Harare - Import protection on sugar introduced by the Zimbabwean government saw the Zimbabwe-based operation of Tongaat Hulett [JSE:TON] record more sales than the previous comparative half-year.
The Zimbabwe sugar operations’ operating profit for the half-year amounted to R344m compared to the R232m in the same period last year.
Commenting on performance for the six months to September 30 2014, Tongaat CEO Peter Staude said the company had better input protection in Zimbabwe, where sugar can only be imported with an import permit and a reference price adjustment in South Africa.
“This period has seen higher sales volumes, mainly due to improved local market protection (tariffs and import licences) implemented in April 2014,” said Staude.
He added that the currency exchange rate impacted positively on the conversion of US dollar profits into rands on consolidation.
Going forward, Staude expects continued government support on local sugar operations.
“In Zimbabwe there is an increasing understanding, up to senior government levels, of the importance to better protect local markets (especially to secure rural jobs) against imports from other surplus sugar-producing countries,” said Staude, adding that better import protection would however lead to lower exports.
- Fin24