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Zimbabwe

Overview

Tongaat Hulett’s sugar operations in Zimbabwe comprise the wholly owned Triangle Sugar operation and its 50,3 percent holding in Hippo Valley Estates.

Agriculture and Milling Capacity, Zimbabwe Sugar Crop

As at 31 March 2013, the Zimbabwe operations consisted of 44 519 hectares with a demonstrated potential to produce in excess of 3 million tons of sugarcane annually. Private farmers were initially allocated 15 880 hectares of land through the SusCo project which is ongoing. The average yield per hectare is 100 tons/hectare/annum. Based on Tongaat Hulett’s view of its existing mills, a further 600 farmers on 12 700 hectares could supply an additional 1,4 million tons of cane per annum and the Triangle Estates ethanol plant has an installed capacity of 40 million litres over a 48 week production season.

The Triangle and Hippo Valley Estates sugar mills have a combined installed milling capacity to crush in excess of 4,8 million tons of cane annually and produce over 640 000 tons of sugar. Refining capacity is 140 000 tons per annum.

Sugar production in Zimbabwe in the 2012/2013 financial year increased by 28 percent to 475 000 tons (2011/2012: 372 000 tons) as cane deliveries from private and third party farmers grew substantially.

At the current low dam levels, irrigation has been reduced and cane expansion and root replanting for both private farmers and Tongaat Hulett’s estates have been curtailed, to be resumed once dam levels recover. The business remains optimistic that the water mitigation measures put in place and the likely completion of the Tokwe-Mukorsi dam in the latter part of 2013 will enable the Zimbabwe sugar operations to sustain current levels of production, with an early season estimate that 460 000 tons sugar will be produced in 2013/14.

Successful Rural Sugarcane Farming Community Project (SusCo)

Tongaat Hulett embarked on a comprehensive private farmer rehabilitation programme named Successful Rural Sugarcane Farming Community Project (SusCo), a number of years ago, with the goal of rehabilitating private farmers, with the support and expertise of Tongaat Hulett, to increase their supply of sugarcane. The SusCo project will re-establish the private farmer sugarcane production area from just over 11 200 hectares at present, to 15 880 hectares, with the direct beneficiaries including hundreds of private sugarcane farmers from the Hippo Valley, Triangle and Mkwasine Mill Group areas.

The SusCo project will be followed by a number of private farmer development projects as the business progresses its objective of meaningful stakeholder value creation, while demonstrating the value that can be derived from partnering with governments, private funding institutions like BancABC and rural communities. Project Kilimanjaro (Phase 1) is the first private farmer development project and will entail the development of some 3 300 hectares of new sugarcane land in the Southern Lowveld region. The project will result in 165 new farmers employing some 1 600 employees. Based on the current cane price, this project will result in revenue of some US$18,5 million flowing into these private farmers and the surrounding rural communities.

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