This document discusses the cost components of sugar refining and ways to reduce costs. It shows that raw sugar costs make up over 88% of the total ex-factory cost of refined white sugar. Labor costs account for only 3.4% of total costs. The document also discusses using advanced technology like gasketed plate heat exchangers and state-of-the-art packaging equipment to increase productivity and reduce labor costs. Hedging raw sugar prices is also presented as a way to offset risks from raw material price fluctuations.

1. At Lower Cost
Dr. Yves El Mallat

5. Particular
Wage Rate/Day
US$
Productivity
MT.W.S/Lab/Day
Labor Cost US$/MT/Day
Refinery A 16 5 3.2
Refinery B 18 7 2.6
0.6 US$

20. The major cost component in any sugar refinery resides
in the raw sugar purchase cost, which could exceed 88 %
(Raw sugar melted) of the white sugar produced at Ex-factory cost.

21. Particulars %
Raw Sugar Melted 88.3%
Labor Cost 3.4%
Energy (Khuff Gas) 2.9%
Packing Cost 2.4%
Chemicals Cost 1.3%
Factory Overheads 1.25%
Repair & Maintenance 0.3%
Other Utilities 0.15%
White Sugar Ex-Factory Cost 100%
97%

22. 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 80.00% 90.00% 100.00%
Raw Sugar Melted
Labor Cost
Energy (Khuff Gas)
Packing Cost
Chemicals Cost
Factory Overheads
Repair & Maintenance
Other Utilities
White Sugar Refining Cost Components

23. Raw sugar hedging is when a company
offsets risks arising out of fluctuations in raw
sugar prices.

25. Industrial Engineering joins
people, machines and the
organization to achieve
greater productivity.

30. Advanced
Technology
Gasketed Plate
Heat
Exchangers

34. Installation of state-of-the-art sugar packaging equipment comes with
accompanying promise of faster speed coupled with reduced labor, giveaway,
and packaging material waste.
All other packaging cost components are manageable by the means of supply
price negotiations and wastage control.

39. 39

40. 40
Countries with a low productivity increase are
among the poorest of the planet.

41. 41