Sugar beet industry could create 5,000 jobs

SOME 5,000 jobs could be created by the revival of the sugar beet industry, according to a feasibility study by the Irish Sugar Beet Bio-Refinery Group.

The PWC-backed study is calling for the establishment of a bio-refinery plant in the southeast, which would produce sugar as well as ethanol from beet and grain.

The plant, which would be privately owned and run, would cost an estimated €350 million to construct. It is envisaged that 30 per cent of the finance would come from equity investment and 70 per cent from 15-year bank loans. The plant would be profitable within the first year, according to the study.

The revival of the sugar beet industry has been gaining traction over the last number of years, primarily due to the fact that the European Commission is to end its quota system at the end of 2015.

European sugar prices have also reached 30-year highs over the last year due to undersupply, hitting about €800 a tonne, with occasional price spikes of €900.

Ireland’s last remaining sugar plants, Greencore’s plants in Carlow and Mallow, closed in 2005 and 2006 following EU sugar policy reform. Irish sugar producers and processors received significant compensation.

Just over a year ago, a report by the European Court of Auditors found that the closure of Greencore’s Mallow factory was needless because the business was profitable at the time.

Under the proposal by the Irish Sugar Beet Bio-Refinery Group, the bio-ethanol plant would process 1.2 million tonnes of sugar beet, one million of which would be used to produce 154,000 tonnes of sugar, and the remainder used to produce ethanol.

This ethanol production would be supplemented by processing a further 56,000 tonnes of grain, as well as molasses, to produce 50 million litres of ethanol annually. Ethanol production did not form part of Ireland’s sugar industry before production ceased in 2006.

According to the proposal, the production of 50 million litres of ethanol would make an important contribution to Ireland’s target of 10 per cent bio-fuel substitution by 2020.

The Irish Sugar Beet Bio-Refinery Group – which includes former senior executives in Irish Sugar and Greencore, scientists from Teagasc and University College Dublin and farmer representatives – is proposing that the plan would only produce output for domestic consumption.

Most of Ireland’s sugar is imported from Britain. Earlier this year Ibec warned that suppliers were finding it difficult to source sugar.

Many farmers still grow sugar beet which is used for animal feed.

Asked whether an Irish sugar industry would be viable if sugar prices fell, Chris Comerford, former chief executive of Irish Sugar and Greencore and a group member, said the business viability of the plant is based on an ex-factory sugar price of €570 a tonne, a “conservative” figure.

“We have stress-tested the business at different prices for sugar and for sugar beet,” Mr Comerford said. “The viability and profitability of the business plan stands up to rigid analysis.”

Minister for Agriculture Simon Coveney has previously signalled his support for the revival of the industry but only if a sound economic and commercial case could be made.