Strategic overview

STRATEGIC INTENT KEY PERFOR-
MANCE AREA
2013/14 KPIS INCLUDE: GROUP GOALS SPECIFIC OBJECTIVES AND AMBITIONS INCLUDE:
  • Be the leading sugar and downstream products operation in Africa, an increasing global supplier and world-class organisation
  • Be the lowest-cost producer in every country in which it operates and among the lowest-cost producers in the world 
Operational performance

5% increase in group sugar production

Record production from current installed capacity

Operating margin declined
2.9% to 14.3% 

  • Enhance shareholder wealth by optimising long-term returns and growth of the business, as a world-class organisation
  • Profitably expand the group’s sugar and cane production
  • Evaluate opportunities to invest further in downstream operations, and consider footprint expansion as attractive opportunities arise 
  • Reach production level of two million tons of sugar by 2017
  • Improve overall time efficiency and yields via speed-profiling and lost opportunity analysis
  • Establish a Sugar Centre of Excellence and Training Academy
  • Extend downstream contribution to the group, possibly via new ethanol and furfural operations 

Sugar production (million tons)

  • Optimise the return on every stick of cane by adding value to its core commodity products: fibre, sugar and molasses. It will focus on its core business and develop material niche operations which add value
  • Increase profits in real terms on a sustainable basis and maximise the return on capital employed through cost leadership, the use of innovative technology and the participation of its employees 
Cost reduction and revenue growth 

Headline earnings growth of 4.3% to 194.0 cents per share

22% increase in downstream revenue 

  • Achieve a competitive rate of return on shareholders’ funds and increase profits on an ongoing basis in real terms
  • Maintain a distribution/dividend cover of at least two times
  • Manage investments and working capital to achieve efficient usage of funds employed
  • Undertake research and development to maximise value added from core products 
  • Embed a culture of continuous improvement across the business, to lead to improved working practices, increased plant optimisation and enhanced operating profit
  • Bring operations at recently commissioned distillery at Kilombero to steady state
  • Gearing not to exceed 40%, and interest cover to be maintained above five times 
  • Provide a safe working environment for all employees, contractors and stakeholders 
Safety, health and environment  All operations accredited with a minimum Four-star NOSA rating in 2013/14. Both agricultural operations and distilleries in SA received Occupational Health and Safety Management System OHSAS 18000:2007 accreditation 
  • Provide a safe working environment for all employees, contractors and stakeholders 
  • Drive to further decrease workplace injuries by focusing on behavioural performance and entrenching further rigid health and safety standards
  • Continuous improvement and increased prominence of group safety, environmental and quality performance 
  • Be the market leader, meeting and proactively anticipating customer needs 
Product quality and service  Successful completion of the Pietermaritzburg sugar distribution centre, leading to improved customer service and food grade handling standards 
  • Be proactive in identifying the needs of customers
  • Consistently deliver quality products and services to customers 
  • Optimise distribution networks to minimise cost to serve
  • Move further along value chain, via improved packing capability and sales mix
  • Continuous product delivery within specification and on time 
  • Be a moral performance focused organisation that people are proud to work for, where they are challenged to “go the extra mile”, feel they can make a difference and know that good performance is recognised 
Human resource development  Employee development spend 

  • Promote the ongoing development of all employees so that they reach their maximum level of competence and participate fully to achieve the group’s objectives
  • Offer equal opportunity to all employees 
  • Develop desired leadership behaviours through the values-driven leadership initiative
  • Continuously improve human resource productivity metrics, including number of employees per thousand tons of sugar produced
  • Integrated talent management programme including succession planning at operational and management level
  • Provide support and training to encourage development of local employees at all operations 
  • Be welcomed in the communities in which it operates because of what it does, how well it does it and be accepted as a progressive company by all communities; aligning strategies to meet changing circumstances in the various countries in which the group operates
  • Be cognisant of the rural locations of the group’s operations and the impact that it has on job creation and poverty alleviation in such areas 
Sustainability and governance 

90% of energy requirements from renewable resources using own installed capacity

Social benefits to employees and our neighbouring communities amounted to R268 million
(2013: R197 million) 

  • Be socially responsible, and maintain and develop appropriate ethical, environmental and risk management standards as an integral part of the business
  • Ensure the company is managed in an efficient, accountable, responsible, transparent and moral manner
  • Take cognisance of all stakeholders’ interests in the group’s business
  • Maximise usage of bagasse and biomass to generate electricity 
  • Objective to ensure reliable cost-efficient energy supply to our operations and strive for 100% renewable energy use
  • Implement Sustainability Policy and Framework
  • Compliance with all JSE and King III requirements