Nigeria’s second sugar refinery, with a capacity of 720,000 tonnes a year, is due to start production in the first quarter of 2008 to meet growing demand, the plant’s owners said on Wednesday.

BUA Sugar Refinery, a subsidiary of privately-owned BUA Group, is 75 per cent built and will cost an estimated $250 million on completion, the company said. "We expect to commence a test run sometime in early 2008, with full scale production starting in the first quarter of 2008," BUA said in a statement.
The plant in the Lagos Tin Can Island Port should save Nigeria about $200 million on refined sugar imports in its first year of operation, the company said. The investment also should promote local cane production through a scheme where the company supports farmers to increase production, it added.

BUA said a 20 mw power plant is integrated into the project to supply uninterrupted electricity to compensate for erratic supply from the national power grid. Nigeria, Africa’s most populous country with a population of 140 million people, said in July it planned to cut refined sugar imports to 30 per cent of its 1.3 million tonnes annual demand in the next three years. The National Sugar Development Council said the inflow of 120.3 billion naira ($946 million) in new investment in the past eight years, most of which came from abroad, had helped revive the formerly moribund sector. Nigeria’s sole sugar refinery, Dangote Sugar, said in February it planned to expand capacity from 1.4 million tonnes a year to around 2.1 million tonnes by end-2008, to cater for an expected surge in domestic and regional demand.

Nigeria, the world’s eight biggest crude oil exporter, imports most of its raw sugar from Brazil and Europe. The government has been keen to curb dependence on imported sugar by privatising the formerly state-dominated sector.