DOW JONES NEWSWIRES
South Africa-based AGZAM Project Developers Ltd. is planning to invest at least $251 million to develop a sugar plant and at least 15,000 hectares of sugar plantations in Zambia's southern province, the state-run Zambia Development Agency said late Friday.
AGZAM signed a memorandum of understanding Friday with the Zambian government for the project, which is expected to commence next month, Muhabi Lungu, ZDA director for investment promotion, said.
"This is one of the biggest investment projects so far this year," he said, adding that the project is expected to create at least 4,000 jobs.
At full capacity, the plant will produce up to 200,000 metric tons of sugar and 28 million liters of bioethanol a year. The company will also support the development of at least 3,000 hectares of outgrower plantations around the plant.
Output is expected to begin by 2013.
Zambia, Africa's largest copper producer, is trying to diversify its copper-reliant economy. Last year, Zambia Sugar PLC (ZSUG.ZM), the country's largest sugar producer, completed an 840 billion Zambian kwacha ($174 million) expansion project, which has since doubled its annual sugar-production capacity to 440,000 tons.
With domestic consumption estimated at 150,000 tons a year, Zambia Sugar PLC exports more than half of its sugar output, mainly to regional markets and the EU. The company is a unit of South Africa-based Illovu Sugar Ltd. (ILV.JO)
The company exported a total of 90,000 tons of sugar to the EU last year.
-By Nicholas Bariyo, contributing to Dow Jones Newswires; 256-75-2624615 bariyonic@yahoo.co.uk