ZAMBIA – Zambia Sugar, the largest sugar producer in Zambia, has announced a 14% growth in revenue for the year ended 31 August 2023 despite operating in a challenging environment characterized by an influx of illegal imports, and low disposable income for rural households.
The WhiteSpoon sugar producer recorded an impressive 14 percent growth in revenue to K5.827 billion (US$256.4 million).
Revenue growth was driven by a number of factors including a 12 percent improvement in the weighted average selling price for domestic and a 28 percent rise in export sales.
Zambia sugar attributed the surge in exports to strong regional demand, good logistics management, and availability of stocks following the slowdown in domestic demand.
The operating profit for the firm during the year under review increased to K1.248 billion (US$54.9million) up from K1.243 billion (US$54.7 million) the previous year.
Headline earnings for the year however decreased to K935 million (US$41.1million) from K1005 million (US$44.2million) for the previous year.
Zambia Sugar noted that it faced a significant increase in key input costs (fertilizers, chemicals, electricity, employee costs, packaging, and fuel. Overall, costs increased by 10% which was in line with inflation.
These were however mitigated by improved price realization and cost management practices helped the company to improve on performance.
“I am proud of the performance of the company yet again, given that it was on the backdrop of a year filled with many challenges in both the operational and economic environments,” said Norman Mbazima, Chairman of the Board, Zambia Sugar.
Established in 1964, Zambia Sugar is one of the largest cane sugar producers in Africa. The sugar producer is listed on the Lusaka Stock Exchange with 75% of shares held by the Illovo Group and the balance by institutional and private investors.
The company has capacity to produce 450 000 tons of raw, brown, and refined sugar from cane supplied by our own operations, approximately 1.9 million tons, with 1.5 million tons delivered to the factory by our small to large-scale growers.
The company and other local producers have found themselves increasingly under pressure from illegal sugar imports which are often sold at below market rates.
Zambia Sugar Plc is mitigating against the influx of illegal imports by focusing on optimizing the sales mix, embarking on a sustained marketing effort and working with authorities on measures to curb the influx.