Saudi Arabia, Egypt and Syria", in Port Sudan for offloading, he said, but he could not give the price, saying only that it was bought in July at "market prices".

Kenana said it also had 40,000 tonnes at Port Sudan en route to Khartoum, which came from "regional markets".

These are likely to be the last Sudanese purchases until the November crop, as the country's sugar supplies now are sufficient until then, Mahmoud said.

He added production should return to normal next year.