OVERVIEW
Sugar Sugar production is on a downward trend.
SECTOR INSIGHT • A sugar tax has been proposed.
M
ost of South Africa's 14 sugar mills are in KwaZulu-Natal, as are the headquarters of the biggest companies. Overall production volumes have been down in recent years because of the severe drought. Total saleable sugar in the South African market (for domestic use and export) was over twomillion tons in the 2013/14 and 2014/15 seasons. The figure for 2016/17 was 1.6-million tons. A proposed national sugar tax is being opposed by industry representatives. About 40% of local production is exported. The South African Cane Growers' Association represents about 24 000 growers who produce about 20-million tons of cane. Neither of the Big Two companies relies exclusively on South African sugar earnings: Tongaat Hulett has a big property portfolio and Illovo draws most of its profit from operations elsewhere in Africa. Illovo Sugar Limited has a presence in six African countries and is the continent's biggest sugar producer. The group's head office is in Umhlanga Rocks. In 2016 ABF, which used to be Associated British Foods, purchased Illovo. Tongaat Hulett’s headquarters are about 50km north of Umhlanga. The company's sugar divisions turned an operating profit of R1.3-billion
ONLINE RESOURCES South African Cane Growers’ Association: www.sacanegrowers.co.za South African Sugar Association: www.sasa.org.za South African Sugar Technologists Association: www.sasta.co.za Sugar Milling Research Institute: www.smri.org
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for 2016/17, a notable improvement on the previous year. This was partly because of better import protection in the countries where Tongaat Hulett operates and because of higher export prices generated into the EU and other African countries. Tongaat Hullet Sugar has agreed to a R52-million sugar cane growing project which will see co-operatives and contract farmers plant cane on 3 000ha at Felixton, Maidstone and Darnall. Illovo and Tongaat Hulett are the major operators of sugar mills. Other millers are Gledhow, ULC, Umfolozi and Tsb (which has a further two mills in Mpumalanga). Illovo has four mills, three sugar-cane estates, four sugar factories, a refinery and three downstream operations that make products such as furfural, furfuryl alcohol, ethyl alcohol and lactulose. The four mills run by Tongaat Hulett are located on the North Coast while the central refinery is in Durban and the animal feed plant, Voermol, is near Tongaat. The Sugar Terminal at Maydon Wharf, Durban, serves 11 mills and can store more than half a million tons of sugar. It also has a molasses mixing plant.
KWAZULU-NATAL BUSINESS 2018/19