Turkey’s MFB acquires Sucaf Gabon from France’s Somdiaa
In a significant move within the African sugar industry, Turkey’s MFB International has acquired a majority stake in Sucaf Gabon, previously controlled by France’s Somdiaa, for a symbolic one franc. This transaction marks a pivotal shift in the sugar sector of Gabon and reflects a broader trend of international investment in African agribusiness.
Sucaf Gabon, which has been the sole sugar producer in Gabon for nearly 25 years, faced operational challenges that led to a halt in sugar production for the year 2024. The Gabonese government stepped in to purchase all assets from Somdiaa and subsequently partnered with MFB International, granting them a 90% stake in the newly named Les Sucreries du Gabon SA.
The deal was formalized on April 26, with the presence of high-level officials, signaling the government’s commitment to revitalize the nation’s sugar industry. MFB International’s investment plan includes an injection of 1 billion CFA francs (approximately 1.6 million USD) to rehabilitate and modernize the production facilities[2]. This investment aims to secure the domestic sugar supply by importing 10,000 tons of sugar quarterly over the next year, compensating for the missed sugar campaign of 2024.
The acquisition is expected to have several positive outcomes for Gabon’s economy. It promises to preserve around 250 local permanent jobs, provide a good separation indemnity to the staff without layoffs, and ensure the national market’s sugar supply. Moreover, it plans to increase sugar production and diversify activities, moving beyond the previous operations that marketed white and brown sugar under the brand “Princesse Tatie.”
This strategic partnership between the Gabonese government and MFB International could serve as a model for other African nations seeking to attract foreign investment while maintaining control over critical industries. It also highlights the importance of international collaboration in addressing local market challenges and ensuring food security.
The acquisition of Sucaf Gabon by MFB International for a nominal fee underscores the potential for significant investments in exchange for long-term commitments to local economies. It reflects a growing confidence in the African market and a willingness to engage in ventures that promise mutual benefits for the investing entities and the host countries.
For Gabon, this deal represents not just a financial transaction but a hopeful step toward economic stability and growth. It is a testament to the resilience of the Gabonese sugar industry and its potential to thrive with the right partnerships and investments.
The acquisition of Sucaf Gabon by Turkey’s MFB International is a significant development for Gabon’s economy and its sugar industry. This move is expected to bring several key benefits:
1. **Revitalization of the Sugar Industry**: The investment from MFB International is set to modernize and rehabilitate the existing sugar production facilities, which is crucial for the revival of the sugar industry in Gabon.
2. **Employment Opportunities**: The deal ensures the preservation of around 250 local jobs, which is vital for the economic stability of the communities dependent on the sugar industry.
3. **Food Security**: By securing the domestic sugar supply through planned imports, the acquisition addresses immediate food security concerns and reduces dependency on foreign sugar.
4. **Economic Growth**: The influx of foreign investment can stimulate economic growth, providing a boost to the local economy through increased production and potential exports in the future.
5. **International Partnerships**: The partnership between the Gabonese government and MFB International serves as an example of how foreign investment can be structured to benefit local industries and economies.
Overall, this acquisition represents a strategic move to stabilize and grow Gabon’s sugar industry, with broader implications for economic development and international business relations within the region. It’s a step towards enhancing Gabon’s position in the global market while ensuring the nation’s self-sufficiency in a key commodity.
The acquisition of Sucaf Gabon by Turkey’s MFB International is poised to have a substantial impact on the local sugar market in Gabon. Here are some potential effects:
1. **Increased Production Capacity**: With the planned investment to modernize the production facilities, there is an expectation of increased efficiency and higher output. This could lead to a more stable supply of sugar in the local market.
2. **Job Security and Creation**: The preservation of existing jobs and the potential for new employment opportunities as the industry expands can contribute positively to the local economy.
3. **Price Stabilization**: A more consistent and potentially increased supply of sugar could lead to more stable prices in the local market, benefiting both consumers and businesses.
4. **Quality Improvement**: Investment in modernization might also lead to improvements in the quality of sugar produced, which can enhance the competitiveness of Gabon’s sugar in regional markets.
5. **Market Confidence**: The involvement of a foreign investor can increase market confidence, potentially attracting more investment in other sectors of the economy.
6. **Reduced Import Dependency**: By aiming to meet domestic demand through local production, Gabon could reduce its reliance on imported sugar, which is often subject to price volatility.
7. **Economic Diversification**: The diversification of activities beyond the production of white and brown sugar could open up new market segments and revenue streams.
8. **Sustainable Practices**: There is also the potential for the introduction of more sustainable agricultural practices as part of the modernization process, which could have long-term benefits for the environment and the industry’s sustainability.
Overall, the acquisition is expected to bring about positive changes that could strengthen the local sugar market and contribute to the broader economic health of Gabon. It represents a significant step towards self-reliance and economic resilience in the face of global market fluctuations.
The formalization of this operation took place on April 26, 2024, at the Presidency of the Gabonese Republic, in the presence of General Brice Clotaire Oligui Nguema.
Sucrerie Africaine du Gabon (Sucaf), a subsidiary of the French group Somdiaa, will now be called “Les Sucreries du Gabon S.A”. This name change follows a contract for the sale and acquisition of shares for 1 symbolic franc of Sucaf Gabon by the Turkish group MFB International, through its subsidiary MFB Gabon. The officialization of this operation took place on April 26, 2024, at the Presidency of the Republic, in the presence of General Brice Clotaire Oligui Nguema.
According to official information, the new buyer will control 90% of the new sugar company. In return, MFB will cover the national market for 12 months by importing 10,000 tonnes of sugar per quarter, as the 2024 sugar campaign was not carried out by Sucaf Gabon. To this end, we learn, that MFB Gabon has already placed the order for sugar for the next quarter.
The buyer will make a minimum investment of 11 billion CFA francs for the rehabilitation and modernization of the plant and all production tools. Also, the buyer will maintain the current price of sugar (925 CFA francs the price per Kg: Editor’s note) on the domestic market; existing jobs under at least the same conditions; the development of other agricultural and livestock activities; the development of small-scale local producers.
Finally, the State requires that the functions of the Director General and Director of Human Resources be reserved for qualified persons of Gabonese nationality. In this vein, the state will have two seats on the company’s board of directors.
Benefits, depending on the state
According to the Gabonese authorities, the takeover of Sucaf Gabon by the State, on the one hand, and the sale of Sucreries du Gabon to MFB Gabon, on the other hand, has many advantages for the Gabonese economy, including the maintenance and modernization of an industrial tool in the interior of the country; the preservation of approximately 250 permanent local jobs; the payment of a separation indemnity to the staff, without dismissal; securing the supply of sugar to the national market; increasing sugar production and diversifying activities; the waiver by Makaron, a company incorporated under Mauritian law, a member of the French Somdiaa Group and sole shareholder of Sucaf Gabon, of a claim of approximately 30 billion CFA francs.
Sucaf Gabon, created in 1998 following the privatization of the Société Sucrière du Haut-Ogooué (Sosuho), has been part of the Somdiaa group since 2010. The only sugar mill in Gabon, the company operated nearly 4,400 ha of sugarcane plantations before being allocated an additional 8,751 hectares of land by the government in Haut-Ogooué (southeast) in 2020. But despite this, this producer of white and brown sugar, dedicated exclusively to the Gabonese market and marketed under the brand “Princess Auntie”, has recorded heavy financial losses in recent years due to logistical difficulties, and projects on hold.
