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Tongaat boosts Zim local farmers

Harare - Tongaat sugar projects have remained a boon for Zimbabwean local farmers, despite the threat of indigenisation by the empowerment ministry.

In a statement released with Tongaat’s interim results to September, the company noted that in Zimbabwe about 670 private black farmers farmed 11 100 hectares and employed more than 5 550 people.

Small-scale farmers are expected to supply Tongaat with 772 000 tonnes of cane this year, which will generate US$50m in revenue for them, way above the $10m some companies have been donating to the Community Share Ownership Trusts championed by the empowerment ministry.

Tongaat has also implemented a private farmer rehabilitation programme to increase the area farmed by small-scale farmers to 15 880 hectares, which will almost double their crop yields and increase their supply of sugarcane.

Tongaat estimates that all of these initiatives could result in local farmers earning $150m in gross revenue per annum and employing over 12 000 people.

Meanwhile the Zimbabwean operations of Tongaat (Hippo Valley and Triangle) generated operating profit of R437m compared to R364m last year. Margin pressure was experienced in the nexus of selling price movements and input cost increases, following the last 18% wage increase.

Last month the company was issued with an ultimatum to come up with an acceptable indigenisation plan by the National Indigenisation and Economic Empowerment Board (NIEEB).

In a letter, the NIEEB said: “We would like to advice that the ministry’s patience is running thin and that should we not receive a proper compliant plan within the prescribed period, ministry and government would take it that the shareholders of Triangle are not interested in continuing to do business in the country.

"This may have serious consequences for the company.”

Hippo CEO Sydney Mutsambiwa has previously said the company’s $30m Successful Rural Sugarcane Farming Community project (Susco) is part of empowerment compliance.

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