Al Khaleej: no expansion

Al Khaleej Sugar has issues of consolidation, exports and dumping on its mind currently

March 2015

Dubai’s Al Khaleej Sugar Refinery does not have any plans to expand at the moment and consolidation in the refining business is necessary for the industry to move forward, its managing director has said.

“At the moment we have to survive; no expansion plans,” Jamal Al Ghurair told Reuters in an interview at the Kingsman Platts Dubai Sugar Conference.

The refinery is not looking at any takeover targets at the moment but is open to the idea.

“We are open to the idea but there is nothing at the moment that is ready; it depends on what is the number, what is the price and what are the terms. This is theoretical at this stage but the market does need consolidation,” Ghurair said.

The company has 1.5 million tonnes of raw sugar, either stockpiled at the refinery or on its way to the refinery, enough to meet its demand until the end of 2015, he said.

“Currently we don’t need to import anything. It depends on the price as we have enough stocks. It can take us until the end of this year,”

The origin of the sugar is mostly Brazilian but Ghurair said he would look to buy Indian and Pakistani sugar once they become available on the market if the price is right.

Ghurair also said he expected the whites-over-raws premium, a measure of sugar refining profitability, to remain subdued for 2015 at a range of $50 to $60 a tonne.

“Overcapacity of refining will keep pushing the white premium down,” he said.

Al Khaleej would look to export its sugar to Europe when production quotas are lifted in 2017, if that is made practical.

Ghurair said that would exert pressure on European Union producers to stop dumping sugar. “If there is an opportunity we will be exporting at least to keep pressure on them not to dump on the market.”

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