Zimbabwe: Sugar Production Outlook Sweet for Tongaat Hulett

Tongaat Hulett Hippo Valley Estates sees sugar production up in the 2011/12 season to between 360 000 and 380 000 tonnes helped by improved cane age and yields on a similar number of hectares harvested.

Tongaat CEO Sydney Mtsambiwa said the domestic market demand for locally produced sugar is expected to remain reasonably firm in the year ahead.

Tongaat, which has operations in South Africa, Mozambique, Zimbabwe and Swaziland, said favourable prices were achieved on exports from Mozambique and Zimbabwe into the European Union and the United States.

"The industry's sugar production in the 2011/12 season is expected to increase to between 360 000 and 380 00 tonnes of sugar, with improved cane age and yields on a similar number of hectares harvested," he said.

He said further rehabilitation of the mill was undertaken during the off-crop just ended in preparation for the crushing of the forthcoming crop.

"The company's production in the 2011/12 season is expected to be between 150 000 and 170 000, approximately 22% above last year," Mtsambiwa said.

Mtsambiwa said an industry wide recovery programme was underway, focused on both the Hippo Valley and Triangle sugar mills, that would entail improving cane yields and the re-establishment of private farmer cane lands.

This, Mtsambiwa said, would eventually restore the industry's sugar cane production to installed milling capacity of 600 000 tonnes per annum and that of the company's to its 300 000 tonnes capacity.

"Restoring the viability of the private farmer sector of the sugar industry is key to a successful and sustainable rural farming community in the south eastern lowveld of Zimbabwe," he said.

In the full year to March 31 2011, the group's revenue amounted to US$88,4m from US$64,9 million achieved in the 15 months ending March 31 2010.

Operating profit totalled US$12,2 million compared to the US$18,4m in the comparative period last year.

Finance costs stood at US$US$3,7 million from US$751 000. Tongaat said the increase in finance costs was largely owing to increased borrowings.

Profit after tax stood at US$8,794 from US$23m in the prior year. Earnings per share stood at 4,6c from 12,2c in the same period last year.

Mtsambiwa said the industry's domestic market sales for the year ended March 2011 totalled 184 000 tonnes compared to 151 000 tonnes in the comparative year.

source: allafrica