Arabian Gulf Region’s first sugar refinery Al Khaleej Sugar (AKS) has received permission to develop a factory in Spain, in a move to expand its operations outside the Middle East and North Africa (MENA).
According to managing director Mr. Jamal Al Ghurair, the Dubai-based company plans to begin construction on the factory in Merida next year. The agreement has been signed between its subsidiary Iberica Sugar and Spanish authorities.
The move comes as Al Khaleej seeks to expand to sugar-beet processing, with a factory in Egypt and another in Spain. The company’s raw cane sugar processing business in Dubai has faced thinner margins in recent years as a result of increased supply from the European Union and India, while some of its biggest markets opened factories of their own.
“We are doing a similar thing to what we did in Egypt,” Mr. Al Ghurair said, adding that the corporation had finally succeeded in expanding into Europe, after an unsuccessful attempt in the United Kingdom.
He further added that the new factory will require an investment of about $590 million and will produce up to 900,000 metric tons of sugar a year. “That’s about the size of the factory in Egypt that the Jamal Al Ghurair group invested in. The operations in Spain are expected to begin in 2024,” noted Mr. Al Ghurair.
Al Khaleej, which profits from refining raw sugar and redistributing it in the MENA region, has faced rising competition in the region. “It lost markets like Iraq as the country imposed a duty on white sugar imports after building its own refinery,” as per the reports.