OPTIMAL USE OF SUGAR CANE BY-PRODUCTS IN SUDAN.

The objective of this thesis is to determine the most socially profitable use of molasses in Sudan. Comparisons are made between animal feed and alcohol production for a variety of firm sizes. Animal feed mills are more efficient than alcohol distilleries in the use of Sudanese molasses. Feed mills demonstrate economics of scale while intermediate-size alcohol distilleries are the most cost effective method of alcohol production. The location of plants near molasses producers is shown to be more efficient than alternative sites, because these plants will partially depend upon the sugar factories for their steam generation, storage facilities and administrative buildings, leading to significant savings in capital costs. While animal feed production is more socially profitable than alcohol, government taxes and subsidies cause negative private profitability in animal feed production. Thus, the most socially profitable investments will not be undertaken without some change in government policy.

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