I well remember the first seminar I attended as an undergraduate. The topic in question was marketing cereals. In his opening remarks, the first speaker, a consultant, said, in the sophisticated life we live in, we tend to overlook the obvious, in some instances take things for granted and park critical scrutiny at our peril. A pertinent point, like slipping over a banana skin, has a timeless quality. In the case of securing cane production tied to new build cane sugar projects, in the recent past, more than a few have been found wanting, mainly in countries where the culture of cane production hardly exists. Those tasked with due diligence on behalf of investors have either been woeful and or overtly optimistic about the issue of cane production and supply to the factory concerned. The fact that some recent projects have been derailed due to inadequate attention to cane supply suggests that it is simply taken for granted.
After all, it is easy to grow cane – just throw cane setts in a furrow and cover them up!
But as the project managers and investors have found to their cost, that is not all. Particularly where there is no extensive culture of cane growing, developing an infrastructure supporting it, as it transpires, is far more difficult. Cane growers need access to quality cultivars that will thrive in local circumstances. Propagated cane setts that are genetically pure, pest and disease free need to be produced for large scale planting and or provisions made to do this at the outset. Cane growers, particularly new to the crop be given extension support whether from agronomists from the factory or local research station. As for harvesting, will it be manual or mechanized? In the former case, is there a ready access to temporary labour in the area? These are some of the obvious questions that should be addressed prior to embarking on a new build cane sugar project. One would think so.
Alas, not when it comes to the following projects and announcements.
Company Azucarera San Buenaventura (EASBA) commenced operations of its new US$174 million sugar mill on 29th August, 2016. During the first campaign, the 7500 tonnes of sugarcane per day (tcd) plant, processed only 78,000 tonnes cane. On 14th August this year, the state President Eva Morales implored farmers to grow more cane. In the blueprint for the project, cane supply from 10,000 ha was deemed adequate to supply the factory. In 2016, only 1200 ha of cane was grown, rising to 1600 ha in 2017.
Last April, in Cambodia, a new US$360 million cane sugar factory opened. It has a capacity to process 20,000 tcd. But the mill had access to only 10,000 tonnes of sugarcane for processing in the first year. This year has fared no better, with the mill processing “more than double from last year” – this is still a fraction of its full capacity.
In Angola, Biocom commenced operation of its newly built sugar factory in 2014. It has the capacity to produce 256, 000 tonnes sugar when its fully operational in 2019. In 2011, the company claims to have started planting cane for the factory. In the first year, the factory was scheduled to produce 40,000 tonnes of sugar. This year, between end of June and mid-August, only 20,000 t of sugar was produced, i.e some 500 t sugar/day over the six or so weeks period.
In early 2016 in Ghana, the newly refurbished 1250 tcd Komenda Sugar Factory, built on the site when it was closed down in 1982, was scheduled to commence operations. But it has yet to process cane. Deputy Trade Minister, Robert Ahomka-Lindsay, appearing before the Public Accounts Committee of Parliament recently said lack of access to an appropriate variety of sugarcane was the central problem.
Over the past few years, press reports from Nigeria have been replete with major investment in the sugar industry. In 2012 the Federal Government drew up a new National Sugar Master Plan (NSMP) to become self-sufficient in sugar by 2016/17. Variety of projects were announced totalling US$2.8 billion. Fast forward to 2017, cane sugar production in 2016 was 25,000 tonnes, while the country’s three sugar refining companies have been given license by the Federal Government to refine 1.5 million tonnes sugar. Self-sufficiency target is now revised to 2023.
Alas, it is far easier to build sugar factories than to plan for cane production.