The project is scheduled to be complete by 2016 and will be located in Sharkiya Governorate, one of Egypt's main sugar beet growing region, with more than 25,000 hectares given over to the crop. The plant, designed by German consultancy IPRO, will be able to process 12,000 tonnes of beet a day.
“The signing of this agreement represents a significant chapter in [Al Nouran Multitrading's] history. We are successfully adopting our vision of full integration of the sugar value chain, which will not only consolidate our business presence but will also enable Egypt to cut back on sugar imports significantly,” said M Ashraf Mahmoud, founder of Al Nouran Sugar parent company Al Nouran Multitrading.
The company estimates this increase in Egypt's domestic sugar production capacity will allow the country to cut sugar imports by 25%. The plant's production of around 100,000 tonnes each of molasses and animal fodder per year, primarily for export, will also help support Egypt's balance of payments.
Opportunity in deficit
Al Nouran identified two main opportunities which the new facility will be able to exploit, according to a company statement. First, Egypt has a current sugar deficit of 1 million tonnes a year, which is expected to grow in line with the country's 2% annual population growth.
According to the statement, the second opportunity is ”the regional deficit which exceeds 18 million tons annually (Middle East and Africa), coupled with the recent change Europe’s sugar subsidy system, which has led many sugar players in EU to shutdown, changing Europe’s position from a net exporter of sugar to becoming self-sufficient [or a] net importer for the foreseeable future”.
Banks behind the financing for the plant include Banque Misr, Bank Audi, and Abu Dhabi Islamic Bank. They are contributing US$129m of credit directy, and have sourced an additional US$85m from other institutions.