Feb 03 2016
Photo Credit:Reuters/Denis Balibouse
* New refineries coming onstream from Algeria to Oman
* Middle East, N.Africa demand growth at around 4 pct a year
By Maha El Dahan
DUBAI, Feb 3 (Reuters) – Substantial new refining capacity
for sugar coming onstream in the Middle East in the next few
years is far in excess of forecast consumption, the head of
Bahrain’s Arabian Sugar Refinery said on Wednesday.
“It is difficult to understand the logic behind two new
refining facilities with combined capacity of 1.75 million
tonnes in Saudi Arabia, for example,” Yves el-Mallat, chief
executive of the refinery, told a sugar conference in Dubai.
In Saudi Arabia, white sugar consumption is around 1.2
million tonnes annually, which is equivalent to the refining
capacity of Savola’s United Sugar Co.
Two new refineries are set to come onstream in 2018 in the
kingdom. The Al Reef sugar plant has a planned refining capacity
of 1 million tonnes annually and the Durrah refinery has 750,000
tonnes.
United Sugar Co also plans to expand its annual capacity by
500,000 tonnes by 2017.
“Can this swarm of refineries coming to the area be
justified I don’t think so,” he said.
The region’s refining capacity stands at 13.5 million
tonnes, while actual production is around 8.5 million tonnes,
according to Mallat.
Between 2016 and 2018, around 4.7 million tonnes of refining
capacity will be added in the region.
Mallat said another new project in Oman with a planned
annual capacity of 700,000 tonnes also seemed out of place in a
country that consumes only 100,000 tonnes a year.
“Exports to East Africa are hindered by tight regulations,
while Yemen has its own refining facilities,” Mallat said.
Consumption in the region is around 11.3 million tonnes,
with growth of around 4 percent a year.
Mallat’s views echo those of Jamal al-Ghurair, the
Dubai-based managing director of the world’s largest standalone
refinery, Al Khaleej.
Ghurair told Reuters on Saturday that there was spare
capacity already in the region of around 40 percent.
(Reporting by Maha El Dahan; Editing by David Brough and Dale
Hudson)
((Maha.Dahan@thomsonreuters.com; + 9712 4082101; Reuters
Messaging: maha.dahan.thomsonreuters.com@reuters.net))
Keywords: EMIRATES SUGAR/
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