TSB Sugar, a wholly owned unit of investment group Remgro, will be the majority shareholder in a group that plans to spend $740 million (R6.5 billion) on new sugar fields and a mill in Mozambique.
The mill would be built at Massingir, near the South African border, said Vusi Khoza, TSB’s general manager for corporate communications.
The plan “is to commence seed-cane planting by the middle of 2013”, Khoza said last week. This would depend on the company obtaining a land-use permit and signing an investment agreement with the Mozambican government, he added.
TSB wanted to expand into Mozambique, which was close to its operations in Mpumulanga, the company said last week.
It would join the other South African producers, Illovo Sugar and Tongaat Hulett, in having output outside the country.
Illovo Sugar produced 1.6 million tons of sugar in 2011. Its operations in Malawi, Zambia, Tanzania, Swaziland and Mozambique contributed 93 percent to its operating profit, according to data compiled by Bloomberg.
Tongaat Hulett produced 1.15 million tons of sugar in its fiscal year to March. Operating profit from its subsidiaries in Zimbabwe, Mozambique and Swaziland contributed 54 percent of the total, according to its annual report.
Remgro gained 0.67 percent to R144.66 on Friday.