Challenges Impact South Africa's Sugar Industry as Production Declines

Dublin, Nov. 13, 2023 (GLOBE NEWSWIRE) -- The "Manufacture of Sugar in South Africa 2023" report has been added to's offering.

This report provides insights into the state of South Africa's sugar industry, including challenges, production trends, key players, and international footprint.

Overview of South Africa's Sugar Industry

South Africa's sugar industry ranks among the top 15 in the world in terms of sugar production volume out of approximately 120 sugar-producing countries. However, the industry has faced significant challenges in recent years, including:

  1. Drought: Persistent drought conditions have impacted sugarcane production.
  2. Sugar Tax: The effects of the sugar tax have affected the consumption of sugary beverages.
  3. Unrest: Unrest in certain regions has disrupted production and supply chains.
  4. Floods: In 2022, floods affected the main sugar-producing province of KwaZulu-Natal.
  5. Financial Crisis: Tongaat Hulett, the country's largest sugar producer, went into business rescue due to financial difficulties.
  6. Declining Production: Sugar production has been on a steady decline over the past two decades.
  7. Job Losses: The decline in production has led to a decrease in small-scale sugarcane farmers and jobs in the sugar-related industry.
  8. Infrastructure Aging: Concerns exist about the declining cane-processing capacity at mills due to a lack of investment in aging infrastructure.

Key Developments

  • Tongaat Hulett, which accounts for a quarter of South Africa's sugar production, entered business rescue in 2022 due to financial issues, cost increases, and fraud by former executives.
  • In 2021, two sugar mills in KwaZulu-Natal closed due to financial challenges.
  • In March 2023, the Gledhow sugar mill also entered business rescue, citing reasons such as unrest, flood damage, and rising supply costs. There are concerns that more sugar mills may follow suit.

African Footprint

South African sugar companies have a significant presence in Africa:

  • Tongaat Hulett has operations in Mozambique, Zimbabwe, and Botswana, each funded independently.
  • Illovo Sugar Malawi is listed on the Malawi Stock Exchange and has operations in multiple African countries.
  • RCL Foods has a stake in Royal Eswatini Sugar, one of the largest companies in Eswatini.

Report Coverage

The "Manufacture of Sugar in South Africa 2023" report covers various aspects of the industry, including capacity, production, consumption, industry masterplan, sugar tax, key players, and recent developments. It profiles nine companies, including Tongaat Hulett, Gledhow, RCL Foods (TSB Sugar), and Illovo Sugar, among others.

South Africa's sugar industry faces numerous challenges that have contributed to a decline in production and job losses. Key players in the industry are grappling with financial difficulties and business rescues, while aging infrastructure hampers processing capacity. The industry's future may depend on addressing these challenges, finding innovative solutions, and adapting to changing market dynamics.

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