ZAMBIA: Zambia Sugar 2012/13 production seen at 400,000 tonnes
Published: 07/18/2012, 2:31:40 PM
Zambia Sugar Plc is this year expected to exceed 400,000 metric tonnes of sugar production for the first time since completion of the recent major agricultural and factory expansion project, according to Zambia's Daily Mail newspaper.
According to the company's 2012 annual report posted on the Lusaka Stock Exchange, a more mature cane crop with an increase in area harvested that includes full realisation of the Magobbo small-holder scheme will increase cane supplied to the mill during the coming year.
The report adds that 2012/13 season commenced in the second week of April, and the factory quickly reached rated capacity.
The company projects that with improved economic conditions, domestic market sales demand will be enhanced.
Zambia Sugar further anticipates increased export earnings from the continued sugar deficit in the region coupled with higher realisations from European Union (EU) exports.
"Weather conditions and movements in exchange and interest rates will continue to influence profits. The effective control of operating costs will remain crucial as commodity prices increase globally and inflationary pressures persist," reads the report.
The company's domestic market sales increased to 145,000 tonnes from 143,000 tonnes the previous year, with the balance of annual production being exported to the EU and nearby regional markets.
It adds that the trading environment was characterised by sound economic fundamentals domestically,with growth in the agricultural, construction and mining sectors.
The company's export earning benefited from a weaker Kwacha against both the Euro and US dollar coupled with strong sugar demand and improved pricing in regional markets.
Quota-free, duty-free sugar exports to the EU increased significantly to 156,000 tonnes from 108,000 tonnes in the previous year.
Zambia Sugar has continued to benefit from its well-established sugar marketing and distribution systems across the country.
The company is the largest employer in Mazabuka district and has an extensive indirect financial impact on the surrounding community through the payment of salaries, wages and benefits to employees.
It adds that ZMK239 billion (US$48.8 million) in the 2011/12 season was paid to outgrowers for cane delivered.
The company, through the Mazabuka Sugar Cane Growers Trust, has continued to support the Kaleya Smallholder Scheme which, together with the associated commercial farming operation, delivered a total of 231,000 tonnes cane to the mill during the 2011/12 season.
The support provided to the scheme by the trust includes the funding of a three-year replant programme on 400 hectares to improve cane yields.
It adds that the trust has instituted a minimum yield subsidy for a period of two years, provided grant funding towards irrigation infrastructure projects, and continues to provide bridging finance to smallholders where needed. Zambia Sugar is settler of the trust.
The company has further enhanced its business linkages with local small and medium scale enterprises by partnering with the Mazabuka District Business Association through a preferential procurement arrangement aimed at promoting business development in the local community.