The talk was delivered by Mr Sebastien Giraud focused on the Mauritius Sugar Syndicate (MSS) as the central organization, its operations, strategic shifts, and sustainability initiatives to market the Mauritian sugar.
Key Themes & Ideas:
- The Mauritius Sugar Syndicate
- Purpose & Structure: The MSS, established in 1919, is a non-profit cooperative. Its primary objective is to maximize net export revenue for its member producers. All net revenues are distributed to these producers.
- Centralized Operations: The MSS acts as a centralized body responsible for marketing sugar, handling exports, logistics (approximately 15,000 containers), finance, and quality control. This centralization provides economies of scale, better bargaining power, and efficient management of diverse sugar varieties.
- Revenue Distribution: Producers receive a manufacturing premium based on the sugar type. Net revenue, after expenses, is split: 78% to planters and 22% to millers. Payments are based on an "ex syndicate price," an estimate used for initial payouts.
- Not-for-Profit Nature: As a non-profit, the MSS prioritizes maximizing export revenue to benefit local producers, rather than generating profits for itself.
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- Types of Sugar Produced in Mauritius
- Refined Sugar: White sugar produced by the Omnicane refinery.
- Speciality Sugars: A diverse range of unrefined speciality sugars, including wet varieties like muscovado, from mills like Terra and Aléo.
- Variety: 22 varieties of sugar are currently produced.
- Market Dynamics & Challenges
- Global Market Influence: White sugar prices are set by global markets, such as the New York and London Number Five exchanges, which are highly volatile. Diversification is crucial to avoid dependence on these commodity prices.
- End of EU Agreement: Prior to 2009, Mauritius had a guaranteed market with the EU at fixed prices. The dismantlement of this agreement forced the industry to focus on speciality sugars and exports.
- Mauritius transitioned to producing solely direct consumption sugars and increasing its capacity for special sugars to 120,000 tons annually. This change aligns with global market demands and allows Mauritius to tap into higher-value niche markets.
- Competition: The industry faces competition from other countries, including Reunion, Malaysia, Mozambique, South Africa, and the SADC region.
New Government-to-Government (G2G) trade agreements provide significant opportunities for Mauritius sugar exports, such as the Mauritius-USA : Yearly duty-free Tariff Rate Quota (TRQ) of 12,500 tons, with growth potential through enhanced TRQ. Mauritius-India : Gradual reduction in duties from 100% to 10%, with quotas expanding from 10,000 tons in Year 1 to 40,000 tons from Year 3 onwards.
- Production Vulnerability: Factors like drought can severely affect production; the industry faced a 25,000-tonne shortfall last year. Despite reduced crop harvests, Mauritius has maintained its export volumes by importing raw sugar feedstock to complement locally produced plantation white sugar. This strategy ensures consistent supply and meets international demand.
- Small Global Player: Compared to Brazil (37 million tonnes), India (32 million), and Thailand (11 million), Mauritius is a small player with a current production of 225,000 tonnes.
- Export Strategy & Market Diversification
- Global Reach: Exports to 65 countries, with approximately 120 clients globally.
- Diversification Shift: A strategic shift away from solely relying on white sugar towards speciality unrefined sugars.
- Market Expansion: Expansion into regional markets (COMESA, SADC) and the US, besides Europe, to mitigate risk.
- Quote: "The advantage of having several markets is that it allows us to diversify our risks and see which markets are the most profitable"
- Rules of Origin: Utilizing rules of origin for markets like Europe to mix Mauritian cane sugar with imported raw sugar (75/25 ratio).
- Marketing and Branding
- Retail Partnerships: Initial strategy focused on retail markets with established brands like Daddy and Billington.
- Own Brand Development: The MSS is developing its own brand, partnering with a Michelin-starred chef, to target the gourmet market as an alternative to white sugar.
- Geographical Indication: Unrefined sugars have been granted Geographical Identification (GI) status, similar to "Camembert de Normandie" enhancing value and authenticity.
- Consumer Education: Investing in social media and other channels to educate consumers about speciality sugars.
- Marketing Support: Offering marketing budgets to larger customers for better sugar promotion.
- Product Segmentation: Categorizing sugars into "natural," "classic," "authentic," "special," and "gem" categories.
- Value Proposition: Emphasizing traceability, wholeness, naturalness, taste, sustainability, health benefits, and convenient sourcing.
- Sustainability Initiatives
- Circular Economy: A strong emphasis on a circular economy with reuse, reproduction, and recycling of materials. For example, rocks from the fields are used to make roads and bagasse is used to power the national grid.
- Green Practices: Utilizing green agricultural practices to minimize environmental impact, avoiding the burning of cane before harvesting.
- Negative Carbon Footprint: A 2021 study by Sol credited Mauritius with a negative carbon footprint for its sugar production from field to port.
- Fair Trade: Focus on increasing fair trade partnerships to encourage small growers, given growing consumer awareness.
- European Union is demanding importations with sustainability requirements and fair trade benefits.
- Product Qualities and Differentiation
- Taste Profile: The taste is determined by molasses content, ranging from 1-2% in lighter sugars to 15% in dark muscovado.
- International Recognition: High quality is supported by international tasting awards.
- Health Benefits: Unrefined sugars have higher mineral content and antioxidants compared to white sugar. Rich in minerals, vitamins, antioxidants, and low glycemic index
- Traceability : Non-GMO, transparent production processes, rigorous quality standards, and accreditation to BRC.
- Wholesomeness : Free from artificial flavourings, colour additives, preservatives
Natural Taste : Renowned globally for their intense aroma and flavour, versatility, and suitability for various uses. - Sustainable Production Environment : Eco-friendly practices, low carbon footprint, Fairtrade/Bonsucro certification, and eco-friendly packaging.
- Challenges in Special Sugars face commoditization challenges, particularly in traditional markets: Mislabelling or misleading positioning of ordinary DC raw sugars as premium product.
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