Illovo is a leading sugar producer and a significant manufacturer of downstream products. The group is Africa’s biggest sugar producer and has extensive agricultural and manufacturing operations in six African countries. The group produces raw and refined sugar for local, regional, European Union (EU), United States of America (USA) and world markets from sugar cane supplied by its own agricultural operations and independent outgrowers who supply cane to Illovo’s factories. High-value products manufactured downstream of the sugar production process are sold internationally into niche markets. Installed electricity generating capacity, fuelled by renewable resources, provides around 89% of the group’s energy requirements. Illovo is listed on the JSE Limited and is a subsidiary of Associated British Foods plc which holds 51.5% of the issued share capital.
Excellent climatic and soil conditions in the group’s countries of operation, accompanied by irrigation from secure water sources, are ideal for the cultivation of high-yielding and good quality sugar cane, amounting to 6.2 million tons in 2011/12. Combined with cane supplied by independent outgrowers in all six countries of operation, total milling capacity of the group amounts to more than two million tons of sugar annually.
The group is a major supplier of sugar to African consumer and industrial markets, particularly in its own countries of operation, and has significant and increasing access to preferential markets in the EU and the USA. Operations outside South Africa also have access to the South African Customs Union market in terms of the Southern African Development Community Sugar Protocol on Trade, whilst pre-packed and bagged sugar is supplied into other regional markets within Africa. The group, through the South African sugar industry exports sugar into the world free market. Syrup and speciality sugars are produced in South Africa and Zambia mainly for domestic consumption, whilst speciality sugars made in Malawi and Zambia are produced for preferential markets in the EU and in the case of Malawi also in the USA.
The majority of downstream production is sold internationally into high-value, niche markets. Furfural and its derivatives are produced at the Sezela mill complex on the south coast of KwaZulu-Natal whilst high quality ethyl alcohol, from which various grades of alcohol are made, is produced at the Merebank plant in Durban and at the Glendale distillery on the north coast. Lactulose is also manufactured at Merebank.
Illovo’s objective is to become self-sufficient in its own power requirements from bagasse and biomass, and where feasible, to export power into the national grids of existing and new countries of operation. In addition to the production of potable and denatured alcohol from molasses in South Africa, opportunities to expand Illovo’s involvement in this area of operation are being explored across the group.
Illovo operates in predominantly rural environments with limited infrastructure and significant development needs. Being welcomed in the locations in which it operates requires extending the group’s support for its own employees beyond normal boundaries and into nearby communities. In addition to providing accommodation, health care, educational assistance and basic services to employees, the group also provides medical care to communities where no other facilities exist, assists in education delivery, provides municipal and civic services and access to water and sanitation, and participates in community outreach programmes. Social investment spend in 2011/12 amounted to R208 million. Considerable training and other support is provided to local indigenous growers in order to promote sustainable agriculture and economic development activities. Total cane supplies from these growers, including community-based co-operative schemes, amounts to two million tons annually, generating revenue of approximately R1 247 million in these communities in 2011/12.