Zambia to set up $150 mln sugar plantation

JOHANNESBURG, June 14 (Reuters) Spanish and Indian investors are competing to invest in a 0 million sugar plantation Zambia plans to set up this year, a senior official said on Wednesday.

Zambia Investments Centre (ZIC) acting director general Chalimba Phiri said a feasibility study had been concluded on the Luena sugar plantation in the north of the country, which will process sugar and by-products such as ethanol.

He said it had also drawn interest from a local business consortium.

''We are set to take off with the project this year and it has attracted a Spanish company and some Indian investors who are currently on site checking out many things,'' Phiri told Reuters in Johannesburg, where he was attending a Zambian investment conference.

''The plantation will have the capacity to produce 250,000 tonnes of sugar,'' he added.

Luena has 100,000 hectares of virgin land of which only 30,000 hectares will be used for growing and processing sugar while the rest had been earmarked for growing other export crops, Phiri said.

REDUCING POVERTY Luena will be Zambia's second biggest sugar producer after Zambia Sugar Plc, majority owned by South Africa's Illovo Sugar.

Phiri said the government had committed million for infrastructure such as roads, health institutions, schools, water and power for the surrounding community.

''The rest of the money will come from the investor that will be selected. We have very good bids and we should be selecting one some time this year and construction should immediately start,'' Phiri said.

Phiri gave no details on when actual production of sugar would start.

He said the Luena project was in line with the government's efforts to diversify the economy away from copper mining as it tries to create jobs and reduce poverty.

Phiri said the investor picked for the project would grow cane on a 10,000-hectare farm while 20,000 would be for small-scale farmers on an outgrower scheme to be supported by the investor.

''It will have great impact on reducing poverty and raising incomes of the local people,'' he added.

The Zambian government is awarding foreign investors huge tracts of land in order to shed its dependence on copper.

Official data shows that only 10 percent of Zambia's 43 million hectares of arable land is currently being used for farming and other agriculture activities.

REUTERS CS RS1155