KHARTOUM: Kenana, Sudan’s biggest sugar producer, plans to more than triple its ethanol output within two years to become a major biofuel exporter and intends to make a stock market offering in South Africa, its managing director said.
Kenana, which is mainly owned by the governments of Kuwait, Saudi Arabia and Sudan, is aiming to more than double its annual sugar output to 1 million tonnes by 2015 as the firm seeks new export markets such as South Sudan, Mohamed El Mardi El Tegani said.
Sudan, one of Africa’s biggest sugar producers after Egypt and South Africa, wants to cut dependency on imports of sugar, a big ingredient in Sudanese food, which makes prices of the commodity politically sensitive locally.
The Khartoum-based company plans a major expansion to diversify into “green products” such as bio fuel, fertilizer and animal feed to satisfy rising demand at home and abroad.
Boosting sugar and biofuel production would help Sudan overcome the loss of most oil reserves with South Sudan’s secession in 2011. Oil used to be the main source for dollars needed to fund imports of sugar or petrol.
Kenana wants to boost its annual production of biofuel to 200 million litres by 2015 from 65 million, of which 50 percent would be exported. While currently 95 percent of its output is being sold to the European Union, Kenana launched this month a partnership with Nile Petroleum, one of Sudan’s biggest oil distributors, to roll out ethanol at petrol stations.
“There is a big potential for production in Sudan,” Tegani said. “It improves the environment. Cost-wise definitely ethanol is cheaper than the normal gasoline,” he said. Sudan is cutting down on fuel subsidies fuelling a budget deficit. To fund its expansion, Kenana expects to get $500m in a capital injection this year from its main shareholders, he said.
To raise more the firm plans to make next year a 25 percent an initial public offering with a primary listing in Johannesburg and secondary listing in Dubai, he said. Kenana has appointed Russia-focused Renaissance Capital and Dubai investment bank Shuaa Capital to manage the offering.
He gave no details but the firm said last year it planned to raise around $200m. It had previously eyed an offering in Hong Kong late last year but given up the plan due to US sanctions deterring firms around the globe to deal with Sudan.
Reuters
