DUBAI: Egyptian refiner Nile Sugar plans to increase its crushing capacity by over 40 percent next year to help meet strong demand in the country, its chief executive said on Sunday.
Egypt produces around 2 million tons of sugar a year but needs to import about a third of the 3 million tons it uses — a gap Nile Sugar hopes to tap.
"We are undertaking a de-bottlenecking process and plan to up capacity in our crushing line," Nile Sugar chief executive Ali Al Dajani told Reuters in an interview on the sidelines of the Kingsman Dubai sugar conference.
"We process 7,000 tons of beet sugar per day and we want to increase that to 10,000 tons in the coming year or so," he said.
The company refines Egyptian beet sugar in the crushing season from February to June and imports raw sugar, mostly from Brazil, to refine for the rest of the year.
Nile Sugar has a refining capacity of 1,200 tons of raw sugar per day. It operated at more than 100 percent capacity in 2011 producing around 305,000 tons of sugar.
"This was much needed in Egypt as there was a significant deficit in the market, if we hadn’t refined that amount the market would have faced a big problem," Dajani said.
Dajani said rising raw sugar prices on the international market last year deterred Egyptian refiners from importing much raw sugar because refined sugar sales prices in Egypt remained low.
He said the political turmoil that has gripped Egypt since last year had not significantly affected domestic demand for sugar but that consumption in the tourism sector had fallen.
"We did get affected but nothing really significant as sugar is one of the most essential commodities so it is resilient," Dajani said. "But demand did drop a bit because industrial use went down as for example tourism went down."
Tourism revenue in the country is thought to have fallen from $12.5 billion in 2010 to around $9 billion in 2011.
Nile Sugar, which is located in Nubariyah around 50 Km from the port of Alexandria, sells all of its production in Egypt.
Egyptian farmers are expected to plant 400,000 feddans (168,000 hectares) with sugar beet and 320,000 feddans with cane in the 2011/2012 season, in line with the previous season.
The North African country, which depends on the Nile river for almost all its water, plans to grow more sugar beet because it needs less water than cane. Beet is mostly grown in the Nile Delta region while cane is grown in southern Egypt.