KwaZulu-Natal Business 2019-20 edition

Sugar
OVERVIEW
KwaZulu-Natal leads in sugar production.
SECTOR INSIGHT
Times are tough in the sugar
industry.
For the first time in nearly a decade, some commercial sugar
farmers in the Pongola area have returned to planting cotton as
a rotational crop. This is according to the 2018 annual report of
the KwaZulu-Natal Agricultural Union. Diversification is a good
thing, but this move perhaps also points to the downward trend in
overall sugar production.
KwaZulu-Natal is South Africa’s biggest sugar producer. Most
of South Africa's 14 sugar mills are in KwaZulu-Natal, as are the
headquarters of the biggest companies.
The South Africa Cane Growers’ Association (SACGA) described
the 2017/18 season as “one of the toughest in the history of the
South African sugar industry”. Although more land was cultivated
(after the drought) and revenue was up, the price of sugar was so
low that some growers were said to be at risk of business failure.
Fourteen sugar mills crushed a total crop of 17 388 177 tons of
cane to produce 1 994 607 tons of sugar during the 2017/18 crushing
season. The cane crop was 2 313 567 tons larger than the 2016/17
crop of 15 074 610 tons.
About 40% of local production is exported. The SACGA represents
about 24 000 growers who produce about 20-million tons of cane.
A new industry structure, allowing for multiple grower associations,
has been agreed to by the SACGA, the Department of Trade and Industry
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
(dti) and the relevant parliamentary
portfolio committee.
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.
Tongaat Hullet Sugar has
agreed to a R52-million sugarcane-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 sugarcane
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-amillion
tons of sugar. It also has a
molasses mixing plant.
31
KWAZULU-NATAL BUSINESS 2019/20