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Zambia Sugar Profile

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Zambia Sugar Profile 2015 Annual Report Zambia Sugar Profile A SUSTAINABLE BUSINESS STARTS WITH A SMART LOCATION ambia Sugar is located at the Nakambala Sugar Estates in the ZMazabuka District of Southern Province. Zambia Sugar is a rural development partner, operating Africa’s second largest sugar mill in the rural town of Mazabuka. The Company grows sugarcane at its Estate, situated about 125km south of Lusaka on 17,000 hectares of land. The company supports an outgrower scheme of about 160 small-scale farmers which grows sugar cane on another 12 000 hectares, contributing 40% of the three million tons of sugar cane milled at Nakambala. Favourable climatic conditions and quality cane husbandry continue to give good cane yields across the cane growing areas. ZAMBIA SUGAR’S HISTORY: A his first transaction was modest, STORY OF SUSTAINABILITY Dahl’s vision was not. Despite being AND ASSURANCE offered GBP 3 (equivalent to ZMW In 1954, Tony Dahl, the owner of 6 at that time) per ton over a long “Better ‘Ole” Farm, planted a few haul, he reasoned that he was well pieces of cane on the contour ridge placed to become a sugar producer of his maize field to protect it from in Northern Rhodesia, the forerunner heavy rains, cane that a friend had of Zambia. The next stage required brought back from Natal, South a mill and some machinery which Africa. The result was impressive, had to be imported from the United and he planted the first cane field in Kingdom Standard Bank Limited 1955. For the next four years his dairy provided the necessary financing cattle were well served by the silage and all was set to build the factory. from the field. It was not until 1960 After many disappointments, when Dahl produced cane surplus brown sugar was finally produced that he approached Chirundu Sugar on Monday, 29 July 1963 at “Better Estate to accept his surplus, on the ‘Ole” farm. Dahl proved to his many basis that he would receive one ton doubting friends and farming of molasses for every ton of cane colleagues that sugar could be supplied. produced in Northern Rhodesia. Dahl could not have envisioned At that time, raw sugar from that 60 years later the cane would Chirundu Sugar Estate, which was grow into a huge sugar estate at based on the Southern Rhodesian Nakambala in Mazabuka, a major side (present day Zimbabwe), was world-class business operation. transported to Ndola Sugar Refinery Today, Zambia Sugar, the successor to be refined into white sugar and to “Better ‘Ole” produces in excess eventually sold in Northern Rhodesia. of 400 000 tons of sugar annually, This operation was controlled by the translating into around ZMW 2 Tate & Lyle Sugar Company. Once billion in annual revenues. He would Dahl started to produce sugar on be pleasantly surprised at the a large scale he formed his own phenomenal growth of the company company, namely Dahlia Sugar in a challenging environment since Estates, and the first sugar was pre-Independence, to become the sold in 50lb paper packets labelled largest sugar producer in Zambia “‘Product of Northern Rhodesia, and the second largest single Dahlia Sugar Estates. Grown and sugar mill in Africa with over 6 000 produced in Northern Rhodesia’”. employees at peak, and an estimated population exceeding 16 000 on the field of cane he started. The company started as Northern Rhodesia Sugar Refinery, before it was called Ndola Sugar Refinery in the 1950s and later Zambia Sugar Company in the aftermath of Independence in 1964. Though the compensation for A member of TOP: Mr Tony Dahl admires his cane crop at Better ‘Ole farm in Mazabuka. RIGHT: A visitor on a tour at the old Ndola factory. LEFT: Structural work takes shape at Nakambala factory. ZAMBIA SUGAR PLC - A developed local distribution network LISTED COMPANY delivering sugar to all districts in Contents The Company is listed on the Zambia. This is done through a well Lusaka Stock Exchange (LuSE) and is organised depot system that ensures a subsidiary of Illovo Sugar Limited Whitespoon products are available, which through Illovo Group Holding anywhere and everywhere in Limited (IGHL) holds 75% of the issued Zambia. Whitespoon Industrial Sugar share capital while the remaining Range has been used in beverage, Financial Highlights 1 shares are held by local institutional confectionery and food processing investors (pension funds, banks, industries for decades. The company Chairman’s statement 4 companies) and over 3 000 members is committed to providing world class of the public, including employees. quality sugar products which meet Board of directors 6 Following the acquisition of international standards such as ISO 50.9% shares from Tate and Lyle 9001:2008 and Bottler Grade Sugar. Governance structure 9 in 2001, Illovo Sugar Limited made Zambia Sugar has two main a mandatory offer to minority Export Markets; namely the European Managing Director’s statement 10 shareholders and increased its Union (EU) and the Regional Market. The Tate & Lyle directors held of Dahlia Sugar Estates. The first shareholding to 89.71%. Illovo Zambia Sugar’s strategic location in Directors’ report 12 a meeting in Lusaka and at this mill at Nakambala was actually Sugar Ltd is Africa’s biggest sugar the Southern African Development meeting Lord Lyle said that Dahl lifted from Chirundu, at the time of producer and has extensive Community (SADC) region makes it a Sustainability 16 had saved Northern Rhodesia 10 great upheaval when then Southern agricultural and manufacturing supplier of choice for quality sugar to 20 years of experimental time. Rhodesia’s Ian Douglas Smith fell out operations in six African countries. and downstream products in the Focus on 2014 24 They offered to buy Dahl out on the of favour with Great Britain because The Company is based at Mount region and beyond. The regional condition that he would not go into of his Unilateral Declaration of Edgecombe, “KwaZulu-Natal”, South export market includes the Great Corporate governance 26 sugar production again. He accepted Independence (UDI) agenda. Africa and was founded in 1891. It Lakes Area (GLA), Democratic their offer, at a price a lot less Dahlia Sugar Estates was is a subsidiary of Associated British Republic of Congo (DRC), Southern Five year review 32 than it had cost him to start sugar then developed into the present Foods Plc. which holds 51% of the Tanzania, Zimbabwe, and the production. Nakambala Sugar Estate in 1966, at issued share capital. Associated Southern African Customs Union Value added statement 34 The crusher that stands in the which time the Ndola Sugar Refinery British Foods Plc. was founded in 1935, (SACU). While the regional market foyer at Nakambala Estate factory had been renamed Zambia Sugar and is now a diversified international is mainly supplied with Household Annual financial statements 35 in Mazabuka is in fact the original Company. food, ingredients and retail group Sugar, Brown Sugar and Industrial crusher from “Better ‘Ole” farm with over 96 000 employees in 44 Refined Sugar, the European market Notice of meeting 67 countries. Associated British Foods is mainly supplied with Refined Sugar, Shareholder’s diary/ MILESTONES Plc. has sales and manufacturing Raw Sugar, Golden Granulated and operations across Europe, the Golden Farmhouse Sugar. Americas, Africa, Asia and China. Corporate information 68 1966 - Tate & Lyle develops the Nakambala Estate as Zambia Sugar Company. The business is split into five OPERATING 1968 - Sugar production begins and the raw sugar is sent to Ndola for refining. segments: Sugar; Agriculture; LOCATIONS Form of proxy 71 Retail; Grocery; and Ingredients. 1972 - Industrial Development Corporation (INDECO) takes a 51% stake in Zambia Nakonde Sugar Company. The Sugar segment comprises of its sugar processing business, based Kasama 1975 - INDECO raises holding to 78% whilst Tate & Lyle retained 10.8% shareholding in Europe, Africa and China, and Mansa and provided technical and managerial services. is the second largest in the world. Headquartered in London, United 1990 - Operations consolidated at Nakambala Estate, and the refinery moved to Nakambala Solwezi Kingdom, ABF is listed on the London from Ndola. Kasumbalesa Stock Exchange (LSE) while Ndola 1995 - Zambia Sugar Company privatised and Tate & Lyle becomes the major shareholder Illovo Sugar is listed on Chipata with a 50.9% stake, whilst Commonwealth Development Corporation (CDC) takes a 31% the Johannesburg Stock Zambia stake and the Zambia Privatisation Trust Fund retains the balance. Exchange (JSE). Mumbwa Luangwa Mongu Itezhi - Tezhi 1996 - Successfully listed on the Lusaka Stock Exchange as Zambia Sugar Plc. Zambians Lusaka Illovo Group were finally able to buy shares in the Company. ZAMBIA SUGAR Operations PLC - A TRADITION Mazabuka Chirundu 2001 - Illovo Sugar Limited acquires the 50.9% Tate & Lyle shares, and as required by law, OF LANDMARK makes a mandatory offer to minority shareholders and thereby increases its shareholding to Choma ACHIEVEMENTS IN Livingstone 89.71%. Through continuous improvement and investment, Illovo raised sugar production from ZAMBIA Zambia below 190 000 tons at the time of acquisition to around 240 000 tons prior to expansion in 2006. Malawi • First sugar growing and processing Mozambique 2007 - The Nakambala Expansion Project launched. The agriculture and milling expansion company HEAD OFFICE Mazabuka - agricultural, Tanzania was completed on schedule in April 2009 and was commissioned on 9 December 2009, as • First to employ diffuser technology sugar manufacturing, the largest single investment made in the Zambian agricultural industry to that date. The packing and distribution South Africa expansion effectively doubled the cane crushing capacity of the factory, to process the increased • First to refine sugar operations SALES DEPOTS Swaziland cane supply resulting from an expanded sugar cane growing area. On the agricultural side, the • First to generate electricity using biomass expansion entailed the construction of a network of dams, canals, pipelines, pump stations, (Bagasse), with a total capacity of 40 roads and power infrastructure to service the new areas of sugarcane development, which have Megawatts of power all been planted under centre pivot irrigation systems.
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