Foodstuff, Latvia, Markets and Companies

So far the project is only in the stage of preparation and research; the involved parties do not yet wish to publicly discuss the plans in detail.

Furthermore, sugar production in the European Union (EU) is strictly regulated, at the moment; Latvia does not even have any quotas for producing sugar. None of the existing large sugar producers is willing to see an even minor competitor enter the market, not even in two years' time when Latvia will be, at least formally, allowed to produce sugar.

A number of experts surveyed by the newspaper believe that a sugar refinery in Latvia would sooner or later start pursuing aggressive marketing policy to conquer the local market, which is around LVL 80 million worth and currently taken by foreign producers. This would reduce imports and improve the export/import balance. Sugar production would also provide new jobs and create additional tax revenue.

The estimated cost of a constructing a new factory is around LVL 100 million. The bigger the cost, the stronger the need for attracting foreign investors to the project will be.

Three cities are being considered for the location of the refinery: Iecava, where sugar beet produced by local farmers would be used, as well as the port cities of Ventspils and Liepaja, where sugar could be produced by refining imported raw sugar, and the sugar produced at the refinery, at least initially, could be exported to non-EU countries.

Former beet farmer Modris Villa, who is one of the members of the task force, believes that resuming sugar production will not be hard as, to a large extent, the necessary production machinery and equipment has been preserved. Villa also said that a number of investors from Russia have expressed readiness to provide financing for the project, and it would be possible to obtain a loan for construction of the refinery.

Villa did not disclose the names of the potential investors, nor those of other people interested in resumption of sugar production in Latvia.