Reinvention’s the mantra for Mauritius’ sugarcane industry
A family walking through sugarcane fields in Mauritius (Source: www.lonelyplanet.com)
Sweet tidings for the sugarcane industry in Mauritius! Other top sugarcane growing nations are eager to take a leaf out of its book.
Take the case of Jacques d’Unienville, the chief executive of Mauritius sugar cane company Omnicane, who travelled half-way around the globe to the annual meeting of the sugar industry in Brazil – only to be confronted with the Mauritian factory model as a best-in-class case study.
Incidentally, since 1957 the Mauritian sugar cane industry has pioneered the industrial best practice of generating electricity from sugarcane’s by-product bagasse for sale to the national grid. The Mauritius factory model incorporates sugar cane plantations, sugar mill, sugar refinery, and a power plant for bagasse.
The Mauritius sugar industry has not only reinvented itself with modern plants but has also witnessed industry consolidation over the last two decades, with about 20 small and medium groups having come together under four large banners – Omnicane, Terra, Medine and Alteo. Also, the industry has moved up the value chain, exporting refined sugar for higher revenues, instead of the raw sugar which fetches lower returns. Besides, a decade ago, clunky raw sugar had to be exported in bulk, a destination at a time. With smooth white sugar making packaging easier, its containers form smaller shipments that can move across several locations with just one ship.
Looking at the far-reaching fame of Mauritius’ sugar sector, it is hard to believe that the industry’s survival was once under question. After the EU started phasing out support to the island nation, which, as a former European colony was covered under the so-called Sugar Protocol of the Lome Convention, Mauritius no longer enjoyed duty-free access to Europe or higher-than-market prices.
As Jean Noel Humbert, head of the Mauritius Sugar Syndicate says, with high prices no longer guaranteed, survival mandated that Mauritius move up the value chain. The firm, which sells all the produce of the island on behalf of the industry, pin-points this as the rationale for all sugar companies investing in refineries that turn raw sugar into its white counterpart.
However, there is still a silver lining to the cloud looming over the sugar industry. While the 2009 price was 40 percent below the hitherto guaranteed price under the older convention, Mauritius continues to benefit from preferential access to Europe.
Sugar cane was initially brought into the island nation by the Dutch to make liquor through fermentation. Sugar was first produced on a tiny scale in 1696 and really took-off from 1745 onwards under the French. The British promoted the industry at the expense of all other crops, resulting in a monocrop economy. When the island attained independence in 1968, sugar represented a third of the GDP and contributed 90% to export revenues. But, with economic diversification, sugar accounted for only 2% of GDP and 14% of the value of exports in 2008. Sugar cane, however, still occupies 40% of the area of Mauritius and has a vibrant, entrepreneurial culture focused on research and development.
Source: Financial Times
Omnicane was launched in July 2009 through a strategic re-branding of Mon-Trésor-Mon-Désert Ltd (MTDM), a long established sugar cane group in Mauritius whose origins can be traced back to the 1850s. Omnicane was among the first few firms to be listed on the Stock Exchange of Mauritius.
Omnicane’s main activities currently include the production of refined sugar (about 150,000 tonnes per year) and the generation of energy from bagasse and coal.
In 2009, a sugar refinery was set up at La Baraque with Brazilian technology necessitating an investment of R1,250 millions ($4 million). The refinery, with a capacity of 600 tonnes per day, will produce direct consumption sugar for the European market through a contract with the German firm Sudzucker which will last until 2014.
Among the new projects being planned by Omnicane is a wind farm of 22 MW with 22 turbines of 1 MW each for 2013, an ethanol distillery of an annual capacity of 22.5 millions litres for 2013, a new energy producing entity at La Baraque to cater for the energy requirements of the distillery and refinery with excess electricity to be made available to the grid, and a carbon burnout unit to treat waste from the coal power plants.
Source: Company Website
Mauritius Sugar Syndicate
The Mauritius Sugar Syndicate (MSS) is the commercial arm of the sugar sector in Mauritius and is responsible for the marketing and export of all the sugar produced locally. It is a private and independent organization governed by its members, all of whom are sugar producers.
In fulfillment of its role, the MSS ensures that all products supplied to the market are in strict conformity with the Quality and Food Safety norms and standards required by its customers. The MSS markets a wide range of unrefined direct consumption sugars designated as Special sugars comprising of products such as demeraras, muscovados, caster sugars and other types of free flowing and soft sugars. It also exports white refined sugar under a Long Term Partnership Agreement with the German group Suedzucker. The MSS is a Fairtrade certified organization and disposes of an annual tonnage of Fairtrade sugar for its export markets.
Of the 21,416 producers in Mauritius (2010-11), some 10,700 are registered directly with the MSS to receive their sugar proceeds. Another 10,500 sugar producers receive their sugar proceeds through the 157 credit cooperative societies registered with the MSS. The remaining 216 producers receive their proceeds through their appointed brokers or middlemen.
Source: Company Website