Kenana Sugar Company (KSC)

Company Profile and History

The Kenana Sugar Company was incorporated in March 1975, and the factory commissioned five years later. Kenana is situated near Rabak on the eastern bank of the White Nile, 250km south of Sudan's capital, Khartoum. The rich alluvial soils of the Blue Nile flood plain, close to the course of the White Nile with its abundant surface water, are ideal for the cultivation of sugar cane which is currently established on some 100,000-acre of irrigated land.

The plan for a sugar-processing plant and cane estate was the brainchild of the late Tiny Rowland, whose Lonrho company already had extensive interests in Africa. In 1972 he and the Sudanese government signed an agreement to produce sugar. There was a long gestation period during which capital costs of US$1 billion had to be raised and the construction contracts signed, before the factory's foundation stone was laid in 1976. Four years later the plant began processing sugar cane and it was officially inaugurated in 1981. Production was initially for domestic consumption and it was not until 1991 that exports began.

Service industries for Kenana have sprung up in the immediate Rabak/Kosti area making it one of the most prosperous in the country. Nearly 100,000 people are estimated to be dependent on the project.

Apart from sugar production, a new generation of environmentally friendly Kenana products are being developed from timber planted within the estate - while Kenana charcoal has been uniquely created from a by-product of sugar production, bagasse. Kenana animal feed, with its high nutritional value, has also enjoys substantial export markets in the Gulf.

Most of the sugar that is exported goes to African and Middle Eastern states, as well as India and Bangladesh, and as far away as Europe. Molasses are sold to Britain and the Netherlands.

The KSC estate draws water for irrigation and processing. Six pumps raise the water 46 metres above the level of the river, sending it along a 40km canal to the plantation area. The sugar cane is fed by gravity by some 400km of smaller canals, which follow the contour lines of the estate. Around 7,000 million litres a day are needed for irrigation alone. The estate's generating station has a capacity of 53MW, making it the third largest electricity producer in the country.

Road and rail links have been established to Port Sudan and to main centres around the country. The estate encompasses a township complete with mosque, primary and secondary schools, a hospital, several satellite villages with primary healthcare facilities, and a vocational training centre with modern equipment and teaching aids

The factory crushes and processes more than 20,000 tonnes of cane a day.

The company subsidiary Kenana Friesland, an association with a Dutch company, is the largest supplier of dairy products in the country and produces milk, yoghurt and cheese. The company has another branch called Kenana Engineering and Technical Services (Kets), which is responsible for the management of various businesses, like White Nile and a mill in Nigeria, called Savana Sugar Factory. Kets is also participating in tenders for the construction of refineries in Kenya and Ghana.

In Country Location

Odeid Khatem Street, Al Taif Area, Khartoum, Sudan; Tel: +249 183-224703; Fax: +249 183-220563

Services and Products

Production of sugar and processed dairy products and cattle feed; provides consulting and engineering services to the agro industrial sector. Apart from sugar production, a new generation of environmentally friendly Kenana products is being developed from 20, 000 feddans of eucalyptus trees, planted within the estate-while Kenana charcoal has been created from a by-product of sugar production, bagasse.

Other projects in various stages of development include ethanol, floriculture, yeast, industrial alcohol and paper. Research has led to the commercial production of crops such as sunflower seeds, sesame seeds, sorghum, maize and peanuts.

Number of Employees

6,000 employees

The Kenana Sugar Company employs over 12,000 people, drawn from all regions of Sudan, with a further 4,000 seasonal workers also employed.

Financial Information

Annual revenue of approximately US$ 400 million

Market Share

The Kenana Sugar Company is the world's largest producer of white sugar. In Sudan there are five sugar factories. In the 2008/09 season the other factories, New Halfa, Genain, Assalaya, and Sennar together produced 342,000 metric tons. Kenana produced 420 metric tons in the 2008/09 season.

Production of the Sugar Factories in 2006 and 2007

Source:Sudanese Sugar Company, KSC

Business Objective

To grow the sugar industry in Sudan and to become one of the largest diversified companies in the world

Business Model

Kenana’s 10 year strategic plan focuses on: expansion of KSC’s business by following a diversification strategy focusing on related businesses; transformation of related by-products into revenue streams; maximization of KSC’s core business through operational development programmes; and continuously identify and captures opportunities.

Ownership of Business

The company is owned by a group of 11 shareholders, of which the Government of Sudan, with a 35.17 per cent shareholding, is the largest. Other shareholders include the Government of Kuwait, with 30.5 per cent, the Government of Saudi Arabia with 10.92 per cent, the Arab Investment Company with 7 percent, the state-owned Sudan Development Corporation with about 5 percent, while several other Arab and Sudanese trade and development organisations and local banks hold the rest of the shares.

Benefits Offered and Relations with Government

Sugar is considered as one of the major strategic commodities in the country. However policy formulation around the agriculture sector is still in a development stage. Within the framework of agricultural development, the state has drawn a plan to build infrastructure, develop agriculture, ease regulations, put economic-marketing policies that can compete in local and international markets; bridge food gap existing in the region and neighbouring countries.

Sudan has applied to join the World Trade Organization (WTO), and is currently negotiating its terms of accession to the organization. It started the negotiating process by submitting a proposal for accession. Sudan is currently undertaking reforms of its all commercial laws to bring all its trade-related laws, regulations and procedures into conformity with WTO requirements. The government of Sudan has also been implementing economic reforms since 1991 to restore economic growth and development. The modernization of the agricultural sector is one of the major areas of concern for these reforms. The liberalization of agricultural markets and subsequent abolition of price controls and export taxes reduced Sudan’s trade barriers. This process is further continued under the umbrella of the WTO after Sudan becomes a full member.

Sudan faces from time to time a difficult food security situation. With the very high dependence of the population on agriculture and a largely family structure of farming, how the ongoing reform measures, and how the global agricultural trade liberalization impact on the agricultural sector is of critical importance. Therefore, food security concerns - which essentially mean the state of the agricultural sector - are central to discussion of trade policy reforms.

Product Development

In October 2009 Kenana announced that it has signed an agreement with Beltone Financials in Egypt to establish a US$1 billion private equity fund management company that will be the first in Sudan and the MENA region to focus on agro industry projects.

The joint venture represents a breakthrough in Kenana's efforts to secure funds to finance the Grand Sugar Plan and is in line with Kenana's role in promoting high-potential agricultural initiatives in terms of the National Agricultural Revival Program.

Kenana expects the new fund management entity to attract investors from state funds, investment banks, investment companies, venture capitalists and high-net worth individuals in the MENA region and Sudan.

Also in October 2009, it was announced that Kenana will manage more than 300,000 acres of farm land in a profit-sharing scheme with farmers, will improve technology, mechanise farming and irrigation and introduce new products and crops. Initial investment would be US$100 million in the first year. Kenana said it would take 40 percent of profits, with 50 percent going to the farmers and 10 percent towards social schemes in the region such as building hospitals and schools.

In June 2009 President Omar al-Bashir inaugurated Kenana’s ethanol factory, built with 15 million euros in equipment from the Brazilian company, Dedini. The plant, which is already in operation, has daily production capacity of 200,000 litres of alcohol. The project is a joint effort between the ministry of Energy, Kenana Company and Giad Company.