Bloomberg News

Ethanol, Sugar Mill-Power Could Create Jobs, Tongaat Says

August 01, 2011

Aug. 1 (Bloomberg) -- Southern African countries could create 1.8 million jobs if they adopted similar regulations to Brazil governing the production of ethanol and electricity from sugar, the Chief Executive Officer of Tongaat-Hulett Group Ltd. said.

South African sugar companies such as Tongaat-Hulett, the second-biggest producer of the sweetener on the continent, are in talks with the government about the regulatory framework needed to foster growth in the industry. The Southern African Development Community, or SADC, is a group of 15 southern African countries including South Africa.

“The impact could be dramatic in terms of a regional opportunity,” Peter Staude, Tongaat’s CEO, said in an interview at the company annual general meeting in Tongaat, South Africa on July 29. About “1.8 million people would be employed in direct jobs in SADC. We are not just saying that, we have calculated it.”

In Brazil, the world’s biggest sugar producer, gasoline is 25 percent made up of ethanol, bolstering demand for the biofuel. South Africa is yet to legislate on whether ethanol should be added to motor fuel and the country’s first commercial bio-ethanol refinery is only due to start production in 2014. That plant will use sorghum.

“With this region exporting sugar there would not be an issue with food security,” Staude said.

Fiber produced as a waste product at sugar mills could also be used to generate power, he said. Many mills already generate electricity for their own use, he said.

“With some capital you can generate a huge amount of energy from the same amount of fiber,” he said. “Once the regulatory framework is in place, what will essentially happen is that the power-generating plants we’ve got at all our mills will be taken out and replaced with the latest technology that will generate substantially more electricity. A typical mill could generate 88 megawatts.”

--Editors: Antony Sguazzin, Karl Maier

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To contact the reporter on this story: Niki Moore via the Johannesburg bureau at vwessels@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net


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