Illovo will produce 200000 tons of sugar and 15000kl of fuel-blend alcohol

Illovo expands green power projects

FMCG SUPPLIER NEWS

Business Day - Jul 21st 2011, 10:00

ILLOVO Sugar, Africa’s largest producer, is growing its biofuels and power generation capacity as it expands production outside SA. 

The group, which has operations in six African countries, continued to make progress in becoming self-sufficient for power, as well as supplying power to national electricity grids, outgoing chairman Robbie Williams said at the annual meeting in Durban yesterday.

Mr Williams, 70, was chairman for 14 years, during which time Illovo grew from a South African-based company to an African group.

He said the commissioning of the major factory expansion and power co-generation project at Ubombo in Swaziland in April would provide sufficient electricity to cover all of Ubombo’s power requirements, while surplus electricity would be exported to the national grid via a commercial agreement with the Swaziland Electricity Company.

In the long term the project was expected to add more than 100000 tons of sugar to the group’s production capacity — in the year to March 31 sugar production fell 3% to 1,6-million tons on the year before.

A project in Mali to produce 200000 tons of sugar, 15000kl of fuel-blend alcohol and enough power to be self-sufficient and supply a small amount to the national grid, was receiving high-priority support from Mali’s government.

The remaining hurdle was project funding, but if all went to plan, the project would start towards the end of this year with first sugar production in early 2014-15, Mr Williams said.

Already, about 89% of Illovo’s energy requirements are produced from renewable energy sources, according to its annual report.

The main source of this power is bagasse — a byproduct after the extraction of sucrose from sugar cane — which is used as a boiler fuel at Illovo’s sugar factories.

In SA, molasses, a byproduct of the sugar manufacturing process, was used in the country to produce high-quality potable and denatured ethanol, Mr Williams said.

There were opportunities to expand the group’s involvement in this area in most of the other countries in which it operated, he said.

In the medium term, potential projects included potable alcohol at Kilembero in Tanzania and in Malawi, and ethanol for fuel alcohol in Malawi, Zambia and Mali.

Illovo’s cane production was expected to be about 250000 tons higher than last year at about 6,5- million tons. Sugar production was expected to be about the same as last year, with the overall negative effect of last year’s drought in SA being offset by production increases elsewhere, said Mr Williams.

The strength of the rand and local currencies was likely to continue to have a negative effect on sugar and downstream export revenue, as well as on the conversion of foreign subsidiary profit into rand, he said.