Illovo Sugar

Illovo Sugar

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ILLOVO SUGAR

Africa’s biggest sugar producer investing in the continent’s growth story

T

he Illovo Sugar group is Africa’s biggest sugar producer which runs extensive agricultural and manufacturing operations in six African countries.

The group produces raw and refined sugar for local, regional African, European Union (EU), USA and world markets from sugar cane supplied by its own agricultural operations and independent outgrowers who supply cane to Illovo’s factories.

High-value products manufactured downstream of the sugar production process are sold internationally into niche markets.

Illovo is strategically positioning its operations to respond to Africa’s increasing sugar consumption growth, forecast to grow by six million tons by 2020. It uses renewable resources to provide around 90% of the energy required for its operations. The group is

listed on the JSE Limited and is a subsidiary of Associated British Foods plc which holds 51.4% of the issued share capital.

COUNTRIES OF OPERATION AND MARKETS “The group’s countries of operation provide good climatic and soil conditions, which, accompanied by irrigation from secure and sustainable water sources, are ideal for the cultivation of high-yielding and high-quality sugar cane,” states Illovo.

Illovo harvested 6.1 million tons of sugar cane in the 2013/14 season.

Combined with cane supplied by independent out-growers in all six countries of operation, the group has the capacity to produce more than two million tons of sugar annually.

It supplies sugar to the consumer and industrial markets in its own countries of operation and to neighbouring

regional African markets, using an extensive network of distribution and logistics channels.

Illovo exports sugar to the EU and USA and through the South African sugar industry, sells sugar into the world market. Syrup and speciality sugars are produced in South Africa and Zambia mainly for domestic consumption, while speciality sugars made in Malawi and Zambia are produced for preferential markets in the EU and in the case of Malawi, also for the USA.

PRODUCTION “The majority of our downstream production is sold internationally into high-value, niche markets,” says Illovo.

“Furfural and its derivatives are produced at the Sezela mill complex on the south coast of KwaZulu-Natal while high-quality ethyl alcohol, from which various grades of alcohol are made, is produced at the Glendale distillery on the north coast and at our Merebank plant in Durban, which also manufactures lactulose.”

In Tanzania, Illovo operates a newlycommissioned distillery which is adjacent to its Kilombero mills. This supplies potable alcohol to the local and regional beverage industry. In addition to the production of potable and denatured alcohol from molasses in South Africa, opportunities to expand Illovo’s involvement in this area of operation are being explored across the group.

Established in 2001, Barloworld Logistics has grown into a significant supply chain solutions business in southern Africa with complimentary operations in the Middle East, Spain, Germany, the United Kingdom and the United States of America.

Combining a smart approach with innovative thinking and supply chain foresight, we design, implement, manage and operate smart supply chain solutions that grow our clients’ bottom lines.

Smart Partnerships form the cornerstone of creating a competitive advantage for our clients. Not only do they enable us to create truly customised supply chain solutions, but a culture of collaboration and accountability. Through partnerships with key industry players, Barloworld Logistics has developed numerous inhouse and world-class competencies and received many industry and supplier accolades and awards.

As an international provider of smart supply chain solutions, Barloworld Logistics’ focus on specific industries enables us to create depth of experience and invaluable expertise within the chosen sectors. We are then able to leverage this knowledge for the benefit of our clients.

Barloworld Logistics is not only focused on making profits and performing at our peak.

We are committed to creating sustainable opportunities that benefit us individually, as a company, the communities in which we operate, and the environment.

SOCIO-ECONOMIC IMPACT Illovo is more than aware of its responsibilities in the areas in which it operates. The group aims to ensure reliable cost-effective energy supply utilising bagasse and biomass generated from its operations, and where attractive, to export power into the national grids of those countries.

Illovo operates in four countries that the UN classifies among the world’s least developed - Malawi, Mozambique, Zambia and Tanzania. The group makes a concentrated effort to help with the challenges presented by poverty, unemployment, inequality and disease in this regions.

“The group has a significant positive impact on the rural communities in the areas in which we operate, inter alia, by creating valuable jobs and economic opportunities, and providing accommodation, healthcare, educational assistance and basic services to employees,” says Illovo.

Where no such facilities exist, the group provides medical care to communities, assists in education delivery, provides municipal and civic services and access to water and sanitation, and participates in community outreach programmes.

“Considerable training and other support is provided to local small

Logistics Smart Supply Chain Solutions

Here’s to a decade of sweet success.

In smart partnership with Illovo Sugar, Barloworld Logistics created a smart, innovative supply chain solution geared to deliver sustainable results, while driving profits up and delivering value both ways.

Optimising our skills, resources and transport services across the business, we reduced the pallet-holding period by 36% and loading turnaround times by 58%.

Integrating seven systems across both companies, we improved on-time delivery from 82% to 95%, increasing customer service levels.

SUGAR

SUGAR

Committed to delivering value all round, we’ve won numerous awards for supply chain excellence, and raised the bar on safety.

Driving continuous improvement and operational excellence from within, we cut supply chain costs by 15%.

HOT

In 2014, we were awarded three National Occupational Safety Association (NOSA) Awards and received the prestigious NOSCAR Award.

If you’re looking for a smart supply chain solution designed to grow and expand your business, call Mike Fanucchi on (011) 445 1600.

www.barloworld-logistics.com

“Illovo is continually

investing in the continent”

strong financial position to capitalise on numerous branding opportunities on a retail level in first-world markets and to strengthen our downstream product offering, benefitting from the success of our distillery commissioning in Tanzania.

“Ethanol is a valuable growth area for us, with plans in the pipeline to expand ethanol and furfural production in Zambia, South Africa and Swaziland. Our differentiated speciality sugars will be another important area of focus and growth.

We have direct access into EU and UK markets, and there has also been a shift away from EU sales to regional markets where we believe we will realise better returns.” medium-scale growers in order to promote sustainable agriculture and economic development activities.

The total cane supplies from these growers and community-based co-operative schemes amounts to approximately 3.6 million tons annually.”

CONTINUOUS INVESTMENT Illovo is continually investing in the continent, and it knows the future business continuity depends on its ability to innovate and to identify projects that will create diversified and sustainable revenue-streams for the longer-term.

Gavin Dalgleish, Illovo’s Managing Director, stated in the company’s 2014 Annual Report: “We are very optimistic about our future and are currently in a

“Through increased downstream production, we are confident that our strategic focus areas, as well as our continuous improvement programme, will bring about positive changes across the group, sustain our growth and ensure momentum going forward into 2015.”

Alton, Richards Bay

Umlaas Road

The Newlyn Group was established in 1996 to avail itself of the opportunities within the Port Logistics sector.

Cnr Sydney & Rick Turner Road

The Group’s focus is the creation of operationally efficient storage facilities in close proximity to the coastal and inland ports. These facilities are located in Durban, Pinetown, Pietermaritzburg, Johannesburg, Richard’s Bay and Cape Town. The group has acquired various properties and effected improvements to some thereby creating operationally efficient warehouses that ensure high levels of occupancy with blue chip tenants.

The Group is working on some exciting major developments:- 500 000 m2 site situate at the entrance to the port of Richards Bay - 100 000 m2 site situate in Clayville - 100 000 m2 site situate along the N3 corridor between Durban and Pietermaritzburg - 150 000 m2 platform adjacent to the R385 in Hammarsdale

Briardale, Richards Bay

- 13 000 m2 site on the corner of Rick Turner and Sydney Road.

Newlyn Investments Kelly Group House, 39 Florida Road, Durban t +27 (031) 313-6500 f +27 (031) 313-6501 e marketing@newlyn.co.za w www.newlyngroup.com

Oliver Moy Publisher

For enquiries email okm@aubusinesscoverage.com

African Business Coverage Issue 9