Farm Ireland

Saturday 17 March 2018

Beet industry lobby groups to join forces

Declan O'Brien

Declan O'Brien

The two groups working to get the Irish sugar industry back up and going are to join forces and launch a joint initiative.

At a public meeting in Athy last Thursday, Michael Hoey, head of BEET Ireland and chief executive of Country Crest Foods in Ashbourne, Co Meath, confirmed that he is to meet his Irish Sugar Biorefinery Group counterpart, Chris Comerford, next Monday.

There is a growing consensus within both camps that a combined effort to restart sugar production here would have a better chance of success.

The Irish Sugar Biorefinery Group is to publish its feasibility study this week and it is expected that the report will be broadly positive.

More than 250 farmers turned out for the Athy meeting -- the second of three such meetings which are being organised by Beet Ireland.

The business plan behind the BEET Ireland plan was set out by Chris Harmon, the financial controller at Country Crest.

He said the group aimed to build a modular plant which would grow production in a staged basis to a final target of processing 1.8m tonnes of beet.

The aim is to initially target the domestic sugar market -- which is estimated to amount to 150,000t of sugar and costs Irish businesses €200m a year -- and then expand output to 250,000t. The plant would also produce 1.25m litres of bio-ethanol as well as running a 50Mw power plant.

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The facility would eventually need 30,000ha of beet, with growers being paid €40/t and transport being priced at €7/t.

Getting the project up and going will cost more than €400m, 50pc of which will be financed through bank borrowings, 28pc by grower investment and 22pc from private equity sources. The business would be 30pc owned by the growers and 70pc by the private equity investors.

Mr Harmon said the business plan was based on sugar prices remaining above €600/t and bio-ethanol at 80c/l.

Simon Cross, of Cross Agricultural Machinery, Rathangan, Co Kildare, maintained that oil prices would have to drop below $70/barrel (it is currently at $109/barrel) for sugar prices to fall to €600/t.

Farmers can buy a 400t beet supply contract for an investment in the business of €25,000.

Mr Harmon said such an investment would provide a return of 6.5pc. The projection is for 4,500 grower contracts to be issued.

Mr Hoey added that BEET Ireland had held very positive discussions with both Bank of Ireland and Ulster Bank in relation to funding the project.

He said the banks also expressed an interest in financing individual farmer investments in the venture at what he described as competitive rates.

When asked if the farmer share of the business would be capped at 30pc, Mr Hoey said he would be happy if farmers had a controlling stake but it would depend on their willingness to invest in the plan.

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