Al Nouran’s long-term and growth-oriented strategy which effectively utilizes its diverse scope of operations will be a springboard for the entire regional sugar market.
ANS’s strategy is fundamentally geared towards meeting market needs by shrinking the wide disparity between supply and demand, both domestically and regionally.
There is no discernible difference between sugar refined from sugar beets and that from sugarcane. This, plus its water efficiency, has helped the sugar beet enjoy significant growth as the source of sugar production capacity in Egypt’s agricultural trends over the last 20 years.
In addition to these macro considerations, the sugar beet is also a security crop for farmers, because:
The seeds are pre-financed by the sugar factories.
The harvest is contracted in advance.
Quality and cleanliness are manageable and add to the premium per ton.
Farmers receive a lump-sum cash payment two weeks after delivery.
The leaves can be sold separately as animal fodder, or used as organic matter to improve soil.
On newly cultivated land, the sugar beet optimizes soil quality by absorbing salts.
The sugar beet can be grown using all irrigation methods, from flooding to dripping.
It is a winter crop, grown during Egypt’s approximately six months of cool and cold weather, which allows farmers to use the land to plant traditional summer crops.
It has the potential the raise its yields from 18 tons to 40 tons per feddan.
Throughout the majority of its history, the Egyptian sugar industry has been largely dominated by the public sector and primarily dependent on sugarcane production. However, changes in the demographics of the country, coupled with an over-extension of agricultural resources, led to a stagnation in the industry. As such, Egypt began cultivating sugar beets in 1982, with the by-products from the production and refining processes being used to produce animal feed as well as food industry constituents.
But simply diversifying the range of crops did not meet the demands of the country’s ever-expanding population, which has risen from the 1980s onwards. Furthermore, a number of economic factors such as an improvement in living standards, an increase in the average family income and urbanization have contributed to driving demand beyond the capabilities of either the public or the private sector, the latter of which has significantly increased its presence in the market since 2010. As of 2013, Egypt’s domestic production of white sugar stood at 2 million tons per annum, while consumption grew to 3 million tons per annum. This deficit of 1 million tons – projected to continue growing by 2% annually – is offset by increasing imports. However, being subject to currency fluctuations, inflation, variable energy prices and climate conditions, these imports are unsustainable and are a significant driver of inflation in sugar prices.
Al Nouran Sugar (ANS) aims to capture the upside of this growing market, whose potential is not limited to Egypt. The Middle East accounts for 19% of all global sugar imports, presenting an opportunity for any neighboring country with a surplus of white sugar. Moreover, demand for fodder, molasses and other byproducts are on the rise in Europe.
With favorable free-trade agreements between Egypt, North Africa, East Africa and Arab countries already in place to support the export of white sugar and its byproducts, the export potential for ANS remains very high. Further advantages include wide governmental support as sugar is a staple in the food production industry, in addition to the availability of land for growth in the cultivation of sugar beets, which require relatively minimal water consumption.
ANS plans to leverage its competitive advantages with these opportunities to boost the production capacity of the local and regional markets while attempting to supply net importers, and it plans to do this in a sustainable manner which ensures the continued well-being of the local community. It plans to achieve this by:
Building a state of the art factory utilizing the most advanced means to produce the highest quality white sugar that meets international standards.
Leveraging the strength of its partners, whose collective experience offers ANS a unique insight into sugar manufacturing, agriculture and access to trade partners and retail customers, in addition to the sourcing of raw materials.
Further expanding its growth potential by mechanizing beet cultivation and adopting new applications.
Fully capitalizing on the facility’s geographic location, which offers an ideal temperate climate, access to fresh-water resources and a well-developed support infrastructure that includes easy access to transportation arteries and utilities as well as proximity to logistical and export hubs of the Suez Canal and Mediterranean Sea.
Developing access to regional and international markets.