Mauritius Sugar Firm Plans Higher Output In Tanzania

The merger will create the largest sugar milling company on the Indian Ocean island and help them better cope with tougher trading conditions since the European Union cut guaranteed prices.

"We are going to increase sugar production from 90,000 tonnes right now to 100,000 tonnes in the short term," Patrick d'Arifat, the CEO-designate for Alteo told a news conference on Thursday, without giving a more definite time frame.

Last month Deep River Beau Champ Limited (DRBC) and Flacq United Estates Limited (FUEL) said in separate statements the merger was in line with sugar sector reform.

Both companies are currently listed on the secondary market and would gain a place on the main section of the stock market.

Arnaud Lagesse, a member of the board of directors of Alteo said the combined value of the new entity would be more than 9 billion rupees ($291.73 million).

"This would place the company at the sixth place on the official market and it would be eligible to form part of the SEM-7," Lagesse said.

The sugar sector, a centuries-old pillar of the palm-fringed island's economy, has been suffering since the European Union cut its guaranteed price offered to exporters from the African, Caribbean and Pacific (ACP) bloc.

DRBC owns 4,000 hectares of sugarcane plantations on the eastern part of Mauritius with an annual production of 80,000 tonnes of sugar. Some 25,000 tonnes of the output falls under the special sugars category, which is raw sugar refined on the island to add value. DRBC also produces electricity.

FUEL grows sugar on 8,000 hectares of land, where it also generates electricity. It is also involved in property management.

The sugar business accounts for roughly 1.2 percent of Mauritius' $10 billion economy.

In Tanzania Deep River Beau Champ has had a presence through majority ownership of TPC since 2000. It grows 8,000 hectares of sugarcane to produce about 90,000 tonnes of sugar per year.