prospects for the sugarcane industry a technical perspectiveprospects for the sugarcane industry a...
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Prospects for the Sugarcane Industry
A Technical Perspective
Dr Peter Rein
BSST Conference, April 2019
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Outline
Changes in the external environment
Changes in the cane and beet sugar industries
Cost of production
Technology and innovation drivers
What’s new
Diversification
Managing resources
Technology
People
Environment and sustainability
2
PwC report on key factors that define
“competitive success” for industry players (2015)
A larger portfolio of diverse products, both within the sugar
industry and beyond;
An ability to “go global,” with greater geographical coverage,
responding to the needs of major, international customers –
minimizing risks while taking advantage of the opportunities;
An ability to excel in industrial performance, raising efficiencies
while controlling the costs of production, up and down the
supply chain;
To achieve the “critical size” that gives some ballast against big
players, upstream and downstream;
Remaining agile and efficient, ensuring sustainability in terms of
agricultural, industrial and business goals.
3
World sugar production, consumption
and ending stocks
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The long term trend in real sugar prices
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
1952 1958 1964 1970 1976 1982 1988 1994
1998 U
S$/t
on
ne
Sugar Price Sugar Price Trend
Trend = -1.5%/year
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World raw sugar prices, NY #11
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Changes in the cane sugar industry
Average cane sugar costs have fallen over the past 20 years
At least 1/3 of this fall is due to the changing distribution of output
Brazil, Thailand and India played a crucial part in this structural shift
EU changes led to an expansion of destination refiners
Raws became a larger proportion of world traded sugar, reversing
previous trend. Changing again to more white exports.
Sugar price affected by oil price, through ethanol (?)
Sustainability issues have gained importance
Emphasis on energy – effect on net cost of production
Mechanical harvesting more widespread
7
New EU sugar regime changes (deregulation)
From 2017, beet quotas abolished
Consequences:
Competition in the EU intensifies
Beet producers free to export
2 refineries in France closed – because beet sugar is produced more
cheaply
Higher cost beet factories closing
But low sugar prices encourage beet growers to switch crops
EU sugar production lower this year
8
ACP sugar imported into EU (Eurostat)
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Beet yields(ref: Vermeulen 2015)
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Beet recovery + losses(ref: Vermeulen 2015)
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Sugar yield in the Netherlands
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Brazil (ref. Pecege Projetos)
Cost of production risen
in last 20 years
Decrease in productivity.
Both yield in t/ha and TRS
content (kg TRS/t of
cane) have been falling in
recent years: when
comparing 2007/08 and
2016/17, the fall was of
4% and 10%, respectively.
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South African Sugar Industry (SASTA 2014)
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South African sugar industry (SASTA 2018)
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Increase in fiber content in Australia(Ref: Dr N Berding)
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Chris Norris (ASSCT 2015)
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Factors affecting the cost of production
Length of milling season
Utilization of expensive milling assets
Large crop improves profitability
Size of the mill
Economy of scale
Milling is a high fixed cost industry, and high throughput drops unit cost of production
Rationalization evident, particularly in mature industries
Quality of the cane
Milling costs largely related to tonnes cane crushed
Revenue depends on sugar produced
Thus high sucrose cane improves profitability
Technical efficiency in field and factory
Labor costs
Industry structure
Diversification boost to revenue
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How do the milling industries compare?
Use a Factory Performance Index (FPI), the ratio of actual to expected
recovery.
FPI = OR/OR*
A good performance gives a value of 100.
Typical numbers are as follows:
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Country Australia South
Africa
Other
Africa
Latin
America
Thailand Louisiana P’ppines Colombia Guatmla
FPI 99-106 95 -100 94 - 98 92-100 90 - 92 96 Avg. 99 Avg 100 91-99
Brazilian trash separation plants
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Cane dry cleaning
Dry cleaning has major advantages:
Cost savings in terms of reduced wear and maintenance
Increased factory capacity due to reduced quantities of extraneous matter
Reduced energy consumption
Higher calorific value of the bagasse
Lower losses of sugar in filter cake, bagasse and molasses
Improved sugar quality
Reduced cane losses
There are some disadvantages as well:
Additional equipment has to be installed, with associated capital, maintenance and operational costs
A small quantity of cane may be lost in cleaning (but much lower than losses in harvesting)
Extraneous matter – a potential fuel or a potential disposal problem
There may be implications for the particular cane payment system.
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Innovation
Technological change is happening much quicker
Unlearn the past - the future is no longer an extrapolation of
the past
Global competition is a reality
In sugar, innovation is seen in areas of production expansion –
Brazil, India, Thailand.
Strongest sugar companies are/were those with well-
developed R + D/technical departments
Closure of many company R + D departments
Sugar industry is slow to innovate and too conservative
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Three generations of ethanol plant in Brazil
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Ethanol production cost in Brazil
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Goldemberg J. et al. Biomass and Bioenergy (2004) 26, 3, 301-304
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Ref: Gouden
& Walthew
SASTA 2018
Improve existing technology
Invest in intellectual capital to reduce physical capital
Adopt new materials (e.g. abrasion or corrosion resistant)
Improve performance of existing equipment
Employ new design / optimization techniques (e.g. CFD, FEA)
Adopt new techniques (e.g. neural networks, plant-wide optimization, new maintenance approaches)
Oil refineries use machine learning software to improve reliability
It requires a deliberate effort to keep up to date
It requires acknowledgement that on-going improvement and change is required to keep up, let alone get ahead.
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CFD is a game changer
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What’s new in cane sugar processing
Dry cane cleaning
Perforated mill rolls
New diffuser designs
Mud recycle to diffusers
Lamella juice clarifiers
Horizontal belt filters
Multiple rising film evaporators with common separator
Lamella syrup clarifiers
Centrifugal control and optimization
Bagasse drying
New refining technology
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Rationale for energy export
The active pursuit of energy production from sugarcane
in the form of liquid fuels and electric power can yield
considerable benefits, including:
Use of renewable resources for energy production
A favorable impact on the generation of greenhouse gases and the
environment
Reduction in a nation’s reliance on imported fuels
Incentives to expand agricultural production
Elimination of the burning of cane
The prospect of enhanced sugar mill profitability
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30
James Joule
1818 - 1889
Barriers to energy projects
In most countries a free market does not exist
Government or quasi-government bodies dictate prices paid
for power and ethanol use/price regulations
Production of energy pellets may be the best option – export
energy in the form of a fuel.
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Estimates of current practice (Leal 2018)
32
CTBE project in Brazil
Trash recovery and use for power generation.
Five year project with funding from the Global Environment Facility (GEF).
Half-way through project (pages.cnpem.br/sucre/).
Testing different options of washing to remove sand and some problematic
contaminants such as K, Cl and S, that are leachable.
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Sugarcane biomass
Sugarcane fixes more dry matter / ha than most other crops
and more than “natural” vegetation
Energy from lignocellulosics
Intensive R + D in US, Brazil and elsewhere
Both thermochemical and hydrolysis/fermentation route being
followed.
Lignocellulose ethanol cost depends on processing cost, ethanol
from corn or sugar on feedstock cost
High energy canes are being bred for future lignocellulose
exploitation
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1st Stubble sugarcane harvested December, 2005
Chacahoula, LA (6/22/06)
L 99-233 L 99-226 HoCP 91-555 Ho 95-988
Sugarcane
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1st Stubble energy cane harvested December, 2005
Chacahoula, LA (6/22/06)
US 72-114
Energy Cane
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Integration of sugar and energy cane
processing.
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Lignocellulosic biofuels
Enzyme cost and capital costs still a problem for hydrolysis
route
Only 2 commercial-scale plants (commissioned 2014) using
bagasse and trash
Granbio $195 M, 82 ML/y
Raizen $100 M 42 ML/y
Granbio went live in 2014, until 2016. Expected to produce 30
ML this year
Hydrocarbon fuels from pyrolysis estimated to cost 2 to 3 x
grain ethanol at present (on gasoline equivalent).
39
Xylose from bagasse (Stora Enso website)
The Stora Enso demonstration plant will utilize sugar cane
bagasse, from the adjacent Raceland sugar mill in LA.
The plant processes biomass to high purity monomeric
hemicellulose sugars, high purity lignin and high purity cellulose
pulp.
First phase to produce the highly refined xylose, along with de-
soiled and de-ashed cellulose material.
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Pelletizing bagasse
Pellet market already well developed,
using mainly wood waste
ISO 17225 to provide unambiguous and
clear classification principles for solid
biofuels and to serve as a tool to enable
efficient trading of biofuels
Wear problems - sand
Louisiana plan
Originally 10 plants planned
Cora Texas installation plans to produce
200 000 t torrified bagasse pellets
DRAX in the UK is importing wood
based pellets from plant in LA and GA.
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Suleiman, Brazil (2015)
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Torrefaction and biochar
Torrefaction of bagasse is a mild form of pyrolysis at
temperatures between 200 and 320 °C.
Slow pyrolysis, a gasified stream is taken for further processing
to fuels and chemicals, and biochar remains as a co-product -
beneficial when returned to the soil (Quirk et al. 2010).
During torrefaction, the bagasse properties are changed to
obtain a better fuel quality for combustion and gasification
applications.
Pelletizing leads to a more dense easily handled fuel, with an LHV
of 20 to 25 MJ/kg
Can substitute directly for coal, but is clean burning.
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Bunge + Solazyme alliance
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Modified Algae technology (aseptic dark reactor with cane juice as input –no
need for sunlight)
Producing triglycerides from sugar –the same way that most animals do
Product of entry for Bunge: Oil rich (>85%) in C14 (Myristic) and C12
(Lauric) fatty acids for the chemical industry
Price available 40 % higher than palm oil
The Algae under the microscope A single cell under fluorescence (green is oil)
LSU Study (Christian Lohrey MS thesis 2008)
Advantages of co-locating algae production with sugarcane mills
are:
CO2, water, and energy resources available from mill.
Nutrients available from agricultural runoff.
Climate suitable for algae production.
Established agricultural infrastructure and markets
Available resources at a 10 000 metric t/day sugarcane mill
generating 15 % excess bagasse can realistically support
production of 920,000 L/y of algal biodiesel and 21 000 metric
tonnes/y of algal meal.
45
PHB in Brazil
Renewable raw material
Biodegradable
Effluent used as irrigation
Pilot plant annexed to Da
Pedra mill
Difficult to compete
financially with oil based
feedstock
46
Bioplastics
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How do you make best use of human
resources?
In mature industries, skills and experience are usually well-
established.
In rapidly expanding industries, a lack of skills is evident
The difference between a good and a mediocre mill is usually
the calibre of the staff, rather than the technology and
equipment
Lester Thurow, MIT: “Skilled people become the only
sustainable competitive advantage”
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Adjust to the new generations Employers will need to adjust to each generation’s widely divergent characteristics and
idiosyncrasies - re-evaluate workplace practices.
Millennials already accounting for 50 % of the workforce and set to make up nearly 75 %
by 2025.
The ability to attract and retain talent will be dictated in part by meeting the needs of the employees
– they look for a good work environment
Need to satisfy their need to keep learning and focus on driving change
CSR is very important to them
Gen Z grew up in a recession
Willingness to work hard
First generation that has been online since before they could walk
Prefer to learn on-line
As with millennials, their interpersonal skills are not well developed
Sensitive to injustices
Reverse mentoring pairs older personnel with millennials to bridge generational skills gap.
These new generations can lead to digital solutions for smart manufacturing.
Caveat – young generations over-reliance on software packages
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Bonsucro www.bonsucro.org
Bonsucro is:
A multi-stakeholder organisation which fosters the sustainability of the
sugarcane sector
A collaboration of sugar retailers, investors, traders, producers and NGOs
who are committed to sustainable sugar production.
Bonsucro attempts to promote measureable standards in the key
environmental and social impacts of sugarcane production and
primary processing while recognizing the need for economic viability.
Attempts to measure outcomes, not prescriptive
Bonsucro is funded by members.
Bonsucro now getting some traction
54
Ref: Eustice et al.
Proc. SASTA
2011
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GHG Emissions in sugar production (field
to gate)
Raw sugar has a carbon footprint in the range 200 to 800 kg
CO2eq/t sugar
Depending on conditions, 200 to 500 kg CO2eq/t sugar (Rein
2010)
Australia 500 to 800 kg CO2eq/t sugar (Renouf 2007)
Thailand 230, Japan 311 kg CO2eq/t sugar (Hattori 2008)
South Africa average 551 kg CO2eq/t sugar (Mashoko 2010)
Sugar can achieve a negative carbon footprint with export of
> 80 kWh/t cane
Refining approximately doubles C footprint of sugar
Hattori (2008) – refining emissions 314 kg CO2eq/t sugar
US – refined white sugar 570 and beet sugar 1160 kg
CO2eq/t sugar (Taylor 2010)
Best option – white end refining – 400 kg CO2eq/t sugar in
Mauritius (Plassmann et al. 2010)
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Strategies to reduce carbon emissions
Cogenerate and export power to the maximum
extent possible
Maximise cane yield and factory recovery
Reduce the fertiliser and chemical inputs, particularly
N fertiliser
Reduce the extent of cane burning to zero
Reduce the quantities of any supplementary fuels
purchased.
Minimise irrigation power input.
Reduce cane transport distances
Recycle water to reduce water intake.
57
Water footprint (Klenk et al. 2012)
No accepted definition
Blue, green and grey water
Green water – largely evapotranspiration
Cane sugar 1500 L/kg sugar
49 % blue water
45 % green water
6 % grey water
Beet sugar 557 L/kg sugar
Blue water 10 %
Green water 67 %
Grey water 23 %
Water footprint of bioelectricity is about a factor of 2 smaller than that for
bioethanol (Hoekstra et al. 2009)
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Per capita sugar
consumption in the
UK over the last
200 years (Source
Czarnikow)
Development of
obesity in the UK
over the last 20 years
(source Czarnikow)
The future – where is the sugar industry heading?
Production and consumption continue to expand
The industry does not capitalise on the green credentials of the sugarcane
industry.
Fighting the strong anti-sugar lobby is difficult
More emphasis on producing white cane sugar
Technologies to be involved in:
Cane quality
Field and factory yields
Energy
Process simplification
New equipment
Carbon and water footprints
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Some concluding views
Brazil, India, Thailand, Latin American and other low cost producers will
continue to expand
Technology advances are generally associated with industry expansions
Profitability is still the issue - industries will be looking for ways to
reduce costs (or increase revenue).
Cogeneration, ethanol production and energy efficiency in general will
continue to become more important
R + D should be viewed as an investment rather than a cost
People resources are so important. Make sure you empower them to
do the best they can.
Bottom line – it’s all about cost of production
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…so, you have
a question?
Gracias
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