|
TNT
THGL
TNT - Tongaat-Hulett - To Expand sugar production in Mozambique for the EU
Market
The Tongaat-Hulett Group Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1892/000610/06)
(Share code: TNT)
(ISIN: ZAE000007449)
TONGAAT-HULETT GROUP TO EXPAND SUGAR PRODUCTION IN MOZAMBIQUE FOR THE EU MARKET
The Tongaat-Hulett Group (THG) has approved a R1,3 billion expansion of its
sugar milling and cane growing activities at its Xinavane and Mafambisse sugar
mills in Mozambique. This follows the announcement of a R950 million rolled
aluminium products expansion in October 2006, the acquisition of a 50,35% stake
in Hippo Valley Estates in Zimbabwe and THG`s announcement on 14 December 2006
providing details of its plans to unbundle and list Hulett Aluminium (Hulamin),
the simultaneous introduction of broad based Black Economic Empowerment (BEE)
equity participation in both Hulamin and TH and a return of capital of R500
million to THG shareholders by way of a share buy-back.
THG will change its name to Tongaat-Hulett (TH) and will be repositioned as a
focussed agri-processing business, which includes the integrated components of
land management, agriculture and property development activities.
Tongaat-Hulett CEO Peter Staude said, "The expansion of Xinavane and Mafambisse
is directly aligned to a key element of TH`s strategy, namely of growing
earnings through expansion of sugar production in low cost regions that have
superior market realizations. A solid platform has been established in
Mozambique over the past six years. We will use this base to expand low cost
sugar production at our two factories from 115 000 tons in 2005 to over 270 000
tons at the time when the EU markets open up to LDC sugar producers. The EU
delivered price will remain fixed from 2009 until 2015 at the equivalent of 19.6
US c/lb. Our targeted cash cost for producing sugar in Mozambique of some 8.5 US
c/lb compares favourably with Brazil."
"The R1,163 billion Xinavane expansion will see sugar production increasing from
61 000 tons in 2005 to 180 000 by the 2009 season.The mill infrastructure will
be refurbished and/or upgraded, with new equipment being installed to increase
the design crush rate from 150 to 380 tons cane per hour, achieving globally
competitive economies of scale. Commissioning of the expanded factory will take
place in April 2009. Cane growing activities will be expanded by the planting
up in 2007 and 2008 of an additional 6 500 hectares under irrigated cane taking
the annual cane crush from 509 000 tons in 2005 to 1,5 million tons. The
additional sugar production of 119 000 tons will be sold partially in the
domestic Mozambican market with the balance being exported into the European
Union (EU) in terms of Mozambique`s duty and quota free access from 2009 under
the Everything-But-Arms (EBA) initiative for Least Developed Countries (LDC)
countries", said Staude
" The expansion will be funded by a combination of equity and debt financing
from within Xinavane. Agreement has been reached with the Government of
Mozambique in terms of which TH`s stake in Xinavane`s milling activities will
rise from 49% to 88%. The expanded agricultural operations will remain 100%
owned by TH", he confirmed.
Staude indicated that "the Mafambisse expansion entails the planting of a
further 2 100 hectares under cane. This cane will be irrigated from the recently
constructed Muda dam near Mafambisse and will increase production at the mill to
82 000 tons per annum over the next two years."
The two expansions will have a positive socio-economic impact on the region with
the creation of 6 638 and 2 145 new jobs in Xinavane and Mafambisse
respectively.
Plans are well advanced for a further 34 000 tons expansion at Mafambisse, which
will result in total production rising to 116 000 tons per annum.
Total sugar production capacity across all of TH`s regional sugar businesses is
expected to rise to some 1,9 million tons by 2009. TH`s total sugar production
was 1,160 million tons in 2005.
The Xinavane project is subject to:
A favourable outcome to the EIA process currently underway,
South African Reserve Bank Approval.
25 January 2007
Tongaat
Sponsor
INVESTEC BANK LIMITED
Date: 25/01/2007 07:00:02 Produced by the JSE SENS Department.
| Profile Group (Pty) Ltd. has taken care in preparing all information on this website, but does not accept any liability for errors or out-of-date information. | |||||||||||||
| Other Profile Group sites: FundsData Online (unit trust data) | Profile Group corporate site | |||||||||||||
| [ Terms of Use | Privacy Policy | PAIA manual | FAQs/Help | Site Map | © Copyright Reserved 2026 ] | |||||||||||||
|
|||||||||||||
