Sudan aims to counter crisis with $1 billion sugar plant

Reuters News
Posted: Jul 11, 2012 9:44 AM
Sudan aims to counter crisis with $1 billion sugar plant

By Mohamed Nureldin

NEAR ABU HEBERA, Sudan (Reuters) - Sudan started production on Wednesday at a much-delayed $1 billion sugar plant, its biggest industrial development for many years and a project the government hopes will help counter an economic crisis that is fuelling dissent.

The north African country has avoided the widespread social unrest that has ripped through the likes of Egypt or Syria, though tough austerity measures have triggered anti-government protests calling for veteran President Omar Hassan al-Bashir's government to resign.

The government is trying to cut food imports, which have fuelled inflation that rose to 37 percent in June and are eating into the state's dwindling budget.

Sudan lost three-quarters of its oil production - the main source of state revenues and dollars needed for imports - when South Sudan became independent a year ago.

Sugar is an important food item for the country's 32 million inhabitants, and boosting its production is a top priority. The country is one of the biggest African sugar producers but needs to import at least 400,000 tonnes annually.

At the launch ceremony, Bashir said the plant, which targets initial annual output of 150,000 tonnes, would help turn Sudan into one of the biggest sugar exporters.

He dismissed the anti-government protests.

"We tell those who are waiting... there will be no Arab Spring in Sudan. We have a hot summer in Sudan that will burn the enemies of Sudan," he said at the site of the plant some 170 kilometers (120 miles) south of Khartoum.

The White Nile Sugar Co was set up in 2004 but the plant's opening was delayed for several years, which Khartoum blamed on U.S. sanctions. Washington has imposed a trade embargo since 1997 for Sudan's role in hosting Islamist militants in the past.

The plant, in which Sudan's Kenana Sugar Co, owned mostly by Saudi Arabia, Kuwait and Sudan, is the biggest shareholder, plans an annual output of 450,000 tonnes of white sugar within three years.

The government hopes agricultural and mineral exports such as sugar, gold and silver will help replace oil revenues.

(Reporting by Khalid Abdelaziz and Ulf Laessing; editing by Keiron Henderson, John Stonestreet)