Zimpapers Logo

Business Reporter
SUGAR processor starafrica says it will resume raw sugar refining in May when it expects to have completed installation of its Harare refinery plant, imported from India, by the end of April this year. The refinery operations were suspended to pave way for the installation of the new plant with the site preparations completed.
Manufacture of the new plant equipment is said to be 94 percent complete.

The Zimbabwe Stock Exchange listed company said renowned global inspection, verification, testing and certification services provider; Societe Generale de Surveillance, had already inspected 70 percent of the equipment.

SGS is inspecting the other 24 percent while the remaining 6 percent is under manufacture.
Inefficiency meant the cost of operating the old plant has become unsustainable and is the main cause of starafrica’s persistent losses.

The group’s loss after tax from continuing operations stood at US$5,2 million in the interim to September 2013, chairman Mr Joe Mutizwa said last year. Revenue declined to US$6,9 million from US$17,3 million the prior year.

starafrica said civil works have already been completed and the site is ready for the assembly and installation of the new plant and equipment from India.

“The equipment will be shipped in 45 containers. To date, 17 containers have been shipped and are in transit or are undergoing clearance at Durban.

“The general manager is in India to oversee the inspection, packing and shipment of the equipment with a view to expediting the processes.
“It is anticipated that installation and commissioning will be completed by 30 April 2014.

A critical component of the turnaround strategy was guaranteed supply of raw sugar. An agreement was reached with a supplier for payment after starafrica has received payment for supplies made to its own customers.

Sugar refining resumed in December 2012 after the agreement was reached after a brief suspension of raw sugar supplies when starafrica defaulted on payments after exhausting its US$6,5 million revolving supply facility.

The replacement of the sugar refinery is part of the firm’s broad turnaround programme aimed at returning the sugar processor to viability.

Other initiatives include the sale of starafrica’s 33,3 percent stake in Tongaat Hulett Botswana for which a 1,2 million Botswana Pula offer has been received from a prospective purchaser listed on the Botswana Stock Exchange.

The offer is subject to pre-emptive rights by other shareholders in THB.
The ZSE listed company is also working on the disposal of Bluestar Logistics and an offer has been received from a prospective purchaser on ZSE.