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Zambia: Sweet results for sugar company

The Zambia Sugar Company Plc, a member of the Illovo Group, has exceeded previous records in “cane production, sugar made and sales achieved”.

In its operating results for the financial year up to March 31, the company reports a 22% increase in sugar production and an operating profit of about $39-million.

A significant increase in net finance costs reduced profits before tax, and profit after tax was further reduced by a tax charge. Still, production was 385000 tons of sugar, up from 315000 tons in 2009. Sales in the domestic market, which accounts for 41% of production, grew by 10% “driven by strong economic fundamentals and increased disposable income”.

A world sugar deficit during the year pushed up regional demand and “a record 125000 tons were exported.” The severe drought which reduced production in SA and reduced output in Swaziland was offset by increased production in Zambia.

Zambia has duty-free, quota-free access into the European Union (EU) market and exports into that market were 108000 tons. Total exports were a record 233000 tons, up from 175000 tons the previous year.

The company has recently modernised and expanded its factory at Mazabuka in the southern part of the country and “enhanced factory performance benefited agricultural operations, leading to the estate delivering a new record of 1.95 million tons of cane compared to 1.7 million tons delivered the previous year”.

Part of the modernisation and scaling-up of operations included bringing an additional 10500 hectares under sugar. Outgrowers delivered a record 1.1 million tons. Total delivery to the expanded factory was 3.1 million tons, an improvement of 0.5 million tons year on year. The sugar mill has the capacity to produce up to 450000 tons of sugar a year.

The company accounts for 94% of Zambia’s sugar production and Illovo Sugar, a leading producer with operations in six African countries, is the majority shareholder with an 82% stake. It also produces syrups and speciality sugars for the preferential markets of the EU. It is one of Zambia’s largest employers, with about 2000 permanent employees and up to 4000 seasonal workers.

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