Monday, September 19, 2011

Cargill to reverse fortune of sugar production

U.S. agribusiness giant Cargill Inc. says it is eager to expand its sugar operations in the country, hopefully by next year, to revive the sugar sector.

The firm intends to execute a US$100million sugar refinery plant with an initial capacity of 450,000 tonnes.

“We are excited to be making a contribution to Ghana's growing economy. We willincorporate some of the latest technology to ensure Ghanaian sugar-cane is processed to the highest standards.

“Ghana provides a sustainable conducive environment, and we want to operate here -- a very good market to be in for the long-term,” Jonathan Drake, President and Business and Unit Leader, Cargill Sugar, told Business and Financial Times in an interview in Accra.

Already, Cargill operates a 65,000 metric tonnes capacity cocoa processing plant in the eastern port of Tema, and has the potential to expand the capacity to 120,000 tonnes.

The facility - fully operational since 2008 - directly employs over 400 people (including permanent and contract staff) and indirectly employs many more, supporting Ghana’s economy.

“We aim to make Ghana a major sugar exporter and improve conditions in non-urban areas, especially where agriculture is prominent," said Drake.

Cargill trades raw sugar in bulk, white sugar in bags/containers, and ethanol from offices located in Geneva, Hong Kong, Minneapolis, Minnesota and Amsterdam.

The company originate sugar from the world’s leading sugar producing countries including Brazil, where it co-owns and operates a major sugar-export terminal.

Ghana is seen as one of the most political stable and business-friendly environments in Africa, but its sugar sector is virtually nonexistent -- although the Mills administration says it is determined to promote agro-processing in order to accelerate modernisation of agriculture and create over 300 projects by 2013.

The country’s two major sugar factories located at Asutsuare and Komenda collapsed after the overthrow of Ghana’s first President, Kwame Nkrumah, more than four decades ago.

Currently the 9th-largest importer of sugar in the world, the country spends about US$500million annually to import 300,000 metric tonnes of sugar.
Available data indicate that the country imported more than 450,000 metric tonnes through the port of Tema in 2010.

“We’ve had a number of discussions with Cargill, and we are facilitating all the necessary permits and other formalities for the establishment of the plant,” Kofi Sakyiama Antiri, Acting Director, Research and Investment Development at GIPC told B&FT.

“We have submitted their proposal to government, but there are number of issues that border on domestic interventions, which we believe government will work on.”
He noted that Cargill’s intention to set-up a sugar-refining plant in the country is a laudable move, adding that it will save the country a lot of foreign exchange in importing sugar and also create jobs.

Industry analysts say demand for sugar is rising at the rate of 2.3 percent annually, creating a huge local and regional market for potential investors.
Pharmaceutical and beverage industries are other potential markets for sugar and its by-products.

“We capable of meeting the demand in Ghana, and create opportunities for local cane farmers to sell their produce,” Drake said.

Drake noted that rural development provides Cargill with reliable partners to help its customers succeed.

For instance, he said, higher crop-yields and quality help ensure a dependable supply of inputs for our processing facilities.

“We’ve the right programmes and pricing mechanism that motivate the farmers to produce to meet our standard -- we will continue to invest in Ghana,” said Drake.

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