Strategic and operational accountability

BUSINESS PROFILE AREAS 2013/14 OBJECTIVES PERFORMANCE PROFIT RISK AREAS 2014/15 OBJECTIVES

MALAWI  

  • Illovo Sugar (Malawi) Limited, listed on Malawi Stock Exchange
  • Two agricultural estates: two factories with refineries
  • Produces raw and refined sugar, speciality sugars
  • 5 679 permanent employees
  • 5 063 seasonal agricultural workers at peak
  • DIFR: 0.11 (2013: 0.14)
Corporate office – Limbe Dwangwa – Mid-central region Nchalo – Southern region
  • Optimise cane growing performance through irrigation upgrades and improved husbandry
  • Secure additional estate land to enable future expansion
  • Increase sugar production to above 300 000 tons
  • Evaluate milling optimisation for further growth
  • Deliver value from continuous improvement initiatives
  • Difficult economic climate including currency devaluation
  • Sugar production 289 000 tons (2013: 299 000 tons)
  • Lower export prices, particularly in the EU
  • Average cane yield 101 tons per hectare, declining from 104 tons per hectare in the prior year due to power interruptions and unseasonal rainfall at Nchalo
  • Average factory capacity utilisation 77% (2013: 83%)
39%
Contribution to group operating profit
  • Slow economic growth and high inflation may impact negatively on domestic demand
  • Impact of lower world sugar price on regional export prices
  • Forex shortages and/or further Kwacha devaluation
  • Increase volume of speciality sugar supplied to the EU
  • Implement Nchalo agriculture improvement plan
  • Increased sugar production
 

MOZAMBIQUE  

  • One agricultural estate and factory
  • Produces raw sugar, marketed domestically by industry marketing association
  • 1 015 permanent employees
  • 4 414 seasonal agricultural workers at peak
  • DIFR: 0.09 (2013: 0.09)
Manhiça district, north of Maputo
  • Support expansion of outgrowers' area under cane
  • Increase sugar production to above 100 000 tons
  • Implement further factory initiatives to reduce costs and increase efficiencies
  • Introduction of syrup storage to mitigate rain delays and steady factory throughput
  • Lower estate cane yields due to adverse weather conditions
  • Sugar production 82 000 tons (2013: 84 000 tons)
  • Average cane yield 80 tons per hectare (2013: 91 tons)
  • Average factory capacity utilisation 78% (2013: 64%)
  • Concluded Power Purchase Agreement with Mozambican Power Authority
2%
Contribution to group operating profit
  • Weather and flooding
  • Greater industry production increasing export exposure
  • Adverse currency impacts
  • Yield improvements supported by irrigation upgrades
  • Increased sugar production
  • Agric investment including land preparation and replant
 

SOUTH AFRICA  

  • Three agricultural estates; four sugar factories; one refinery, three whollyowned downstream plants; 50% share in distillery; 30% investment in a further sugar factory and refinery
  • Produces raw and refined sugar, syrup, and downstream products
  • 2 224 permanent employees;
  • 1 804 seasonal agricultural workers at peak
  • DIFR: 0.15 (2013: 0.54)
KwaZulu-Natal Group head office
  • Continue to secure increased cane supply
  • Initiatives to support commercial and small-scale growers
  • Increase sugar production to above 650 000 tons
  • Logistics savings from the new central warehouse and distribution centre
  • Sugar production 17% higher at 698 000 tons (2013: 596 000 tons)
  • Successful full year of operations of new centralised warehouse
  • Average cane yield 72 tons per hectare (2013: 71 tons)
  • Average factory capacity utilisation 75% (2013: 66%)
  • Substantial increase in world exports to 209 000 tons (2013: 60 000 tons) in the face of high-level of duty-free imports
  • Record alcohol production
14%
Contribution to group operating profit
  • Weather and ongoing growth in cane supply
  • Sugar industry review and tariff protection
  • Resolution of land claims
  • Lower world market prices
  • Volatility in markets for downstream products
  • Continue to extract additional supply chain benefits from new warehouse
  • Maintain sugar production levels
  • Introduce continuous improvement initiative
  • Evaluate energy-efficiencies to continue reducing coal usage
 

SWAZILAND  

  • One agricultural estate, factory and refinery
  • Produces raw and refined sugar, direct consumption sugars marketed by Swaziland Sugar Association
  • Commissioning in April 2011 of major factory expansion and power co-generation project
  • 1 213 permanent employees
  • 1 619 seasonal agricultural workers at peak
  • DIFR: 0.12 (2013: 0.18)
South-eastern region
  • Support the development of increased outgrower cane supply
  • Continue to improve factory performance
  • Increase sugar production to above 270 000 tons
  • Explore opportunities for increasing biomass availability for power co-generation
  • Record sugar production 251 000 tons (2013: 233 000 tons), supported by a record cane crop of 2.2 million tons
  • Average cane yield 96 tons per hectare (2013: 104 tons)
  • Average factory capacity utilisation 79% (2013: 69%)
  • Increased power co-generation and 21% increase in exports into the national grid
14%
Contribution to group operating profit
  • Sugar industry review and restructuring
  • Delays in agricultural initiatives supporting outgrower development
  • Lower EU and world sugar prices
  • Increased sugar production
  • Implementation of further conversions to pivot irrigation
  • Increase power exports to 50 GWh
 

TANZANIA  

  • Two agricultural estates: two sugar factories, treated as one enterprise
  • Produces raw sugar
  • Commissioning of new ethanol distillery mid-2013
  • 908 permanent employees
  • 2 034 seasonal agricultural workers at peak
  • DIFR: 0.03 (2013: 0.03)
Centre-south region
  • Increase sugar production to above 135 000 tons
  • Ongoing improvement in cane yields
  • Increased pre-pack volumes to counter bulk sugar imports
  • Commission the potable distillery project as planned
  • Disappointing factory performances compounded by interruptions from unseasonal rainfall
  • Sugar production 117 000 tons (2013: 130 000 tons)
  • Low-priced sugar imports limit domestic sales volumes and prices
  • Average cane yield 84 tons per hectare (2013: 78 tons)
  • Average factory capacity utilisation 77% (2013: 86%)
  • Successfully commissioned potable alcohol distillery
1%
Contribution to group operating profit
  • Long-term cane supply from outgrowers
  • Uncontrolled sugar imports
  • Wet weather negatively impacting cane recently replanted
  • Full-year, efficient operation of distillery
  • Review distribution network and expand pre-pack domestic market
  • Increased sugar production
  • Ethanol production above 12 million litres
 

ZAMBIA  

  • Zambia Sugar Plc, listed on Lusaka Stock Exchange
  • One agricultural estate: largest capacity factory in Illovo group; one refinery
  • Produces raw and refined sugar, speciality sugars, syrup
  • 1 917 permanent employees
  • 4 031 seasonal agricultural workers at peak
  • DIFR: 0.18 (2013: 0.18)
Corporate office – Lusaka Nakambala – South-western region
  • Outgrower programme expansion resulting in increased hectares under cane
  • Increase sugar production to over 410 000 tons
  • Improvement in milling yields
  • Complete evaluation of molasses beneficiation potential
  • Cost reduction through continuous improvement initiative
  • Sugar production 393 000 tons (2013: 404 000 tons)
  • Reduced cane from both own crop and outgrowers due to poor climatic conditions, erratic power supply, and cane age
  • Average cane yield 111 tons per hectare (2013: 122 tons)
  • Strong factory performance despite reduced cane
  • Lower export prices, particularly in the EU
  • Average factory capacity utilisation 88% (2013: 85%)
30%
Contribution to group operating profit
  • Lower EU prices
  • Impact of low world sugar price on regional export prices
  • Currency rate volatility
  • Regional sales reliant on required permits and customs clearance from neighbouring countries
  • Continue to progress project for increased refining capacity and addition of ethanol production
  • Increased sugar production
  • Improvement of cane yields