Roadmap for the Sugarcane industry

> Roadmap for the Sugarcane industry

(posted on 19/9/05)


A Roadmap for the Mauritius Sugarcane Industry for the 21st Century

 

The document outlines Governments’ measures to enable the sugar sector to face the unprecedented challenges it is confronted to.

 

The program states that Government will considerably strengthen its diplomatic endeavors vis-à-vis the EU and WTO in order to safeguard the economic interests of the country in the context of the reform of the EU sugar regime and of WTO negotiations. More specifically, it undertakes to restructure the sector namely by: : 

(i)             promoting fast track modernization and diversification of the sugar sector to convert the sugar industry into an efficient cane industry geared towards the production of sugar, high value added sugar, by-products and energy;

(ii)            promoting the optimal use of bagasse, molasses and an increased production of special sugars;

(iii)            instituting a consultative mechanism including all sugarcane stakeholders with the aim of introducing a democratization process in order to bring necessary reforms to the sugarcane sector;

 

 Expected  evolution of the sugar industry from 2005 to 2010  

Feature

 2005

2010

Sugar Production (t)

575,000

550,000

Export Mix

Basically bulk raws

Fair share of bulk raws and direct consumption sugars

No. of Sugar factories

11

6

Area under cane (ha)

72,000

65,000 (including 5,000 ha in difficult areas)

Electricity- from bagasse (GWh) 

325

600

- from coal (GWh)

425

1 100

Ethanol from molasses (M lt)

-

30

Cost of Production

Medium

Low medium

 (iv)  ensuring broader participation of small planters in sugar milling as well as in energy production to make it easier for small planters to purchase and sell agricultural lands;

 

(v)  ensuring that reforms aimed at reducing production costs are carried out in ways that are socially acceptable;

 

(vi)  ensuring the survival of small planters and invest Rs 2 billion in derocking and irrigation schemes for small planters over the next 5 years;

 

(vii) setting up a Land Swapping System to facilitate financing of the modernization of the sector as well as regrouping of small planters; and

(viii)  reviewing the financing mechanism of the sugar cess with a view to better adapt it to the needs of the industry. 

In order to achieve the above objectives, the program has clearly defined the projects which need to be implemented, as well as their cost and time line (see table below). Such restructuring projects, which will require investment totalling Rs 23.5 billions, should be implemented, for most of them, during the 2005-2010 period so as to allow the sector to be prepared well in advance of the price cut which, as proposed by the EU Commission last June, would be fully implemented as early as 2009.

 

More importantly, these projects would need funding under the EU Action Plan on Accompanying Measures for Sugar Protocol countries affected by the reform of the EU sugar regime. The EU Commission has proposed Rs 1.4 billion (Euro 40 million) for all 18 Sugar Protocol countries for 2006. The quantum for remaining period (2007-2013) will be known at the beginning of next year with the finalisation of the EU Financial Perspective 2007-2013.

 

 

                           Objectives, cost and time line for projects                            

Project

Expected output

Cost estimate Rs billion

Starting date

Expected completion

Field operations, Regrouping of small planters, derocking/irrigation/mechanisation 

Enhance competitivity in particular of small planters

4.3

2005

2015

Support to production in difficult areas

Maintenance of production in socially and environmentally sensitive areas

1.0

2015

Centralisation of factories

Moving from 11 to 6 factories

2.5

2006

2008

Power Plants

Doubling electricity production from bagasse and commissioning 182 MW of power plants

8.3

2007

2011

Ethanol Production

To optimize use of molasses

Not yet known

2006

2015

Labour, social and welfare measures

Ensure socially sensitive approach

1.7

2006

2008

Research & Capacity building

Moving to an intelligent industry and fully tapping the biomass potential of the cane plant

0.5

Ongoing

Ongoing

Restructuring of cess

Reducing the Cess by 50% and rationalising the use of cess funds

0.9

2005

2008

Debt servicing

Financial situation reviewed

2.4

2005

2007

Contingency

1.9

Total

23.5

 

 

Full document at http://www.gov.mu/portal/goc/moa/files/roadmap.doc