Speaking to businessdigest after the company’s AGM on Wednesday, Mtsambiwa said there would be no shortage of sugar until the group’s financial year ending March 31 2011 after production increased following the rehabilitation of one of the company’s eight mills by Tongaat Hullet.
Of the eight mills that Tongaat Hullet operated in southern Africa, four are in South Africa, two in Mozambique and two in Zimbabwe.
“On a normal year the country needs between 230 000-250 000 tonnes of sugar annually. But production at Hippo and Triangle is expected to be between 330 000 tonnes and 350 000 tonnes in the current financial period compared to 258 000 tonnes last year,” Mtsambiwa said.
“When we talk of sugar, we talk of the industry as a whole not just Hippo Valley or Triangle. We currently have sufficient (sugar) to meet domestic and export needs” he said
Hippo Valley’s nature of business includes growing and milling of sugar cane.
Mtsambiwa told businessdigest that a total of US$19,2 million was invested in the mill and its return was beginning to be visible.
Asked about synergies between Hippo and Triangle, Mtsambiwa said it was “still work in progress which takes some time”.
He said the company had combined services, for example on the health side of things.
“The factories run independently of each other and it is mainly in the areas of services. In 2-3 years, we would have got to the point where we have restructured to maximum effect,” he said.
Mtsambiwa said 9,2 million euros had been spent on rehabilitating 1 200 hactres of land and canals in the Chipiwa and Mpapa regions.
Mtsambiwa described its 15 months to March 2010 as “a typical year” and this ratio was not representative of a steady state environment.
“We were moving out of a period where we were receiving nothing for domestic sugar sales. Going forward, unless we are in an expansion mode, this scenario is unlikely,” he said.
The company started as a citrus estate, and canned Hippo Valley fruit was exported across southern Africa until the 1970s, when the citrus estate was replanted under sugarcane and a mill constructed.
The sugar plantations cover 124 square kilometres, and the company employs around 8 000 people.
Tongaat Hulett Ltd is the largest shareholder via its wholly-owned subsidiary Triangle Sugar Corporation Ltd, which has a 50, 35% stake in Hippo Valley Estates.