Myanmar Sugar Development Public Co Ltd has secured state approval to invest $20 million in setting up a sugar mill in Kathar township, Sagaing Region, to produce sugar for local consumption and byproducts, power and ethanol.
The first phase of the mill construction and cogeneration plant is expected to be completed in a year and a half followed by another $20 million investment for the second phase, said Win Htay, managing director, Myanmar Sugar Development Public Co Ltd.
The crushing capacity of the mill is targeted at 5,000 tonne sugarcane per day to produce 500 tonne per day of white sugar.
“We are going to use sugarcane to produce quality sugar for the domestic market and produce electricity and ethanol out of the sugar cane byproduct. The current domestic sugar supply is 400,000-500,000 tonnes per year and has an annual shortage of 250,000-300,000 tonne. We hope to fill the gap,” said Htay.
The project will be located on an 83.95 acre land and a 70,000 acre sugar cane plantation within 10 miles of the area.
The project will also include building an ethanol plant that produces up to 35,000 liters per day and a cogeneration plant. The project also expects to produce between 80 to 100 tonne fertilizer. To cover the entire project cost, the company will need to raise a total of up to $65 million.
Established in 2013, the company tapped the IPO route through the over-the-counter market, starting with a K100,000 ($74) per share and later on, with K10,000 ($7.3) per share.
So far, the company has sold 300 shares and is targeting to raise K10 billion ($7.3 million) by issuing 1 million shares at K10,000 per share.
The company plans to have a rights issue and look other options like bank loans. It is currently in talks with a foreign bank, said Htay, who also is the vice chairman of the Myanmar Sugar and Sugarcane Entrepreneur Association. Htay has been in the sugar industry for over 30 years and leads his own business, La Min Thazin Co Ltd.
Together with Htay, Myanmar Sugar Development Public Co Ltd is led by chairman, Nyi Khin.
Challenges remain as the company is yet to come up with an answer for a deal with the government to sell up to 30 to 35 MW electricity produced out of their cogeneration plant.
“For future projects, we plan to consider contract farming to develop the sugar and sugarcane farming,” said Htay.