Convalescing earlier from a hefty uppercut, ACP countries now face one more severe blow. Sugar prices are expected to fall as low as 42%, starting next year, an extra courtesy of the European commission (EC). With a view to curtailing the drastic effects, at the request of the commission, the State has come up with an accelerated strategic plan for sugar over the next ten years.

The plan, devised by consultants Landell & Mills, at the request of the Mauritius Sugar Authority, was adopted at last Friday’s cabinet meeting. The industry should now be considered as a cluster, instead of focusing on sugar only.

The measures contained in the plan are twofold. First and foremost, the aim is to cut production costs through centralisation, the voluntary retirement scheme (VRS) and grouping of small planters. Secondly, the plan advocates massive investments in sugar by-products - molasses to produce ethanol, and burning of sugarcane fibre residue (bagasse) to generate energy.

In this new cluster, ethanol production will play an important part. The aim is to produce some 30 million litres in 2015 from molasses available locally and through imports later on. This new industry will have its hub in the region of Grand-Port/Mahébourg. According to the plan, ethanol will be mixed with petrol, the ultimate ratio being 25% in 2015.

<B>Centralisation, a keyword</B>

Through the first VRS, initiated by Pravind Jugnauth, the then minister of Agriculture, some 8,000 employees of the sugar sector have retired, with a lump sum and a plot of land. The plan suggests the retirement of 4,000 more workers, on the same terms and conditions as the first VRS. However, the age limit for eligibility has been lowered from 55 to 50 years for men, and 50 to 45 for women.

Centralisation is the keyword when it comes to sugar factories. The plan puts forward an acceleration of the process, with the number of factories falling from 11 to six by 2008. The MSA is already working on a global plan, in close collaboration with the private sector. Millers would be able to cut down prices through rationalisation of the delimitation of factory areas, cane distribution and transport.

In so doing, according to the plan, the surface under cane cultivation will fall to 65,000 hectares, for an annual sugar production of 550,000 tons in 2015. Presently the figures stand at about 575,000 tonnes for 72,000 hectares.

The reform plan, moreover, advocates an optimum use of bagasse in energy generation. In the long term, each of the six sugar factories will have its own power station, producing some 600 Gw/h from bagasse. Such a measure will entail the progressive elimination of coal imports, which stand at 440,000 tonnes annually.

Small planters are bound to group together with a view to cutting high production costs through mechanisation, new irrigation systems and more modern management. Dillydallying from small sugarcane planters would, slowly but surely, lead to their extinction.

Boosting productivity</B>