Another look at sugar beet

Press, 10 April 1987, Page 12

Another look at sugar beet

A sugar beet industry for Mid-Canterbury could be re-examined because of the availability of a cheap, basic plant for sale in the United States and rising world sugar prices. The director of Canterbury Sugar Development Company, Mr Fred Newton said the i available sugar beet factory on the East Coast of America is close to a port, reasonably

priced and some of the equipment is only five year old. Surplus freezing and fertisier equipment may also be available in New Zealand, which could all be put to good use in a sugar industry. The Cantebrury Sugar Development company commissed a 1985 feasibility study which was based on factory plant to be supplied from throughout the world. It involved very high capital outlay for a productive capacity which was beyond that which could be justified.

As well the cost of servicing the high capital input could not be justified. Low sugar prices then also worked against industry development, but prices had improved considerably since. The current assessment would be based on a stage one development at 20 per cent lower production capacity than that used in the original study. That would also reduce installation costs and capital requirements consider-

ably, thus giving more assurance of viability. Sugar retail prices went up through the $1 a kilgram barrier in February and projected increases through to 1988 meant beet sugar could be produced very competitively, according to Mr Newton. Abolition of the Sugar stabilisation and deregulation of the industry had also improved the lot for beet sugar developers. The Mid-Canterbury group was poised for assembly to attend to the re assessment of a sugar industry ba§ed on the availaibility of the plant on offer. However, tax on research and develoment funds was an area of concern.

Concerted effort by some Cabinet Ministers for relaxation of research and develoment taxation had unfortunately not yet been very successful. It will create some difficulties to assemble the necessary finance, and might create a need to consider other options, Mr Newton said of the future.