ZIMBABWE – Sugar producer, Tongaat Hulett Zimbabwe (Tongaat), says its domestic market sales for the year to March 2015 surged 109 percent to 309 000 tonnes from 148 000 tonnes in 2014 due to the introduction of a 10 percent import duty on sugar early this year.
“There was significant improvement in local market sales volume which resulted in positive impact on revenues following regulatory interventions by government against sugar imports,” said the company in its full year results to March.
“This was however not matched by a corresponding increase in profit due to lower export market realisations from the European Union (EU) market, combined with a depreciation of the Euro against the USD,” added Tongaat.
The sugar manufacturer also noted that a total of 179 000 tonnes against 279 000 tonnes were exported, a 36 percent slump from prior season, while 3 000 tonnes were sold into regional markets.
In the period under review, sugar production took a five percent knock to 228 000 tonnes attributed to the lack of cane deliveries from the independent ethanol plant estate at Chisumbanje and the negative impact of low dam irrigation levels at the end of 2013.
“A total of 1 746 000 tonnes were crushed during the season compared to 1 875 000 tonnes crushed in 2014, of which 1 001 000 tonnes were company cane and 745 000 tonnes was delivery by surrounding out-grower farmers,” the group said.
Revenue for the year was eight percent higher than prior period at $146,8 million from $136,1 million in 2014, while operating profit slumped 15 percent from $19,1 million to $16,2 million.
Profit for the year was 19 percent lower than the $9 million recorded in 2014 at $7,3 million for the period under review, as cash generated from operations also took a 39 percent knock to settle at $17,8 million from $29,1 million.
Going forward, the group aims at increasing the number of private farmers by the 2017/28 season, to 1023 supplying more than 1 900 000 tonnes of cane harvested form 19 270 hectares.
“The target goal for the industry continues to be the attainment of the sugar production installed capacity of 640 000 tonnes per annum,” Tongaat said.
The local sugar operations consist of Triangle and a 50,3 percent stake in Hippo Valley Estates, representing a combined installed sugar milling capacity of more than 640 000 tonnes.
Meanwhile, the Zimbabwean unit contributed the most to the group’s operating profits at $35 million up from $33 million the prior year.