Illovo to invest in new R1,4bn Mali mill, cogeneration plant

By Christy van der Merwe, Engineering News, 14 Nov 07

Sugar producer Illovo, in partnership with the government of Mali, on Wednesday announced the construction of a new factory complex in Mali, worth an estimated R1,4-billion.

The complex would consist of a new sugar mill with a sugar production capacity of 200 000 t/y, an ethanol plant, which would produce 15 000 kl/y, and an electricity cogeneration facility.

In addition, Illovo will also manage a government-sponsored agricultural development, to produce about 1,5-million tons a year of cane.

The Illovo board approved an equity investment of R394-million in the project. The company will hold a 70% stake in the industrial entity, with the balance held by private investors and the government of Mali. The total factory complex cost of R1,4-billion would be 40% equity funded and the balance debt-funded, the company stated.

Sugar production is expected to begin in 2009, reaching full capacity in 2011.

"This exciting investment fits with our strategy of expanding the group's production base in Africa, and to be the lowest-cost sugar producer on the continent," Illovo MD Don MacLeod said.

The company also said that its headline earnings a share were up by 7% to 81,3 c, and the group achieved headline earnings of R284-million for the last six months ended September. The company declared dividends of 33 c a share.

The sugar producer estimated that given normal growing and operating conditions for the remainder of the season, yearly sugar production would be up 9% to 1,875 million tons, and added that the main increases occurred in South Africa, Tanzania, Zambia and Mozambique.