Tongaat Hulett’s Zimbabwe-listed unit, Hippo Valley, is building its own power-generating sites as it expects no significant disruption from the current El Niño-induced drought.
Tongaat Hulett controls Hippo Valley and non-listed Triangle Sugar Corporation, all situated in Zimbabwe’s Lowveld region. Despite facing accounting and financial hurdles at corporate-level, Tongaat Hulett has invited bids for the building of independent power plants in Zimbabwe, which is facing severe electricity supply deficits that are impacting productivity,
“The company invites tenders from bonafide companies that have proved capability in the establishment of solar power plants. The company’s requirements are as follows: Triangle sugar mill 5000KW; Hippo Valley sugar mill; and Mwenezana Estate 1 500KW,” reads a part of the company’s tender invitation.
In the quarter to June, 2024 Hippo Valley’s increase in sugar-cane production was driven by a combination of better yields, increased harvesting targets in line with total cane delivery projections which are expected to exceed the prior year, and a more consistent rate of sugar-cane delivery and improved mill uptime.
“Private farmer performance increased following early cane deliveries, unlike the prior year that was impacted by delays emanating from late conclusion of supply agreements. With the successful crop (annual) maintenance to ensure more plant reliability, the mill is performing optimally with good crush rates ahead of target and better than prior seasons,” said Hippo Valley.
Domestic sales for the quarter dropped by 7% in comparison to the prior period, the company said, adding that the spill-over effects of duty-free sugar imports were still noticeable during the period under review.
This was despite the repeal of the duty-free imports of sugar products effective on February 1, 2024. Moreover, the company’s sales performance was impacted by a slow start from the country’s sugar refineries although this has since recovered.
Tongaat Hulett’s Zimbabwean-listed unit believes “with the good start in sugar production, positive milling performance and continuous engagements with the authorities, there will be no need for the reintroduction of duty-free sugar imports in the current” and ensuing years.
Although there was a decline in sugar exports during the June quarter, this was attributed to the company’s deliberate prioritisation of the domestic market in the first quarter to ensure consistent product availability to all local consumers and customers.
“The industry is on course to fulfil all critical export commitments. The industry has adequate sugar to satisfy both the local and export requirements,” Hippo Valley said.
It expects better returns in the remainder of the year, augmented by improved agricultural output, positive mill performances, and enhanced commercial re-engineering.
“The company assures adequate sugar stocks for the year including meeting all critical sugar sales requirements before the commencement of the next season to cover the domestic market, and then critical export market demands. As stated above, the drought experienced will not affect the industry’s anticipated current year performance,” Hippo Valley said.
BUSINESS REPORT