Tongaat Hulett in Zimbabwe operation.photo Supplied

Tawanda Karombo

JSE-listed Tongaat Hulett will invest $2 million (R21m) to help private farmers in Zimbabwe boost production and lift output at its mills in the country to about 610 000 tons a year.

The sugar giant runs Triangle Sugar Corporation and Zimbabwe Stock Exchange-listed Hippo Valley but has recently battled uncertainty in its land leases after illegal settlers invaded some areas.

The units are the biggest producers of sugar in the country, with Industry and Commerce Minister Mike Bimha saying yesterday that the government had liberalised the industry, which is now in the hands of private sector players, including farmers.

Sydney Mutsambiwa, the chief executive of Hippo Valley, told a conference of Southern African Development Community’s (SADC) sugar producers in Victoria Falls that Tongaat had invested significantly into boosting the capacity of private farmers to supply cane to its mills. This would help the company raise its sugar output in the country.

“Tongaat plans to increase production by increasing hectarage so we can produce about 610 000 tons a year. The sugar industry needs support to bring back production to capacity and assist farmers.”

He said Tongaat Hulett had already invested $6.8m and was ready to “put $2m” into propping up its capacity. Ramping up production is key in fighting imports, which are hurting local producers’ market share.

SADC producers complained yesterday that imported sugar was too cheap. They have urged their governments to craft protectionist policies to shield the local industry.

In pursuit of such outcomes, Zimbabwe has imposed tariffs on imported sugar.

Bimha said SADC sugar producers were “worried about (the) drop in the price of sugar on the world market”. This resulted in an increase of “poorly processed sugar, cheaply priced for dumping purposes” which was flooding regional markets.

“We note with concern the recent shockwaves in the industry as a result of cheap sugar imports which displaced some 100 000 tons of local sugar from the market. Government responded by taking appropriate protective measures.”

Zimbabwe has imposed a $100 duty on each ton of imported sugar in a bid to help local producers make a profit in the market.