DUBAI: Saudi Arabia s Savola Group expects to start up a sugar refinery in Egypt in August and to further expand its Saudi facility to meet rising domestic and regional demand, a senior company official said on Monday.
Output from the 750,000 tons a year Egypt plant, a joint venture with companies including Tate & Lyle on the Gulf of Suez coast, will supply Egypt, Jordan, Lebanon and Syria, said Mohammad Hassan Ajlan, president of Savola s sugar division.
The disappearance of EU sugar from this market is an opportunity for us, Ajlan said on the sidelines of a world sugar conference in the United Arab Emirates.
Arab demand for sugar is growing at about 2.5 percent year, spurred by population growth and as economic growth boosts wealth, Ajlan said.
Middle East and North African nations consume about 13 million tons a year of refined sugar, of which 6 to 7 million tons is imported or refined from imported raw sugar, Ajlan said.
Egypt, the most populous Arab nation, is the biggest Arab consumer of sugar at about 2.5 million tons a year, of which 1.5 million tons is produced locally. The market is growing at about 50,000 tons a year, Ajlan said.
The Egypt plant, Savola s second, cost $90 million, he said. About half its output will meet domestic demand and the remainder is for export.
Savola, the Middle East s second-largest sugar refiner, is also expanding its 1 million tonne per year plant at Jeddah, on Saudi Arabia s Red Sea coast, by 20 percent in April.
It is considering further expansion to 1.4 million tons by the end of 2008, Ajlan said.
Saudi Arabia is growing. The population is very young, he added. The plant also meets demand in Jordan.
The Jeddah plant will shut for two weeks next month to link it with the new facility, with the shortfall in supply being met by stocks, Ajlan said. The Sudanese market for sugar of as much as 800,000 tons a year was growing very fast, Ajlan said.
The economy is improving. Oil revenue is coming in, Ajlan said.