Reuters | Wed Sep 29, 2010
By Marwa Rashad and Mahmoud Abdul-Gawad
CAIRO (Reuters) - Egyptian private equity firm Citadel Capital said it was investing $40 million to grow crops in Sudan, where agricultural spending is increasing as the government moves to address food shortages.
Citadel is acquiring agricultural land under long-term leases of up to 25 years from Sudan's government via two subsidiaries, Sabina and Concord, company executives said at a business conference in Cairo.
Concord Chief Executive John Elgin cited, "A rapidly expanding local market, increasingly affluent population and the highly favourable fiscal environment", among the reasons Citadel chose to invest in the country.
Sudan's economy has been wracked by multiple civil wars, but a 2005 north-south peace deal brought new investment mostly from Asia and the Arabian Gulf, powering economic growth that is averaging 9 percent a year.
Sudan's annual shortfall in grain is estimated at 400,000 to 500,000 tonnes annually, Citadel said in a presentation.
The two subsidiaries aim to grow sugar, corn, cotton, wheat, sunflower and sorghum on 250,000 feddans (260,000 acres), said Sabina Chief Executive Peter Schurrs.
"Our $40 million investment is divided almost equally between Sabina and Concord," he told Reuters.
Elgin said he expected his company to start production within three years and that it aimed to produce 28,000 tonnes of sugar in 2015, rising to between 500,000 and 600,000 tonnes by 2020.
Schurrs said there was no immediate plan to export the food Citadel produces in Sudan -- "not in the short-to-medium term. Maybe in the longer term."
Over two-thirds of Sudan's population are employed in agriculture, the mainstay of the economy before oil production began in the 1990s.