Zambia Sugar describes processing period as very challenging in the face of Kwacha volatility

The Zambia Sugar PLC has closed the sugar production and processing period for the 2015/2016 season and described the year as very challenging due to the volatile local and international economic environment.

Zambia Sugar PLC Managing Director, Rebecca Katowa, says the failing Kwacha during the 2015/2016 season resulted into high procurement costs while plummeting commodity prices on the international market caused the dwindling inflow of foreign exchange for the company.

Mrs Katowa says the business also witnessed unprecedented increases in the company’s critical inputs such as fertilisers, field chemical and haulage services during the season.

“In particular, the prices of fertiliser have increased by 60 per cent while haulage costs have increase by about 35 per cent. At the same time, we have been hit by a power tariff increase of 176 per cent by Zesco,” she explained.

She was speaking in Mazabuka last night during the 2015 staff off-crop party.

Mrs Katowa further disclosed that the company had to battle with aphid infestation which affected the entire cane growing area in Mazabuka.

The Zambia Sugar Managing Director said this yellow aphid infestation resulted into low cane yields for Zambia Sugar and the farmers in the out-grower scheme.

“These headwinds have brought us at a point where we have to make sound decisions in order to survive and remain in business,” she said.

Mrs Katowa explained that the company had to, therefore, focus on market development, revenue enhancement, quality assurance and cost reduction, which she said were areas under Zambia Sugar control.

She pointed out that to support these strategic imperatives, Zambia Sugar will enhance the human resource and skills development programme, redefine and straighten out procurement systems and supply chain development.

She said the company will further implement cost management strategies.

“All these will be anchored on foundations of safety and risk management, continuous improvement, legal and governance, communications and stakeholder management,” she said.

Mrs Katowa has, however, disclosed that the company managed to score achievements during the season.

She said the tons of refined sugar made hit a recorded of 44,283 during the 2015/2016 season, beating the 2013 record of 43,979 tons.

“This has resulted into another record for tons refined bagged of 43,755 exceeding the 2013 record of 43, 531,” she said.

Mrs Katowa added that the record for tons bottler grade made was 24,235 tons, exceeding the 2014 record of 21,576 tons.

“Our extraction was a record 96.23 beating the 2014 of 95.94,” she said.

Meanwhile, the Zambia Sugar company won various awards during the season under review despite many challenges it faced.

Mrs Katowa disclosed that from the Illovo Group, which owns the sugar companies in the region and beyond, Zambia Sugar was awarded with the 2015 best agricultural performance award, 2015 best factory performance and the 2015 marketing performance.

Other awards which the company won were from the Zambia Chamber of Commerce and Industry (ZACCI), the Zambia Environmental Management Agency (ZEMA) and the Agricultural and Commercial Show Society, the International Trade Fair and the Southern Province show.

And Mrs Katowa has said for the medium and long term projections, the company will focus on completing the product alignment and refinery project, which will help it retain and increase its market share at both local and regional markets.

Zambia Sugar plants a total of 17,000 hectares while out-grower scheme farmers cover 11,000 hectares of cane sugar.

The total number of hectares covered for cane production under Zambia Sugar in Kafue flats is 28,000.