KwaZulu-Natal Correspondent
SOUTHERN Africa's largest sugar producer, Illovo Sugar, is to sell more farms to black entrepreneurs this year, resulting in nearly a third of company-owned land being transferred to emerging farmers since 1996.
Nonexecutive chairman Robbie Williams said in the annual report that the group was continu ing to focus on the various pillars of black economic empowerment, essentially the development of small-scale and larger commercial local growers.
The sale of company cane farms to black farmers brings to 27,5% the amount of cane land that has been transferred under the medium-scale farm development programme.
The move comes as the sugar industry attempts to change its image to include more black medium-scale and commercial farmers. Although black farmers have always played a role, a vast majority of them are small-scale or subsistence farmers.
Williams said the company procurement programme was also a catalyst for the development of a range of small and medium businesses.
Illovo has operations in SA, Malawi, Zambia, Swaziland and the US.
Williams also repeated his warning to shareholders that the current sugar season would be affected by "disappointing rainfall in SA this past summer". Initial cane estimates showed figures could be 12,5% lower than the record 2002-03 crop. This could have a knock-on effect on production at the Sezela downstream production plant.
He issued similar warnings when the company released its full-year figures to March recently . His predictions come off a high base of production of 2,3-million tons of sugar.
Williams said that in the irrigated areas in the rest of the group's African operations, the cane was "looking excellent", but final production still depended on weather conditions during the remainder of the season.
Williams also stressed that profits from foreign operations were affected by the currency translation with the stronger rand. Illovo would suffer "a significant negative effect on earnings" should the rand continue at these levels.
Williams said illegal sugar imports into some of the African countries in which Illovo has operations had again been a concern in the past year. However, management was cheered that the governments in the affected countries had "responded positively" to stem the flow.
"It is vitally important to both the economies of the region and the group that the long-term viability of the local sugar industry is not negatively affected by illegal imports of dumped sugar," he said.
Jun 18 2003 07:20:56:000AM Nicola Jenvey Business Day 1st Edition
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