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OVERVIEW

Sugar A British company has bought Illovo.

I

n 2016 there was a change in ownership of a well-known South African brand. ABF, which used to be Associated British Foods, purchased the sugar company Illovo. ABF bought the remainder of shares that it did not already own in Illovo in April 2016 for R5.6-billion. ABF has big operations in Europe (sugar and bioethanol) and a huge production stream of sugar from beet from two plants in China (180 000tpa). 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. Another major player in the South African market is Tongaat Hulett whose headquarters are about 50km north of Umhlanga. After a slow 2015, the company’s sugar divisions turned an operating profit of R1.3-billion for 2016/17. 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 Africancountries. 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. 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. 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 two-million tons in the 2013/14 and 2014/15 seasons. The figure for 2016/17 was 1.54-million tons.

CONTACT INFO 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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SECTOR INSIGHT Tongaat Hullet Sugar has set aside 3 000ha for emerging growers.

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. Illovo and Tongaat Hulett are the major operators of sugar mills. Twelve of South Africa’s 14 mills are located in KwaZulu-Natal. 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 2017/18  

KwaZulu-Natal Business 2016/17 is the eighth edition of this highly successful publication that has since its launch in 2007 established its...

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