French Sugar Firm To Shut Down Operations in Kenya and South Africa Amid Profit Decline
French sugar company Tereos Commodities has announced plans to shut down operations and stop sugar trading in Kenya and South Africa by 2020.
The announcement comes at a time when the firm has recorded a decline in profits in what was attributed to a surge in global sugar prices.
“Tereos Commodities is planning to develop its organisation in certain geographies.
“This would be achieved by closing its offices in South Africa and Kenya, and ending its sugar trading and distribution activities in these countries on March 31, 2020, at the latest,” the firm was quoted by Reuters.
While launching its physical operations in Kenya, the firm said that it will use the office as an avenue of expanding to the wider East African region
“The Nairobi sales office aims to increase distribution both in the Kenyan market and in neighbouring countries such as Rwanda and Uganda, which are structural importers of sugar. It is tasked with ‘exporting sugar, ethanol and starch products, particularly to countries in which the Group does not have any industrial facilities,” the firm said.
Local Sugar production in Kenya remains low following poor performance of the major sugar-producing companies including; Nzoia, Chemelil, and Sony Sugar.
While sugar production declined by 7 percent in the five months of 2019, Sugar imports climbed up 112 percent hitting 112,213 tonnes as compared to the same period last year.
Date by the Sugar Directorate indicated that sugar imports between January and May rose by 80,596.
“Overall sugar imports in January-May totaled 172,213 tonnes against 80,596 tonnes in the same period last year in what is attributed to depressed table sugar imports in 2018,” the report stated.
Sugar imports are mainly sourced from outside the East Africa bloc and the wider COMESA region and international markets like Brazil.
Tereos Commodities also has offices in France, Switzerland, Singapore, Brazil, and India.
Featured Image Courtesy: Standardmedia.co.ke
