SA group eyes sugar production of 280,000 tons in Mozambique

21 July 2006

Maputo, Mozambique, 21 July – South Africa’s Tongaat-Hulett group, with interests in two sugar plantations in Mozambique, announced this week that it could achieve its goal of producing 280,000 metric tons of sugar this year in the country, more than twice the amount produced in 2005.

The company has steadily boosted its sugar production in Mozambique from 35,000 tons in 2001 to 115,000 tons last year.

Tongaat-Hulett, based in Durban, owns 49 percent of Açucareira de Xinavane in Maputo province and 75 percent of Mafambisse in central Mozambique, operations that are in “major expansion” according to its CEO, Peter Staude.

News of the group’s expected yearly production from its Mozambique operations was given at a presentation of provisional half-year results. The company expects profits of around rands 297 million in the first six months of this year, compared to rands 208 million in the same period in 2005.

These rosy results are based on the company’s sugar production and property investments and the South African group says it is mindful of the “less-developed” status that Mozambique will have with the European Union from 2009.

This new situation will allow free access to EU markets for Mozambican sugar producers, a situation that has sparked takeover activity by multinationals who are interested in operating in the country.

Earlier this month, shareholders from South Africa’s Illovo group, operator of the Maragra plantation in the Maputo suburb, approved the entry of Associated British Foods into their company.

The UK firm’s rands 3.8 million bid was enough to see off a rival proposal from French group Tereos, already a partner in the Marromeu sugar plantation in the central province of Sofala.

Illovo, meaning elephant in the Zulu language, is the largest sugar company in Africa and besides being present in Mozambique also operates in Malawi, Tanzania and Zambia – all countries that will benefit from free access to the EU in 2009.

The Mozambican sugar industry directly employs 26,000, and another 4,000 indirectly, and exports mainly to the EU, United States and Southern African Development Community. (macauhub)