Africa Sugar Digest, Vol. III, No 5, 31 May 2012

Contents:

• South Africa: Wage agreement reached in the sugar sector
• Mozambique: SINTIA reaches agreement in Maragra Sugar
• Tanzania: Rufiji Sugar Plant announced for next year
• Nigeria: Dangote poised to acquire Savannah Sugar
• Ghana: Komenda factory to be reactivated
• Mali: Illovo Sugar withdraws from Markala project
• Mozambique: Progress in the Mutarara sugar cane project

South Africa: Wage agreement reached in the sugar sector

On 22 May, negotiations in the Sugar Bargaining Council of South Africa, reached an agreement on an 8.5 percent increase across the board on the basic wage/salary, for the period 1 April 2012 – 31 March 2013, covering some 5,500 employees in the bargaining unit.

Terms of reference on reduction of Hours of Work, Labour Brokers and Housing Allowance will be finalised at the first meeting of the Bargaining Council after signing the agreement. The Council comprises employers in the sugar manufacturing and refining operations and three unions representing employees. (With information from FAWU, South Africa.

Mozambique: SINTIA reaches agreement in Maragra Sugar

Negotiations in Maragra Sugar, the Illovo Sugar subsidiary in Mozambique, reached an agreement  granting a new minimum monthly wage that range from a lowest of USD 95.62 for workers in Category A1 in Agriculture (USD 124.73 in the same category in Industry) to a highest of USD 525.93 in Category C2 in both sectors. Food allowances, when workers are displaced due to service, now range from a minimum of USD 2.92/day for breakfast to USD 6/day for lunch as well as dinner. Salaries will be retroactive to 1 April.

Other agreed matters include that workers required to load cane in rainy days, when machines cannot enter the fields, will be entitled to a 5 percent of the A2 rate in agriculture, and there will be limit of one tonne per worker. Cane cutters will not be included in this task. Temporary workers will benefit from funeral assistance similar to permanent workers, providing they have a minimum of three months of service. The so-called Maragra Day will be observed in 2013 and subsequent years. (With information from SINTIA, Mozambique.)

Tanzania: Rufiji Sugar Plant announced  for next year

On 22 May, Rufiji Sugar announced that a factory with a 5,000 tonnes of daily crushing capacity (tdc) will be set up in Coast region on a 12,000-hectare plantation. The project also includes a distillery and cogeneration facilities, and it is reported it will create 10,000 direct jobs. The company said that work has began with the development of cane farms in the area.

The project’s total cost is estimated at USD 120 million (excluding initial working capital) of which an Indian company will provide USD 30.36 million (25.25 percent) as equity, while the remaining USD 89 million (74.75 percent) will be sought from local and/or financial institutions and commercial banks. The project is under the supervision of Mahakaushal Sugar and Power Industries from India.

It was reported that the 12,000 hectares had been recently acquired from the Rufiji Basin Development Authority (RUBADA), and it is located along Lower Rufiji River basin in Utunge Ward, in the Tawi, Utunge and Namwage villages, some 175 kms from Dar-er-Salaam. In Phase Two, the company plans to integrate another 15,000 hectares either directly or through out-grower schemes and small-scale farmers in the area.

Official figures put Tanzania’s sugar consumption at 480,000 tonnes per year, against a domestic production of 320,000 tonnes from the four companies operating: the Tanganyika Plantation Company (TPC), Kilombero, Kagera and Mtibwa. The annual sugar deficit stands at 160,000 tonnes.

Nigeria: Dangote poised to acquire Savannah Sugar

Dangote Sugar Refinery (DSR) aims at acquiring Savannah Sugar Company (SSC) to reduce its dependence on imported sugar and to implement costs savings measures. A 95 percent stake of Savannah is currently owned by Dangote Industries Limited (DIL), which was acquired from the government in 2002 during a privatisation process.

Dangote Sugar Refinery has a dominant position in the sugar sector, and has been focusing on strategies to integrate production and milling businesses, which also respond to the government’s agenda to encourage sugar domestic production.

According to information provided at a Dangote’s shareholders meeting, which approved such strategic acquisition, DSR covers about 70 per cent of domestic market and has the largest sugar refinery in Sub-Sahara Africa, with an installed refining capacity of 1.44 million tonnes per year.

Ghana: Komenda factory to be reactivated

Ghana’s Deputy Trade Minister said negotiations for a new Komenda sugar factory have started, and India’s Ex-Im Bank has also started works on its funding. The new factory with a 1,200 tdc will be located in Central Ghana, and is likely to start operations in the next two years. Initially some 400 factory jobs will be created. In addition, some 2,000 farmers would benefit, and 10,000 others may be indirectly engaged. Studies for the new factory have been delivered to the Indian government. The original Komenda factory was closed down in 1982.

In related news, it was also reported that Ghana has signed a memorandum of understanding with India to see 1,000 workers and sugar cane farmers moving to the area, which will service the factory.

According to the Indian High Commissioner, India is also ready to provide USD 27 million for the establishing of two food-processing plants, sugar and tomatoes, in the Keta municipality of the Volta region in eastern Ghana.

Mali: Illovo Sugar withdraws from Markala project

Illovo Sugar Group has pulled out of Markala Sugar, a 2.6 billion South African rand (USD 310 million) project in Mali, due to funding difficulties and political instability, said on 28 May its managing director, Graham Clark. Markala Sugar is a joint project between the government and Illovo, and was expected to produce 1.5 million tonnes of cane per year. It was reported that Illovo lost interest in the project after the government failed to finalise funding and developed infrastructure, difficulties that were compounded by the political situation following the military coup of 22 March.

Mozambique: Progress in the Mutarara sugar cane project

In 2011, the Mozambican government approved the Mutarara sugar project, which at the moment is trying to secure access to water resources. The new project is located in the Mutarara district, Tete Province in the centre-west region of the country, and will cover 32,000 hectares. Access to the Zambezi and Chira rivers would guarantee water resources, according to district authorities. At the moment, there is a technical team working on soil evaluation, and it is expected that the project’s work will start later this year. The project falls within the government plans to increase sugar production by 30 percent, aiming at achieving 550,000 tonnes of sugar per year. (With information from SINTIA, Mozambique.)

                                                                                                                                                                                                   

Africa Sugar Digest is produced thanks to the IUF Global Sugar project in East and Southern Africa. It appears as news becomes available. Contributions are welcome. The IUF African sugar project is supported by the Social Justice Fund of the Canadian Auto Workers (SJF-CAW), with contribution from the Canadian International Development Agency (CIDA) through the Labour International Development Program of the Canadian Labour Congress (LIDP-CLC).
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Africa Sugar Digest, Vol III, No 5, May 2012 – click to download –
 

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