A planned one-million- tonne-capacity sugar refinery in western Syria could dominate the regional market by undercutting refined sugar imports, its majority shareholder said on Monday.
Najib Assaf has struck a long-term deal to import raw sugar exclusively through Brazilian supplier Crystalsev for the refinery, and market the refined product in Syria, Lebanon, Jordan and Iraq using his own fleet of trucks and ships.
The $80 million refinery, Syria's largest private investment in years, is due to come onstream toward the end of 2007.
The four countries at present import mostly bagged white (refined) sugar to meet consumption estimated at 2.1 million tonnes a year.
"Importers (of refined sugar) will simply not be able to compete. Lifting of European subsidies for sugar has also raised our comparative advantage," Assaf, a leading Syrian businessman with interests from banking to commodities, told Reuters.
"We chose to rely on Brazil because they can virtually meet any demand swiftly," he said of Crystalsev, which is a shareholder in the project and controls 300,000 hectares of sugar cane plantations.
A European Union plan to slash sugar regime price supports from later this year is expected to trigger a slide in EU refined sugar exports and encourage investors to build more refineries in the Middle East.
Another Syrian businessman, Tarif Akhras, said earlier this year he was building a 600,000-tonne-capacity refinery in central Syria that will start operations in 2007.
Regional traders said the market could absorb two refineries if the security and political situation allows export flows to Iraq, which consumes one million tonnes a year.
Syria, which has taken steps to lessen decades of state control over the economy, has one full-time sugar refinery owned by the state that processes 100,000 tonnes a year. The country consumes 700,000 tonnes of sugar a year, rising by an estimated five percent annually.