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Business Reporter
South African sugar producer Tongaat Hullet anticipates cane supply from indigenous private farmers in Zimbabwe to increase to more than 1 800 000 tonnes by 2017-18 from 1 017 000 tonnes delivered during the current season.Indigenous private sugar cane farmers operating in the country’s low veldt are expected to increase to 1 022 by the 2017-18 season from 813 in the 2013-2014 season due to current initiatives that the company is implementing together with Government and local communities.

According to Tongaat’s latest financial report sugar cane yield is expected to increase from 74 tonnes of cane per hectare harvested from 1400 hectares in the 2013-14 season to 100 tonnes of cane per hectare from 18 880 hectares by the 2017-18 season.

“The situation in Zimbabwe is in a constructive phase, with Tongaat Hulett, the Government and local communities working together on socio-economic initiatives in the south-eastern Lowveld region of the country.

“This was again demonstrated by the proactive response of the authorities to the recent illegal attempt at land invasion. One of the key focus areas remains the orderly development of sustainable private sugar cane farmers,” it said.

Meanwhile the sugar producer recorded an 11 percent increase in  operating profit from 2,1 billion rand to 2,3 billion rand during the period to March 31, 2014 as operating profit from the Zimbabwe sugar operations fell to R330 million from R625 million last year.

Tongaat said local operations were affected by lower market sales that were influenced by an influx of imports.

“In Zimbabwe, revenue in US dollars was 25 lower than the prior year, as a result of lower local market sales (mainly due to substantially increased imports in the market) with the resultant additional lower priced exports.

“Cane valuations were impacted by lower prices and the effect of curtailed root replanting as a consequence of the water dynamics during the year – reflecting a US$33 million negative change in the income statement compared to last year. The dams have now recovered, following good rains, to the extent that new root replanting has now resumed,” Tongaat said.

The sugar producer however said measures instituted recently to protect the local market against unfair import competition are expected to yield positive benefits.

Local production rose from 475 000 tonnes to 488 000 tons of sugar during the period under review as total sugar output for the group rose 13,5 percent to 1,424 million tonnes and is expected to rise 1,800 million tonnes over the next four years.

Tongaat’s sugar operations in Zimbabwe comprise wholly owned Triangle Sugar operation and its 50,3 percent shareholding in Hippo Valley Estates.

The Triangle and Hippo Valley Estates sugar have mills with a combined installed milling capacity to crush in excess of 4,8 million tonnes of cane annually and produce over 640 000 tonnes of sugar. Refining capacity is 140 000 tonnes per annum.