Manufacture of Sugar
South Africa is a major sugar producer on the continent. The country’s crippled economy, cheap imports, changing consumption patterns, low international sugar prices, and the tax on sugar-sweetened beverages are some of the factors that have caused the industry to decline over the past few years. According to the Department of Trade, Industry and Competition, the local sugar industry needs to consider diversifying its products if it is to remain viable and create jobs. The government has pledged to work with sugarcane growers and millers and announced it would produce a master plan for the sector.
South Africa and the Global Market
The industry continues to face major challenges and is struggling to operate in the global market. The industry’s decline has largely been due to declining sales volumes, the sugar tax, low international sugar prices, and competition from cheap imports, mainly from Brazil and recently Eswatini. Increasing volumes of cheap imports from subsidised global producers has led to a decline in small-scale sugarcane farmers in rural areas and the mothballing and closure of two sugar mills for the current season.
Biofuel and Renewable Electricity
The industry believes in the need to diversify into biofuel, other cane-derived products and other suitable crops. Sugar mills produce their own electricity from sugarcane biomass. The industry estimates that it could supply at least 400MW of electricity to the grid if the mills had access to soft loans for the installation of additional boilers and factory upgrades. Studies have shown that a biofuel programme could create thousands of new jobs in rural areas and reduce fuel imports.
This report focuses on the manufacture of sugar in South Africa, with information on the state and size of the sector, major players and their brands and performance, and factors influencing the sector. There are profiles of nine companies including notable players such as Tongaat Hulett, Illovo and RCL Foods and mills such as Umfolozi