Report Coverage
This report focuses on the manufacture of sugar in South Africa, with information on the state and size of the sector, major players and their brands and performance, and factors influencing the sector. There are profiles of nine companies including notable players such as Tongaat Hulett, Illovo and RCL Foods and mills such as Umfolozi
Introduction
This report focuses on the manufacture of sugar in South Africa, which is a major sugar producer on the continent. The industry, which generates an estimated revenue of R14bn per annum, contributes 0.6% towards South Africa’s GDP. The country’s crippled economy, cheap imports, changing consumption patterns, low international sugar prices, and the tax on sugar-sweetened beverages are some of the factors that have caused the industry to decline over the past few years. According to the Department of Trade, Industry and Competition (DTIC), the local sugar industry needs to consider diversifying its products if it is to remain viable and create jobs. The government has pledged to work with sugarcane growers and millers “to develop sustainable solutions for the industry” and in February 2020, president Cyril Ramaphosa said that a Sugar Master Plan would be finalised to save jobs in the industry.
Strengths
• Significant contributor to economic growth and development.
• South Africa is a producer of high-quality sugar.
Weaknesses
• Negative export conditions due to high tariffs and lack of subsidies.
• Reliance on favourable weather conditions.
• Skills shortages.
• The decline in the area under cane farmed as more farmers plant other crops.
• The global sugar price is affected by subsidy-induced overproduction in some major sugar-producing countries.
Opportunities
• Expansion into Africa.
• Sugar Master Plan.
• The generation of renewable electricity.
• The production of bioethanol.
Threats
• Competition from sweeteners.
• Global oversupply of sugar and low sugar prices.
• Increasing imports.
• Rising input costs.
Outlook
South Africa’s sugar industry is struggling due to growing tariff-free imports mainly from Eswatini, higher input costs, and the effects of the sugar tax, which has had a major impact on local production and market demand. Decreased milling is causing severe pressure on milling companies and while the closure of some mills could increase the through-put of the remaining mills, this means additional transport costs. It can be expected that many hectares will be lost in regions where mills close permanently, should they do so. In August 2019, the Bureau for Food and Agricultural Policy said that while the International Trade Administration Commission of South Africa’s increased allowance in the import tariff from $566/t to $680/t helped slow the industry’s decline, the industry is still “projected to contract for the next five years until a more sustainable equilibrium is achieved with less surplus sugar”. KwaZulu-Natal premier Sihle Zikalala said the sugar industry is central to the economic development of the province and that the Sugar Master Plan would ensure the industry is revitalised, save and create more jobs, and seek to protect the industry against cheap imports and dumping. “Our sugar industry will enjoy significant rejuvenation with the imminent implementation of a new regulatory framework around biofuels generally, and ethanol in particular.”
The Sugar Industry in South Africa
2020
Full Report
R 1 900.00(ZAR) estimated $107.74 (USD)*
Industry Landscape
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Historical Reports
The Sugar Industry in South Africa 2018-01-19
R 1 900.00(ZAR) estimated $107.74 (USD)*
View Report Add to CartThe Sugar Industry in South Africa 2015-11-09
R 1 900.00(ZAR) estimated $107.74 (USD)*
View Report Add to CartTable of Contents
[ Close ]| PAGE | ||
|---|---|---|
| 1. | INTRODUCTION | 1 |
| 2. | DESCRIPTION OF THE INDUSTRY | 1 |
| 2.1. | Industry Value Chain | 4 |
| 2.2. | Geographic Position | 5 |
| 3. | SIZE OF THE INDUSTRY | 7 |
| 4. | STATE OF THE INDUSTRY | 7 |
| 4.1. | Local | 7 |
| 4.1.1. | Corporate Actions | 15 |
| 4.1.2. | Regulations | 15 |
| 4.1.3. | Enterprise Development and Socio-Economic Development | 17 |
| 4.2. | Continental | 20 |
| 4.3. | International | 22 |
| 5. | INFLUENCING FACTORS | 23 |
| 5.1. | Economic Environment and Input Costs | 23 |
| 5.2. | Coronavirus | 24 |
| 5.3. | Government Initiatives | 25 |
| 5.4. | Land Reform | 25 |
| 5.5. | Health Concerns | 25 |
| 5.6. | Technology, Research and Development (R&D) and Innovation | 26 |
| 5.7. | Labour | 27 |
| 5.8. | Cyclicality | 28 |
| 5.9. | Environmental Concerns | 28 |
| 6. | COMPETITION | 30 |
| 6.1. | Barriers to Entry | 31 |
| 7. | SWOT ANALYSIS | 31 |
| 8. | OUTLOOK | 32 |
| 9. | INDUSTRY ASSOCIATIONS | 32 |
| 10. | REFERENCES | 33 |
| 10.1. | Publications | 33 |
| 10.2. | Websites | 33 |
| APPENDIX 1 | 34 | |
| Summary of Notable players | 34 | |
| COMPANY PROFILES | 36 | |
| A J PRODUCTS (NATAL) CC | 36 | |
| A J PRODUCTS (WESTERN CAPE) CC | 38 | |
| CROOKES BROTHERS LTD | 40 | |
| GLEDHOW SUGAR COMPANY (PTY) LTD | 44 | |
| ILLOVO SUGAR AFRICA (PTY) LTD | 46 | |
| RCL FOODS SUGAR AND MILLING (PTY) LTD | 48 | |
| TONGAAT HULETT LTD | 52 | |
| U C L COMPANY (PTY) LTD | 57 | |
| UMFOLOZI SUGAR MILL (PTY) LTD | 60 |
