Leading Southern Africa based agri-business in sugar, Tongaat Hulett has recorded a 34% increase in revenue in the first quarter of 2021 and a 7% increase in sugar sales, BusinessMail has learnt.
In a statement showing its performance for the first quarter of 2021, the company shows a total revenue of ZWL16.8 billion which higher than ZWL12.5 billion recorded in the last quarter of 2020 with 34%, total industry sugar sales of 440 000 tons and a hippo share of industry sugar sales 50.0%.
Tongaat Hulett chairman Canaan Dube and Chief Executive Officer Aiden Mhere has attributed the positive development to a relative slowdown of inflation over the current year compared to prior year.
“This was attributable to the introduction of the foreign currency auction system which improved business confidence during the last half of the financial year, with year-on-year inflation decelerating to 241% in March 2021, compared to 676% in the prior year. The return to the multi-currency system on the local market in March 2020 led to increased foreign currency into the formal market, and improved the ability of industry to generate free funds to meet offshore obligations,” they said in a joint statement.
Sugar production at the company, however, amounted to 204 384 tons which is minus 4% from 212 004 tons produced in 2020.
Overall cane deliveries from the Company’s plantations (miller-cum-planter) and private farmers were impacted by irrigation power challenges and the dry spell experienced during the 2019/20 peak growing period of 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.
“Whilst the drop in cane from traditional industry sources was compensated for by cane sourced from a third party, sugar production reduced by 4% on the back of lower than expected mill efficiencies and inclement weather conditions (incessant rains) which impacted cane quality. Steps were taken during the January to April 2021 off-crop period to overhaul the mill to ensure improved performance in the 2021/22 production year, whilst solar projects to augment electricity supply at critical water pumping installations are under consideration,” reads the statement.
Tongaat Hulett is in the favourable position of being able to capitalise on the changing global sugar fundamentals, using the business’s SADC based sugar operations and its preferential market access. The company’s leading sugar brands and existing distribution networks will enable Tongaat Hulett to benefit from the growing per capita consumption of sugar in the SADC region.
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