Tinashe Makichi Business Reporter
Hippo Valley Estates’ investment in plant upgrade has resulted in a $26 million cost reduction as the company steps up efforts to improve sugar output beyond 300 000 tonnesby boosting output per hectare. Hippo Valley has historically been a low-cost sugar producer, whose advantage was based on irrigation facilities implying insulation against drought, climatic benefits with a 12-month cycle crop generating sufficient biomass and adequate heat for sugar cane plantation.
“After significant investment in plant upgrades, success has been achieved in the drive to reduce production costs. Substantial cost reductions amounting to $26,2 million were realised during the past season. We expect the plant upgrade to significantly improve total sugar output and yield per hectare beyond 300 000t and 110t/ha, respectively,” said the November 2014 sugar report released by the Imara Investing in Africa.
Hippo Valley grows sugar cane on 12 300ha of arable land and has a 50 percent stake in the 442 hectares Mkwasine Sugar Estates involved the growing of sugar cane and other agricultural operations.
Total cane production for Mkwasine Sugar normally totals in the region of 1,8 million tonnes per annum at an average yield of 110t per hectare. Hippo Valley Estates also has a 33,3 percent stake in Sugar Industries Limited, the sole packer and distributor of refined sugar in Botswana and a 49 percent stake in NCP Distillers engaged in the conversion of molasses into alcohol.
The distillery in Botswana uses about 17 000 tonnes of the 70 000 tonnes of molasses produced annually by the mill.
Other investments include a 50 percent stake in Zimbabwe Sugar Sales Ltd, a sugar broking entity and Chiredzi Township Ltd that develops and sells township stands.
The drive to restore sugar production to the installed milling capacity of 300 000 tonnes at Hippo Valley is still ongoing.
The slowdown on account of water availability experienced in first year of 2013 was reversed after re-introduction of irrigation.
The report said cane expansion and root replanting for both private growers and company estates has commenced and sugar production is expected to progressively increase over the next four years.
Completion of the Tokwe Mukosi Dam (expected in early 2015) is going to increase production of sugar cane, raw and refined sugar and maximize beneficiation to by-products.
Hippo Valley Estates continues to provide inputs and extension services to third party cane growers to enhance cane production and deliveries to the mill.
The report said current Zimbabwe sugar industry initiatives are set to increase the number of private farmers to 1 022 supplying more than 1,8 million tonnes of cane at yields in excess of 100 tonnes per hectare from 18 880 farmed hectares.
Increased deliveries are likely to be coupled with improved quality due to availability and early application of all necessary chemicals.
The report estimated sugar production to grow to 280 000 million tonnes for the first year of 2015.