SOUTH AFRICA – South African sugar producer Tongaat Hulett, has appointed Graham Clark, the former MD of Illovo Sugar as an independent non-executive director of the company with effect from 21 April 2022.
Clark, has a wealth of business experience in multiple jurisdictions including Malawi, Swaziland, Australia, Eswatini, South Africa, Zambia, Nigeria, Mauritius and Fiji, among others.
He has in-depth expertise in the sugar industry, having worked at Lonrho Sugar Corporation as Group Chief Financial Officer, served as Group Managing Director of Illovo Sugar Limited, Group Chief Executive Officer (CEO) of Dangote Sugar Refinery PLC, Group CEO of Fiji Sugar Corporation Limited and Chairman of London Sugar Group.
“The Board would like to welcome Graham and looks forward to his contribution to the Tongaat Hulett group,” stated the company.
He is a fellow of the Institute of Chartered Accountants in Australia and New Zealand.
Clark, joins the embattled sugar producer at a time it is embarking on a turnaround strategy to regain its footing following piling debts.
Tongaat is also in the process of preparing its results for the year ending 31 March 2022, but has hinted it earnings per share for the period is expected to be at least 120% below the earnings per share for the prior corresponding period.
According to the company’s trading update, it navigated difficult trading conditions in its 2022 financial year, as it recovered from the pandemic and progressed with its turnaround strategy.
However, as a prominent player in the area, the unrest in July 2021 in KwaZulu-Natal had a much more severe and prolonged impact on production, while the forced stoppages aggravated the neglect through lack of maintenance of equipment that had taken place over many years, which became more evident as the season progressed.
These challenges culminated in lower production, higher costs, and higher capital expenditure in the South African sugar operations.
A 9% reduction in Tongaat Hulett’s overall sugar production, together with a challenging commercial environment faced by the South African sugar operation during the last quarter of the financial year ending 31 March 2022, put considerable pressure on revenue generation.
The impact of lower sugar production on profits is amplified given the high proportion of fixed costs applicable to sugar production, and profitability was further impacted by higher costs for commodities, maintenance, and labour.
The South African sugar operations in particular are expected to report a significant loss due to sugar production decline to 463 000 tons courtesy of the civil unrest.
While local market sugar sales continued to grow year-on-year in Zimbabwe, export proceeds are deemed to decline due to lower sugar production and import restrictions into the Kenyan market.
Meanwhile, Mozambique sugar operations continued to deliver solid results with higher revenue arising from favourable commercial conditions including strong local demand, higher refined sugar sales and improved export realisations.