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Manufacture of Sugar
BY Yasmin Mahomedy
South Africa
19 January 2018
R 10 080.00 (ZAR)  
estimated $ 730.26 (USD) *
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The South African Sugar Industry


In general the local sugar industry contributes more than R12bn to the economy and 0.6% towards GDP, is responsible for 85,000 direct and 350,000 indirect jobs and has export earnings of R2.5bn annually. There are 23,866 registered sugar cane growers who farm more than 371,662 hectares of sugar cane and produce approximately 19.9 million tons of cane annually. An average of 2.2 million tons of sugar is normally produced per season and more than 37% of this sugar is marketed via the Southern African Customs Union (SACU).


Effects of the Drought


The crippling drought experienced during the last two years resulted in an estimated loss of R1.7bn in gross revenue during the 2015/16 season while the 2016/2017 season was described as one of the worst in the history of the South African sugar industry. Although production for the 2017/2018 season seems more promising, the South African Cane Growers’ Association (SACGA) and the South African Sugar Millers’ Association (SASMA) believe that more favourable economic conditions for sugar cane production and processing need to be fostered in order to protect and grow the sector.


Report Coverage


The report on the South African sugar industry examines current conditions, the difficulties faced by producers and the factors that influence the success of the sector. Profiles for nine companies active in the sugar industry are provided. These include RCL Foods Sugar and Milling (Pty) Ltd t/a TSB Sugar, which has sugar estates and three sugar mills, and Gledhow Sugar Company (Pty) Ltd which produces 1.55 million tons of sugar cane and 132,000 tons of sugar per annum. The company in partnership with the Ithala Development Finance Corporation has supported farm ownership by small-scale farmers, which has resulted in increased agro-processing activity. Between 45% and 50% of Gledhow’s sugar cane is sourced from these land reform growers, who are also shareholders in the mill.


Page
1. INTRODUCTION 1
2. DESCRIPTION OF THE INDUSTRY 1
2.1. Industry Value Chain 2
2.2. Geographic Position 4
3. SIZE OF THE INDUSTRY 4
4. STATE OF THE INDUSTRY 7
4.1. Local 7
4.1.1. Corporate Actions 12
4.1.2. Regulations 12
4.1.3. Enterprise Development and Social Economic Development 15
4.2. Continental 17
4.3. International 19
5. INFLUENCING FACTORS 20
5.1. Economic Environment and Rising Operating Costs 20
5.2. Government Initiatives 21
5.3. Land Reform 21
5.4. Health Concerns 22
5.5. Technology, Research and Development (R&D) and Innovation 22
5.6. Labour 24
5.7. Cyclicality 25
5.8. Environmental Concerns 25
6. COMPETITION 27
6.1. Barriers to Entry 28
7. SWOT ANALYSIS 28
8. OUTLOOK 29
9. INDUSTRY ASSOCIATIONS 29
10. REFERENCES 30
10.1. Publications 30
10.2. Websites 30
COMPANY PROFILES 31
A J PRODUCTS (NATAL) CC 31
A J PRODUCTS (WESTERN CAPE) CC 32
CROOKES BROTHERS LTD 34
GLEDHOW SUGAR COMPANY (PTY) LTD 38
ILLOVO SUGAR AFRICA (PTY) LTD 40
RCL FOODS SUGAR AND MILLING (PTY) LTD 43
TONGAAT HULETT LTD 47
U C L COMPANY (PTY) LTD 51
UMFOLOZI SUGAR MILL (PTY) LTD 54