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‘’Africa – Consumption, Trade and Investment opportunities’’
Presented by: Hassan Hashim Erwa Corporate Director Sales & Marketing
Kenana Sugar Company Limited – Sudan
September 8, 2017
2
Kingsman Asia Sugar Conference, September 7-8, 2017, Andaz – Delhi - India
Overview
Consumption trends
Africa sugar trade
Africa sugar industry challenges
Investment opportunities
Conclusion
Outlines
Overview
Consumption trends
Africa sugar trade
Africa sugar industry challenges
Investment opportunities
Conclusion
3
Kingsman Asia Sugar Conference, September 7-8, 2017, Andaz – Delhi - India
Overview
Consumption trends
Africa sugar trade
Africa sugar industry challenges
Investment opportunities
Conclusion
Sector Contribution to GDP Africa Emerging Countries
4
Kingsman Asia Sugar Conference, September 7-8, 2017, Andaz – Delhi - India
Overview
Consumption trends
Africa sugar trade
Africa sugar industry challenges
Investment opportunities
Conclusion
Africa Basic Info
UN Economic Commission for Africa Africa business Magazine
5
Kingsman Asia Sugar Conference, September 7-8, 2017, Andaz – Delhi - India
Overview
Consumption trends
Africa sugar trade
Africa sugar industry challenges
Investment opportunities
Conclusion
World Sugar Production, consumption by Region
8% 14%
6%
12%
25%
32%
3%
World sugar production by region Oct/Sep 2015-16, raw
value
EU
Europe
Africa
N. & C. America
South America
Asia
Oceania
9%
16%
11%
10% 10%
43%
1%
World sugar consumption by region Oct/Sep 2015-16, raw
value
EU
Europe
Africa
N. & C. America
South America
Asia
Oceania
• Africa total production in 2015-16 is 10,897 mln out of the world’s production of 174,636 mln raw value • Africa total consumption in 2015-16 is 21,044 mln of the world’s consumption of 179,757 mln raw value Source of data: F.O. Lichts -June 2017
6
Kingsman Asia Sugar Conference, September 7-8, 2017, Andaz – Delhi - India
Overview
Consumption trends
Africa sugar trade
Africa sugar industry challenges
Investment opportunities
Conclusion
World V.S Africa sugar trade (imports, exports)
83%
17%
Imports
World
Africa
95%
5%
Exports
World
Africa
• Africa total imports in 2015-16 are 13,966 mln mt out of the world’s imports of 71,955.2 mln mt • Africa total exports in 2015-16 are 4,054 mln mt out of the world’s exports of 69,035 mln mt
Source of data: F.O. Lichts -June 2017
7
Kingsman Asia Sugar Conference, September 7-8, 2017, Andaz – Delhi - India
Overview
Consumption trends
Africa sugar trade
Africa sugar industry challenges
Investment opportunities
Conclusion
Consumption trends
15.2 14.9
15.6
16.4
15.8 16.0 16.1
14.0
14.5
15.0
15.5
16.0
16.5
2010 2011 2012 2013 2014 2015 2016
Averages Of Africa Per Capita Sugar Consumption 2016
Highest Per Capita
Country (Kilograms)
Swaziland 48.5
Tunisia 39.6
Egypt, Arab Rep. 37.7
Gambia 37.4
Mauritania 37.2
Sudan 36.2
Algeria 35.3
South Africa 34.7
Morocco 34.6
Namibia 34.4
Lowest Per Capita
Country (Kilograms)
Congo, Dem. Rep. 3.5
Central Afr. Rep. 3.6
Burundi 4.2
Burkina Faso 5.1
Ethiopia 5.2
Liberia 5.2
Niger 5.5
Sierra Leone 5.5
Rwanda 5.6
Madagascar 6.7
ISO year book 2017
8
Kingsman Asia Sugar Conference, September 7-8, 2017, Andaz – Delhi - India
Overview
Consumption trends
Africa sugar trade
Africa sugar industry challenges
Investment opportunities
Conclusion
Africa self-sufficiency ratio
0.59
0.58
0.56
0.57 0.58
0.56
0.52
0.54
0.58
0.48
0.50
0.52
0.54
0.56
0.58
0.60
2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18
Africa Self - sufficiency ratio
Source of data: F.O. Lichts -June 2017
9
Kingsman Asia Sugar Conference, September 7-8, 2017, Andaz – Delhi - India
Overview
Consumption trends
Africa sugar trade
Africa sugar industry challenges
Investment opportunities
Conclusion
Africa is a sugar deficit region
10,125 10,233 10,295 10,964 11,294 11,336 10,897 11,685 12,714 12,418 12,689 12,961 13,232 13,504 13,775 14,046 14,318 14,589 14,861 15,132 15,404
17,140 17,562 18,427 19,119 19,594 20,357 21,044 21,473
21,963 22,756 23,381 24,006 24,631 25,256 25,880 26,505 27,130 27,755 28,380 29,005 29630.2
7,015 7,329 8,132
8,155 8,300 9,021
10,147 9,788 9,249 10,338
10,692 11,045
11,399 11,752
12,105 12,459
12,812 13,166
13,519 13,873
14,226
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
AFRICA SUGAR BALANCE
Production Consumption Deficit
10
Kingsman Asia Sugar Conference, September 7-8, 2017, Andaz – Delhi - India
Overview
Consumption trends
Africa sugar trade
Africa sugar industry challenges
Investment opportunities
Conclusion
Africa sugar trade
‘’African countries receive preferences from developed countries
under various (PTAs) preferential trading agreements. While maintain bilateral agreements with some countries ’’
• AGOA
• EBA/EU
• EU/GSP
• GSP
Preferential Trading Agreements
Bilateral and Regional Trade Agreements
• ECOWAS
• EAC
• SADC
Economic partnership agreements (EPA )
Tripartite Free Trade Area
11
Kingsman Asia Sugar Conference, September 7-8, 2017, Andaz – Delhi - India
Overview
Consumption trends
Africa sugar trade
Africa sugar industry challenges
Investment opportunities
Conclusion
Kenana sugar co.
12
Kingsman Asia Sugar Conference, September 7-8, 2017, Andaz – Delhi - India
Overview
Consumption trends
Africa sugar trade
Africa sugar industry challenges
Investment opportunities
Conclusion
African sugar Balance
10,125 10,233 10,295 10,964 11,294 11,336 10,897 11,685 12,714
17,140 17,562 18,427 19,119 19,594 20,357 21,044 21,473 21,963 4,000 4,165 3,853 4,841
-
4,795 4,054 4,121 4,397
11,080 11,591 12,734
13,482
13,009
14,081 13,966 14,308 14,119
-
10,000
20,000
30,000
40,000
50,000
60,000
2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18
Africa Sugar balance Oct/Sep -2009/10 up to 2017/18* (1,000 tonnes, raw value )
Production Consumption Exports Imports
Source of data: F.O. Lichts -June 2017
13
Kingsman Asia Sugar Conference, September 7-8, 2017, Andaz – Delhi - India
Overview
Consumption trends
Africa sugar trade
Africa sugar industry challenges
Investment opportunities
Conclusion
Africa sugar trade (imports, exports)
14
Kingsman Asia Sugar Conference, September 7-8, 2017, Andaz – Delhi - India
Overview
Consumption trends
Africa sugar trade
Africa sugar industry challenges
Investment opportunities
Conclusion
Africa negative trade will increase significantly up to 2025
African Development Bank:
15
Kingsman Asia Sugar Conference, September 7-8, 2017, Andaz – Delhi - India
Overview
Consumption trends
Africa sugar trade
Africa sugar industry challenges
Investment opportunities
Conclusion
Cane Growing
Technology
Infrastructure
Policy & Institutional
Africa sugar industry challenges:
16
Kingsman Asia Sugar Conference, September 7-8, 2017, Andaz – Delhi - India
Overview
Consumption trends
Africa sugar trade
Africa sugar industry challenges
Investment opportunities
Conclusion
Investment opportunities
Fulfilling the potential of African agribusinesses could open up markets worth more than $100 bn per year by 2025
African Development Bank
17
Kingsman Asia Sugar Conference, September 7-8, 2017, Andaz – Delhi - India
Overview
Consumption trends
Africa sugar trade
Africa sugar industry challenges
Investment opportunities
Conclusion
Transformative investment climate
Finance Accessibility: China Brazil India Regional institutions:
- African Development Bank - Arab Funds - Islamic Development Bank-Jeddah - Arab bank for economic development in Africa ( BADEA)
Adoption of innovative finance:
- Combination of private sector loan window plus public sector loan
- Supply credit facilities by emerging markets funds
18
Kingsman Asia Sugar Conference, September 7-8, 2017, Andaz – Delhi - India
Overview
Consumption trends
Africa sugar trade
Africa sugar industry challenges
Investment opportunities
Conclusion
Transformative investment climate
Market changes : Emerging of new African trade Area (TRIPATRITE) CFTA (2017) deficit of 8.1 mln MT GAFTA( Pan Arab Tree Trade Area) 11 mln MT EPA & GSP regimes
Resources : African agriculture sector represents only a quarter of the continent GDP ( 5%
growth) Water 600 million (ha) of Guinea Savannah - only 10% cultivated Exceptional from Bio diversity conventions
19
Kingsman Asia Sugar Conference, September 7-8, 2017, Andaz – Delhi - India
Overview
Consumption trends
Africa sugar trade
Africa sugar industry challenges
Investment opportunities
Conclusion
New global environment post 2008
I. Complex financial instruments have lost their luster
II. Food security is a real and found to be attractive investments
III. Evolution of new agricultural strategies:
Sustainable Business Models
Transformation from agriculture to Eco – systems models
IV. Re – innovation in the sugar industry and emergence of ‘’ cane industry concept’’
Enhanced added value chain of industry
Creating more profit through product diversification
20
Kingsman Asia Sugar Conference, September 7-8, 2017, Andaz – Delhi - India
Overview
Consumption trends
Africa sugar trade
Africa sugar industry challenges
Investment opportunities
Conclusion
Sugar Model
Source: Kenana sugar Co.
21
Kingsman Asia Sugar Conference, September 7-8, 2017, Andaz – Delhi - India
Overview
Consumption trends
Africa sugar trade
Africa sugar industry challenges
Investment opportunities
Conclusion
Sugarcane value chain Cane Crop
1 MT
Residuals
150 Kg
Baggasses
330 Kg
Molasses
35 Kg
Sugar
100 Kg
Green Fodder
150 Kg
Electricity
98 W/H
Ethanol
9 Liters
Animal Feed
2 Kg
Meat
12 Kg
Dairy Products
7.5 Kg Source: KETS
22
Kingsman Asia Sugar Conference, September 7-8, 2017, Andaz – Delhi - India
Overview
Consumption trends
Africa sugar trade
Africa sugar industry challenges
Investment opportunities
Conclusion
Estimated Revenue /Feddan
Product Quantity EST. Revenue (USD)
Sugar production 4.0 MT 2000
Electricity 3 MGW/hr 161
Green Fodder 7 mt 350
Molasses 2 Mt 160
Ethanol 520/ litters 286
* Average sugar price $500/MT
Source: Kenana sugar Co., White Nile sugar Co.
23
Kingsman Asia Sugar Conference, September 7-8, 2017, Andaz – Delhi - India
Overview
Consumption trends
Africa sugar trade
Africa sugar industry challenges
Investment opportunities
Conclusion
Africa is ready for sweet investments
1. Lower production costs
2. Fast growing domestic sugar markets
3. Special access to preferential markets (EU,EPA,GSP,…)
4. Adoption of trade liberalization and investments market:
Increasing flow of FDI
Bilateral investment treaties
New style of integrated industrial polices
24
Kingsman Asia Sugar Conference, September 7-8, 2017, Andaz – Delhi - India
Overview
Consumption trends
Africa sugar trade
Africa sugar industry challenges
Investment opportunities
Conclusion
Africa multiple sugar expansion plans
Sudan
• Sudan Arab food security initiative
Nigeria:
• Nigeria’s sugar master plan 1.6 mln MT
• Dangote group 1.5 mln MT
Ethiopia
• GTP 2,4 mln MT
Kenya
• KSP Plan
• Sugar sector privatization scheme
Tanzania
• SBT plan – to increase to 0.9 mln MT
25
Kingsman Asia Sugar Conference, September 7-8, 2017, Andaz – Delhi - India
Overview
Consumption trends
Africa sugar trade
Africa sugar industry challenges
Investment opportunities
Conclusion
Sudan/Arab food security plan
Source: KETS,
26
Kingsman Asia Sugar Conference, September 7-8, 2017, Andaz – Delhi - India
Overview
Consumption trends
Africa sugar trade
Africa sugar industry challenges
Investment opportunities
Conclusion
Other African sugar plans
Country Region Project MT
Burundi expansion plan of Susomo 40,000
Intergrated sugar project 350,000
Lamu sugar Project -
Rwanda - Sugar factory mill 100,000
Uganda - - -
Arjo-Dedesa, Kuraz, Tendaho
Walkaiyt, Belles,
Kassem ( new project under constraction)
Kawambwa sugar ltd project 120,000
Mazabuka (refinery project) 90,000
Rufijivalley, Ngerengere
Kigoma, Kilosa, Bagamoyo
Angola - Companhia de Bioenergia de Angola (BIOCOM) 260,000
Chkwe Intergrated project 420,000
Xinavane sugar Refinery 90,000
Benin ECOWAS Zenros Investments (PTY) ltd 100,000
Guinea ECOWAS Guinea Intergrated Sugar Project 300,000
Uinty Intergrated Sugar 60,000
Melat Project 110,000
Manglla & Aljur 100,000
Ghana ECOWAS Komenda sugar factory -
Mauritania MENA - -
Nigeria ECOWAS Dangote group, N. Master plan 1.5, 1.6 mln
Niger ECOWAS - -
Mali ECOWAS - -
Swaziland SADC Expansion plan bY 2022 100,000
3,273,400
Zambia COMESA / SADC
South Sudan -
900,000
Mozambique -
Kenya EAC/ COMESA
Ethiopia COMESA
Tanzania COMESA
Source: KETS,
Mahaseal
Agriculture Co.
27
Kingsman Asia Sugar Conference, September 7-8, 2017, Andaz – Delhi - India
Overview
Consumption trends
Africa sugar trade
Africa sugar industry challenges
Investment opportunities
Conclusion
Conclusion
Africa .. Economy in transformation:
• Innovative Financing of Agriculture through PPP.
• Increasing flow of FDI in food industry and distribution
• New regulations on :
Bio – fuel projects
Investments in co - generation projects
Adoption of integrated model by new projects .
• Africa represents a potential sugar cane production and investment world hub
• Malabo – Equatorial Guinea 2014 declaration by African Heads of States and Government has committed Comprehensive African Agricultural Development program (CAADP)
• Sugarcane is a unique crop with great potential in Africa
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Kingsman Asia Sugar Conference, September 7-8, 2017, Andaz – Delhi - India
Overview
Consumption trends
Africa sugar trade
Africa sugar industry challenges
Investment opportunities
Conclusion
“ It always seems impossible until it is done”
Nelson Mandela
Thank you