Delta plans to increase sugar production to 300,000 tonnes in 2017

Mohamed Ahmed
4 Min Read

Delta Company, one of the largest sugar companies in Egypt, is planning to produce 300,000 tonnes of refined sugar over the coming year as it seeks to increase the production’s volume in the domestic market to benefit from the gap between supply and demand, according to Amin Fareed, the company’s chief financial officer.

Fareed emphasised that the sugar shortage will soon be resolved when the sugarcane harvest begins. The company also plans to begin manufacturing sugar from beets by February, while sugar prices are not expected to fall below EGP 6,000 per tonne.

He explained that the company signed contracts to purchase two million tonnes of beets from farmers, and will receive the first shipments to their Kafr El-Sheikh factory in February.

Fareed pointed out that the company produced roughly 127,000 tonnes of sugar this year, delivering most of it to the Holding Company for Food Industries at EGP 4,500 per tonne. The rest of its production was sold under instruction by the holding company to private sector companies at prices ranging from EGP 6,000-7,000 per tonne.

Fareed added that the company currently has a sugar stock estimated at 30,000 tonnes, owed entirely to the holding company, and plans to deliver it in the coming days at the agreed upon price.

Fareed also said that there are no updates regarding the resignation submitted by the company’s chairperson Abdul Hamid Al Safety, as a result of selling the sugar to the holding company at EGP 4,500 pounds per tonne. He explained that the delivery price of EGP 4,500 per tonne irritated workers in the company, specifically in the Kafr El-Sheikh branch.

The company allocates a small amount of its production for sale to local industrial companies at a rate of EGP 6,000-7,000 per tonne, under agreement with the holding company.

The Ministry of Supply obligated governmental sugar companies to surrender their entire stockpile and production to the public authority of supply, and not to sell any quantities in the free market. The Egyptian Sugar and Integrated Industries Company is the main supplier for the Ministry of Supply.

The sugar industry market is experiencing significant fluctuations in the Egyptian market, where the price has increased steadily over the past few months to roughly EGP 11,000 per tonne, compared to EGP 4,500 by the end of the first half of 2016.

Egypt produces an estimated 2m tonnes of sugar annually, while consumption is roughly 3m tonnes.

Fareed said the company plans on speaking with the Ministry of Supply in order to raise the purchase price of sugar, especially since the government decided to increase the price of beets, which has resulted in increased overheads for the company.

On the other hand, Delta registered a net profit of EGP 84.7m during the first nine months of 2016, compared to EGP 12.4m in the same period in 2015. According to Fareed, the growth in profits over the previous year is due to a high production volume and an increase in sales.



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