By Taurai Mangudhla
ZIMBABWE Stock Exchange-listed cane processor Tongaat Hullet forecasts a marginal increase in sugar production in the 2021/22 season on the back of improved milling efficiencies, yields and cane quality as water supplies are adequate for the next three seasons following good rains received last season.
In a statement accompanying abridged audited results for the year ended March 31 2021, Tongaat said above-normal rainfall received last season provided adequate water to cover the industry for at least three more seasons at normal water use.
“The total production for the sugar industry for the forthcoming 2021/22 production season is forecast to increase marginally on the back of projected improvement in yields, cane quality and milling efficiencies,” the company said.
This comes after the company reported a 4% drop in sugar production due to lower than expected mill efficiencies and incessant rains which impacted cane quality.
Private farmers as a result saw a 14% slump in harvests in the season to 593 000 tones while the company reported a 3% growth in harvests. The drop in cane harvest from traditional industry sources was compensated for by 55 400t of cane sourced from a third
Tongaat said overall cane deliveries from the company’s plantations and private farmers were impacted by power challenges which affected irrigation, and the dry spell experienced from October 2019 to March 2020.
“The wet spell in December 2020 interrupted the harvesting programme, resulting in a total of 555 hectares for both the company and private farmers being carried over for harvest in the 2021/22 production season.
“Steps were taken during the January to April 2021 off-crop period to rehabilitate the mill to ensure improved performance in the 2021/22 production year, while solar projects to augment electricity at critical water pumping installations are under consideration,” said the company.
The company said it was focusing on satisfying local market requirements, with residual stocks being allocated to regional and international premium markets to generate additional foreign currency for the company and the nation.
This comes amid challenges at the central bank auction platform with disbursements being delayed by more than ten weeks, crippling an industry which largely relies on foreign currency for raw materials and spares.
“In the medium to long-term, the company is considering various diversification initiatives in order to increase the contribution of its non-sugar business,” the company revealed.
In terms of financial performance, total revenue for the year increased by 34% to $16,8 billion largely due to increased export volumes. After incurring $277,3 million in another comprehensive loss net of tax specifically in respect of actuarial losses on post-retirement provision, the company’s total comprehensive income closed the year at $848,4 milllion down from $2 billon recorded last year.
Tongaat said there were minimal disruptions to its key operations due to COVID-19 as the company, and the rest of the sugar industry was classified as essential service.
In order to complement government efforts, the company launched a self-financed vaccination programme aimed at protecting its workforce and surrounding community.