The Saudi Arabian company Savola Group is planning to open a second sugar refinery in Egypt in August and expand its Saudi operations to meet increasing domestic and regional demand, according to a Reuters report.

Mohammad Hassan Ajlan, president of Savola's sugar division, was quoted as saying that the Egyptian plant would be a joint venture with other companies, including Tate & Lyle, and would be located on the Gulf of Suez coast. The plant will have a capacity of 750,000 tonnes a year, and would supply Egypt, Jordan, Lebanon and Syria.

While attending an international sugar conference in the UAE, Ajlan said he believed the disappearance of EU-produced sugar from these markets represented an opportunity for the company, with Arab demand for sugar growing at about 2.5% per annum, spurred by economic and population growth.

Around half of the new plant's production will be sold on the local market, with the remainder exported. The plant is expected to cost in the region of US$90m to develop.

Egypt consumes around 2.5m tonnes of sugar a year, and is the largest sugar market in the region. Total annual refined sugar consumption in the Middle East and North Africa is currently around 13m tonnes.