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
|