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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.
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.