The Sugar Saga: Navigating Market Supply Challenges in Gabon 2024 update
The acquisition of Sucaf by the Turkish conglomerate MFB International has marked a significant shift in the sugar industry of Gabon. This move, part of a broader strategy to nationalize the economy, has seen the Gabonese state initially taking control of Sucaf Gabon from the French group SOMDIAA, only to later cede 90% of its shares to MFB International. The transition has been a complex affair, involving strategic negotiations and a symbolic acquisition cost of 1 FCFA.
MFB International, now operating under the local subsidiary MFB Gabon, has committed to a series of strategic initiatives to stabilize the sugar market in Gabon. These include the importation of 10,000 tonnes of sugar per quarter to address the shortfall of the 2024 sugar campaign and an investment of 11 billion FCFA for the modernization of the production facilities. The commitment also extends to maintaining current market prices and employment levels and supporting the development of other agricultural and livestock activities.
However, despite these ambitious plans, MFB Gabon faces challenges in supplying the Gabonese market. The intricacies of logistics, production, and distribution have posed hurdles the company strives to overcome. The situation is compounded by the strategic importance of sugar as a staple commodity in Gabon, making any supply disruptions a national concern.
The state’s involvement in the acquisition underscores the importance of sugar production to Gabon’s economy and food security. The government’s swift action to prevent the collapse of the nation’s primary sugar producer reflects a commitment to safeguarding not only a key industry but also the livelihoods of its citizens.
As MFB Gabon navigates these challenges, the focus will be on its ability to fulfil its contractual obligations and ensure a steady supply of sugar to the Gabonese market. The success of this endeavour will likely have far-reaching implications for the country’s economic stability and the well-being of its population.
The unfolding events in Gabon’s sugar industry serve as a reminder of the delicate balance between national interests and the complexities of global business operations. It is a narrative that will continue to evolve as MFB Gabon works towards fulfilling its promises and solidifying its position in the market.
Four months after the official acquisition of Sucrerie Africaine du Gabon (Sucaf), the former Gabonese subsidiary of the French group Somdiaa, the Turkish company, MFB International, is struggling to supply the Gabonese market with sugar. This is why, according to EcoMatin sources, the managers of the MFB group “Les Sucreries du Gabon” were urgently summoned on August 2 to Libreville by the Minister of Commerce, SMEs and SMIs responsible for income-generating activities, Parfaite Amouyeme Ollame, wife of Divassa.
“Urgently summoned to the minister’s office to answer the question of the persistence of the sugar shortage throughout the territory several months after the acquisition of Sucaf Gabon but especially after multiple working sessions on the supply of the local market, Parfaite Amouyeme Ollame épouse Divassa says she finds the redistribution strategy of this essential product chaotic,” we learned from the Ministry of Commerce. The same source adds: “it is clear that there is a lack of sugar in large stores and legal commercial spaces, which meet the standards. On the other hand, this basic necessity ends up in the hands of retailers in the markets and sold at an exorbitant price contrary to the decisions taken by the State.”
During the meeting, the government member stressed that the price of a packet of sugar is 925 CFA francs and 1100 CFA francs in remote areas. She therefore invited MFB managers to be more calm and professional. Regarding the issue of employment, the minister recalled the principle of national preference. During discussions with the company, it was a question of maintaining the employment of Gabonese people and promoting their recruitment.
The MFB group has certainly committed to supply the local market with sugar, but this is not reassuring. Because this is not the first time that it has made promises to keep its commitments in this area. Indeed, the Minister of Commerce of SMEs-SMIs received the buyers of Sucaf Gabon on June 7. Faruk Basturk, head of MFB les Sucreries du Gabon, had then come to reassure the member of the government on the availability of sugar on the national territory in the coming days. 17,000 tons of sugar, according to MFB, were about to be delivered, to fill the deficit observed on a national scale. Not at all.
However, according to the contract that binds this company to the State, MFB must ensure coverage of the national market for 12 months by importing 10,000 tons of sugar per quarter, the 2024 sugar campaign not having been carried out by Sucaf Gabon. The Turkish group has also committed to making a minimum investment of 11 billion CFA francs for the rehabilitation and modernization of the factory and all production tools. Also, the purchaser will maintain the current price of sugar (925 CFA francs per kg: Editor’s note) on the domestic market; existing jobs at least under the same conditions; the development of other agricultural and livestock activities; and the development of small local producers. So many commitments that are slow to materialise.
Since April 26, 2024, Sucaf has been called “Les Sucreries du Gabon SA”. This change of name comes following 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. This operation of repurchase of Sucaf Gabon by the State, on the one hand, and the sale of Sucreries du Gabon to MFB Gabon, on the other hand, presents many advantages according to the Gabonese authorities.
According to Gabonese officials, the Gabonese economy will notably benefit from: the maintenance and modernization of an industrial tool within the country; the preservation of approximately 250 permanent local jobs; the payment of a good separation allowance to staff, without dismissal; securing the supply of sugar to the national market; the increase in sugar production and the diversification of activities; the abandonment by Makaron, a company under Mauritian law, member of the French Somdiaa Group and sole shareholder of Sucaf Gabon, of a debt of approximately 30 billion CFA francs.
