AGRI-PROCESSING firm Tongaat Hulett has attributed a $82,5 million increase in revenue in the year ended September 30 to a government directive curtailing sugar imports.
NQOBILE BHEBHE Chief Reporter
The revenue increase was up from $64,6 million in the same period last year. Tongaat also said its operating profit increased by 38% to $15,2 million up from $11 million while its net debt decreased to $38,4 million compared to $54,3 million last year.
Hippo Valley Estates Limited Company’s chief executive Sydney Mutsambiwa said although the local market suffered from depressed disposable income, sales volumes were encouraging.
“The encouraging results for the half-year ended September 30 2014 were achieved as a consequence of a significant improvement in sales volume in both the domestic and export markets at a time when revenue is being negatively impacted by lower international sugar prices and there is a persistent shortage of disposable income in the local market,” Mutsambiwa said in a statement accompanying the group’s results.
“The substantial improvement in domestic sales volume was achieved in response to the government interventions in curtailing sugar imports at dumped world market prices which impacted positively on the industry’s efforts to regain its local market share.”
Sugar producers have been seeking government’s intervention in restricting imports of the commodity The move by the government to review duty upwards on sugar imports was seen as a measure to enable local sugar industry players to regain lost market share.
In his mid-term fiscal policy review, Finance minister Patrick Chinamasa increased duty on a wide range of imports of finished products, including cooking oil, poultry, soap, maize-meal, flour, beverages, sugar, fresh and canned fruits and vegetables, among others.
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Mutsambiwa said business experienced the impact of lower international prices, especially on exports to the European Union. He said there had been a drive to reduce the costs of sugar production to counter the impact.
That move has resulted in a 23% reduction in production costs per tonne and has “provided a good momentum for further reductions in costs after consolidation in the current season”.
The domestic and export sales volumes for the period under review totalled 265 411 tonnes, an increase of 38%.
Mutsambiwa said private farmers registered a 10% increase in cane deliveries, collectively delivering 569 925 tonnes of cane, whereas the company’s cane deliveries over the same period amounted to 723 158 tonnes, a decrease of 5%.
