HIPPO VALLEY ESTATES, a unit of South Africa-based Tongaat Hulett, is projecting an increase in sugar production in the next four years at installed milling capacity of 640 000 tonnes per year spurred by availability of water at supply dams.
Nqobile Bhebhe Chief Reporter
The firms said the recent good rains left all supply dams at 100% of their capacity.
“The recent good rains which saw almost all the supply dams for the industry attaining the 100% full capacity, has revived the industry’s hopes of restoring sugar production to installed milling capacity of around 640 000 tons per annum by 2017 to 2018.
“The replanting programme which has since resumed and is now back on track is gaining momentum with sugar production expected to progressively increase over the next four years” Tongaat said in latest financial report.
The firm said the “imminent completion of the Tokwe-Mukorsi Dam, besides augmenting the current water sources will present new development opportunities for expansions”.
This is despite the firm recording a 25% drop in revenue in the year ended March 31 2014 due to lower market sales on the back of rising imports.
In the period under review, revenue was R2,89 billion down from R3,2 billion recorded in the same period last year.
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The dip in revenue took a toll on operating profit which went down 55% to $33 million from the $74 million recorded in the year comparable.
According to Tongaat’s latest financial report, the sugar industry was negatively impacted upon by increased imports at substantially discounted prices into the market as well as the pressure of significantly lower sugar prices realised from exports into the European Union.
“The industry’s domestic market sales for the year amounted to 148 000 tonnes compared to 250 000 tonnes achieved in the previous marketing season, a decrease of 43%,” Tongaat said.
Recently, the government suspended the importation of all agricultural produce and cancelled all existing import permits, a move local producers say would increase the uptake of their produce.
Triangle and Hippo Valley Estates sugar mills have a combined installed milling capacity to crush in excess of 4,8 million tonnes of cane annually and produce over 600 000 tonnes of sugar. Refining capacity is 150 000 tonnes per annum.
