Sugar

KwaZulu-Natal leads in sugar production.

SECTOR INSIGHT

Times are tough in the sugar industry.

For the first time in nearly a decade, some commercial sugar farmers in the Pongola area have returned to planting cotton as a rotational crop. This is according to the 2018 annual report of the KwaZulu-Natal Agricultural Union. Diversification is a good thing, but this move perhaps also points to the downward trend in overall sugar production.

KwaZulu-Natal is South Africa’s biggest sugar producer. Most of South Africa's 14 sugar mills are in KwaZulu-Natal, as are the headquarters of the biggest companies.

The South Africa Cane Growers’ Association (SACGA) described the 2017/18 season as “one of the toughest in the history of the South African sugar industry”. Although more land was cultivated (after the drought) and revenue was up, the price of sugar was so low that some growers were said to be at risk of business failure.

Fourteen sugar mills crushed a total crop of 17 388 177 tons of cane to produce 1 994 607 tons of sugar during the 2017/18 crushing season. The cane crop was 2 313 567 tons larger than the 2016/17 crop of 15 074 610 tons.

About 40% of local production is exported. The SACGA represents about 24 000 growers who produce about 20-million tons of cane.

A new industry structure, allowing for multiple grower associations, has been agreed to by the SACGA, the Department of Trade and Industry

ONLINE RESOURCES

South African Cane Growers’ Association: www.sacanegrowers.co.za South African Sugar Association: www.sasa.org.za South African Sugar Technologists Association: www.sasta.co.za Sugar Milling Research Institute: www.smri.org

(dti) and the relevant parliamentary portfolio committee.

Neither of the Big Two com panies relies exclusively on South African sugar earnings: Tongaat Hulett has a big property port folio and Illovo draws most of its profit from operations elsewhere in Africa.

Tongaat Hullet Sugar has agreed to a R52-million sugarcane-growing project which will see co-operatives and contract farmers plant cane on 3 000ha at Felixton, Maidstone and Darnall.

Illovo and Tongaat Hulett are the major operators of sugar mills. Other millers are Gledhow, ULC, Umfolozi and Tsb (which has a further two mills in Mpumalanga). Illovo has four mills, three sugarcane estates, four sugar factories, a refinery and three downstream operations that make products such as furfural, furfuryl alcohol, ethyl alcohol and lactulose.

The four mills run by Tongaat Hulett are located on the North Coast while the central refinery is in Durban and the animal feed plant, Voermol, is near Tongaat.

The Sugar Terminal at Maydon Wharf, Durban, serves 11 mills and can store more than half-amillion tons of sugar. It also has a molasses mixing plant.

Stimulating the agri sector in KwaZulu-Natal

The new CEO of the Agribusiness Development Agency, Zenzele Ndlela, is upbeat about the ADA’s new mandate.

Africa has been identified as a sleeping economic giant in terms of its resource potential. Agriculture has the potential to transform the African continent provided all the African countries can work together towards providing support to farmers.

This is according to the newly appointed CEO, Zenzele Ndlela, of the Agribusiness Development Agency (ADA). “We all need to put our heads together and stimulate this sector in order to eradicate the twin problems of poverty and food crisis,” he says. ADA is a public entity that was established as a “one-stop-shop” to assist entrant black commercial farmers who had acquired land through the Land Reform Programme. However, the entity has taken on a new strategic direction and aligned its services with those of the Department of Agriculture and Rural Development (DARD). “We seek to promote, establish, facilitate and support the growth of blackowned and managed agricultural enterprises along

agricultural value chains in KwaZulu-Natal through partnerships with individuals, communities, the private sector and other public sector institutions in order to achieve a transformed agribusiness sector,” Ndlela says.

“There was a need to have a separate entity that would accelerate the provision of a comprehensive support package to black commercial farmers” says Ndlela. ADA has positioned itself to resuscitate as well as develop commercial agriculture and has been able to increase the value of farms owned by black commercial farmers, reduce the number of farms being repossessed as well as deal with the declining local economies of rural towns that relied on commercial agriculture.

Ndlela notes, “It must be noted that we have reviewed our mandate and shifted our strategic focus to the entire value chain in agri-business. Our interventions have changed the agricultural landscape in the province. Providing funding to beneficiaries improved their agribusinesses and welfare and enabled them to gain access to markets through capacity building programmes.

“The positive attitude and optimism among our beneficiaries towards farming is linked to the newly gained confidence in their skills (farming techniques, marketing, value addition, etc.) which they received from ADA,” says Ndlela. “We have turned around ailing farms including dairies, piggeries, grain farms, vegetable farms and livestock farms from zero production levels to where they are able to consistently supply the market.”

The ADA has trained 1 726 individuals and created and/or sustained a total of 2 250 jobs during the construction of physical infrastructure, planting and harvesting seasons, all within the Enterprise and Value Chain Development Programme.

1.

VISION

“A diverse, deracialised, prosperous, and sustainable agribusiness sector in KwaZulu-Natal.”

2.

3.

MISSION

The ADA strives to promote, establish, facilitate and support the growth of black owned and managed agricultural enterprises along agricultural value chains in KwaZulu-Natal through partnerships with individuals, communities, private sector and other public sector institutions in order to achieve a transformed agribusiness sector in the province.

OUR VALUES

Organisational values define the key principles and associated behaviours that are required by employees when executing the strategy and functions of the organisation and state what the beneficiaries and stakeholders can expect from the organisation. The values of the ADA are:

Integrity: We commit ourselves to ensuring that our purpose, practices and values are ethically sound, at all times Accountability: We take accountability for all our actions in dealing with our Clients and Stakeholders and are mindful of possible consequences emanating from our decisions Excellence: We commit to providing quality services and products to all our clients at all times consistent with the spirit of Batho-Pele Innovation: We commit to strive for continuous improvements through innovation and promoting a learning organisational culture

4. FOCUS ON OPERATION

In keeping with the outcome of the alignment process between DARD and ADA, the Agency will concentrate on the following: • agribusiness development and in particular on agro-processing • on high impact and complex projects that will assist in unlocking public and private resources, as well as assistance in turning around declining industries • look at niche and new products that support import substitution and exports

5. OUR PRODUCTS AND SERVICE OFFERINGS

We have developed products and services according to four broad areas in supporting agribusiness development:

Knowledge and Information Services –these include design and dissemination of agribusiness models, agribusiness training modules and business leadership development;

Financial Resources Mobilisation – these include targeted development finance and investments;

Agribusiness Facilitation Services – these include connecting agribusiness entrepreneurs to information, technological innovations and markets; Agribusiness Market Infrastructure Services –these include agribusiness capacity and systems development; as well as investments in infrastructure.