Illovo Sugar Plans to Produce Ethanol From Molasses in Tanzania by 2013

Illovo Sugar Ltd. (ILV), Africa’s largest producer of the sweetener, plans to start making potable ethanol from molasses in Tanzania by 2013, Managing Director Graham Clark said.

“We have created an opportunity in Tanzania to produce ethanol from molasses” he said in an interview at the company’s annual general meeting near Durban today. “We will invest in an on-site production facility to turn the molasses into high-value alcohol.”

The plant will be situated at the company’s Kilombera operation in the south-central Morogoro region. The approval process is almost complete, and work on the distillery will start within a month with production expected to start in 2013, Clark said. The operation is expected to produce 12 million liters a year.

The plant is part of Mt. Edgecombe, South Africa-based Illovo’s plan to expand in other African countries to meet growing demand for sugar and sugar products and to reduce the company’s reliance on its home country, where less land is available for plantations. Potable alcohol is used in the manufacture of alcoholic drinks. The company already exports the product to as many as 80 countries from plants in South Africa.

Zambia, Mali

Illovo is also considering starting fuel and potable ethanol production in Zambia and may consider similar projects in Malawi, he said. A 15 million liter potable ethanol plant is being considered in Mali, where Illovo expects to start production in 2014 or 2015.

South Africa’s sugar production, which fell to its lowest since 1995, should rise this year because of better rain, Clark said.

In a separate statement Illovo said that Donald MacLeod has been appointed chairman of the company. Across the group’s operations sugar production in the current financial year is expected to be little changed from a year ago, the company said.

To contact the reporter on this story: Niki Moore in Durban at nmoore19@bloomberg.net

To contact the editors responsible for this story: Vernon Wessels at vwessels@bloomberg.net; Antony Sguazzin at asguazzin@bloomberg.net

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