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• Illovo Group – Strategic Intent

  
  

  • Leading sugar and downstream products operation / increasing global player / world class
  • Low cost producer
  • Optimise return on every stick of cane by adding value to its core commodity products – fibre, sugar and molasses / focus on core business and develops material niche operations
  • Market leader
  • Increase profits in real terms on a sustainable basis / maximise return on capital
  • Moral, performance focussed
  • Welcomed in communities in which it operates
  • Cognisant of the rural locations of the group’s operations and the impact that it has on job creation and poverty alleviation in such areas

• Vision

  The vision of the group is to be a world class, low-cost and highly efficient organisation, operating on the African continent, adding value to its core products of fibre, sugar and molasses. We seek to enhance shareholder wealth and optimise growth, achieving a sustainable, balance and integrated economic, social and environmental performance, whilst taking cognisance of the interests of our stakeholders.

• Ownership of Operations (March 2012)

  
  

  • 100% of Illovo Sugar (South Africa) Limited
    o 3 sugar cane estates
    o 4 sugar factories
    o 1 refinery
    o 30% investment in a further sugar factory and refinery
    o 3 wholly-owned downstream plants / 50% share in ethanol distillery
    o Corporate centre of the group
    o 2 052 permanent employees / 1 841 seasonal agricultural workers

   

  • 90% of Maragra Açúcar SA in Mozambique
    o Sugar cane estates
    o 1 sugar factory
    o 1 021 permanent employees / 3 605 seasonal agricultural workers

   

  • 82% of Zambia Sugar in Zambia
    o Sugar cane estates
    o 1 sugar factory
    o 1 refinery
    o Domestic sugar fortified with Vitamin A
    o 1 848 permanent employees / 3 530 seasonal agricultural workers

   

  • 76% of Illovo Sugar (Malawi) Limited
    o Sugar cane estates
    o 2 sugar factories
    o 2 refineries
    o Interests in ethyl alcohol production
    o 5 400 permanent employees / 4 529 seasonal agricultural workers

   

  • 60% of Ubombo Sugar Limited in Swaziland
    o Sugar cane estates
    o 1 sugar factory
    o 1 refinery
    o 1 256 permanent employees / 1 394 seasonal agricultural workers

   

  • 55% of Kilombero Sugar Company in Tanzania
    o Sugar cane estates
    o 2 sugar factories
    o 1 refinery
    o 879 permanent employees / 2 156 seasonal agricultural workers

• Major Group Strengths

  
  

  • Core focus on the production of low-cost, high-quality sugar and downstream products
  • African sugar producer with African expertise in sugar cane agriculture, sugar manufacturing and the production of high-value downstream products
  • Increasing focus on electricity generation from bio-renewable sources for own needs and for export into national grids, and bio-ethanol production for both potable use and fuel blending
  • Wide geographic and climatic spread of core interests with good access to secure water supplies for irrigation
  • Sugar markets:
    • 91% of sugar production by volume is sold into domestic or premium-priced export markets;
    • 8% of production is sold into regional markets where premiums to the world price are earned;
    • Balance sold on the world free market.
  • Good people

• Production statistics 2012

  
  

  • Sugar cane (‘000 tons):
    
    

    Country	2012	2011
    South Africa	242	267
    Malawi	2 065	2 133
    Zambia	1 887	1 974
    Swaziland	813	724
    Tanzania	660	708
    Mozambique	91	69
    Total	6 202	6 260

  • Sugar (‘000 tons)
    
    

    Country	2012	2011
    South Africa *	441	578
    Malawi *	283	282
    Zambia *	374	385
    Swaziland *	224	198
    Tanzania *	113	127
    Mozambique *	91	69
    Total	1 526	1 639

    
    * - Sugar cane supplied by the group’s own agricultural operations and private growers

  • Downstream production (see Marketing products/Downstream products)
    
    

    Downstream production (South Africa only)	2012
    Furfural (tons)	19 220
    Furfuryl alcohol (tons)	10 960
    Diacetyl (kgs)	95 000
    Lactulose (tons)	7 8000
    Ethanol (kls)	55 246
    Syrup (tons)	5 873
    Agriguard (kls)	586

• Key Features - 2012

  
  

  	2012	Compared to 2011
  Cane production	6.2 million tons	Down 1%
  Sugar production	1.5 million tons	Down 7%
  Furfural production	19 220 tons	Up 21%
  Ethanol production	55 200 kilolitres	Down 0.5%
  Domestic sugar market sales	973 000 tons	Down 7%
  Export sugar market sales	556 000 tons	Down 1%
  Revenue	R9 173 million	Up 13%
  Operating profit	R1 349 million	Up 31%
  Operating margin	14.7%	Up 16%
  Headline earnings per share	132.6 cents	Up 18%
  Total distribution	66.0 cents per share	Up 18%
  Cash operating profit	R1 348 million	Up 19%
  Return on net assets	15.9%	Up 15%