News - 1st Quarter 2012

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• MALAWI ‘HITS THE SWEET SPOT’!

  
  

  AT the management conference held in South Africa in September 2011, the Malawi management team walked away with the group’s top honour of recognition – ‘Best Country Performance Award’ – for its 41% contribution to operating profits in 2010/11 against a difficult background of unseasonable weather, difficult operating circumstances in the factories and a depressed local market. 
  
  However, as noted by Graham Clark in presenting the award to Regional Director Ian Parrott, “the team simply stayed true to the basics of the business, never giving up on their efforts to extract the best possible value, despite the many and varied challenging circumstances”.
  
  In all of the awards presented, the underlying theme of the 2010/11 season was that of difficult operating conditions but with ongoing examples of best practice across all of the territories. The other awards presented were:

  
  

  Best factory performance	Illovo SA Eston	Human resource award	Illovo SA
  Best agricultural performance	Zambia Nakambala	MD’s award (Special commendation)	The Mali team
  Best marketing achievement	Zambia	Corporate office award	Group safety
  Financial management award	Zambia Nakambala	Safety award	Swaziland Ubombo

  
  

  

  
  

  IAN PARROTT, regional director central region, receives the Best Country Performance Award from Stephanie MacLeod and Graham Clark.

   

• 2011 – THE TURNAROUND YEAR FOR NAKAMBALA

  
  Reflections of a Country Head, Stan Munsamy
  
  

  THERE was great excitement in March 2007 when the Nakambala expansion was announced - it was to be the biggest project of its type ever undertaken by the group. Spread over two years, and commencing in the 2008/09 season, the area under cane was to increase from 17 462 hectares to 26 814 hectares by 2010, whilst the factory expansion was to take the milling capacity from around 400 tons cane per hour to 640 tons cane per hour. Daunting to say the least!
  
  The agricultural expansion proceeded smoothly and the new area was planted as per the plan. The factory expansion was challenging, especially the electricity generation and the distribution of power to the irrigation network. For a while, nothing seemed to go right! But in 2009 the operations soon began to right themselves and, although under our operational objectives, the factory achieved a crush rate of 583 tons cane per hour with a factory down time (LTA) of 12.4%.
  
  With the second phase of the expansion project completed in the 2009/10 season, the factory began to exceed its design crush rate and posted a record 641 tons of cane per hour and an LTA of 7.99% for the season. Clear signs that things were ‘on the up’ but, disappointingly, due to challenges on the factory floor we were unable to process all of the crop and there was “lodged cane everywhere”, and it just kept growing - with some fields yielding in excess of 200 tons of cane per hectare. I remember pleading with the cane “please stop growing”!
  
  Many modifications and a great deal of re-engineering took place in the 2010/11 off-crop and, with some trepidation at the outset, we pressed the button to start the season officially on 28 March 2011. With ideal weather for harvesting, the factory raced ahead of the crush plan, prompting Graham Clark on one of his visits to Nakambala to mention that we had “shot the lights out”.
  
  At the end of week 9, the Nakambala factory was more than 145 000 tons of cane ahead of the crush plan and it took us exactly 10 weeks to exceed the “1 million tons cane crushed” mark. Other cane delivery and production records were set in the first 10 weeks of the season – these included:

  
  

  • Tons cane delivered and crushed per day – 17 691 tons
  • Tons cane delivered by the estate (MCP) per day – 12 095 tons
  • Day average crush rate – 755 tons cane per hour
  • Tons cane delivered and crushed per week – 111 956 tons
  • Week average crush rate – 712 tons cane hour

  Now I walk around the fields and plead to the cane “please grow, I need more cane”!
  
  Although a reduction in cane yields and significantly lower sucrose levels have since impacted negatively on anticipated sugar production for the full year, we can take comfort from a number of key positive developments:

  
  

  • an exceptionally good milling performance achieved by the Nakambala factory in 2011/12;
  • record sugar sales across all markets last season with continued strong demand for our sugar currently;
  • a step change improvement in our logistical operations to move sugar between mill and market, resulting in the Zambia Sugar/Barloworld team receiving a Gold Award for Integrated Logistics Excellence at a South African-based business competition; and
  • a healthy improvement in Nakambala’s NOSA safety score from 77% to 82%.

  Not to mention that Zambia Sugar won the “Best Made in Zambia” award at the Ndola International Trade Fair, with five other awards won at the Lusaka Agricultural Show. And to scoop it all, the company’s own soccer team, Nakambala Leopards, won promotion to the Zambian premier division and remained in the top 5 for most of the season!

  THE victorious Zambia Sugar team with their prizes from the Lusaka Agricultural and Commercial Show. From left, standing, are Evaristo Mubanga, Bonaventure Chisanga, Gilbert Kaimana, Stephen Noole, Sam Mulambia, Matongo Matamwandi, Ackson Tembo, Kennedy Chomba; seated: Hazel Nyemba, Chisofu Mbula, Pauline Inambao and Sylvia Lumamba.

  A VIEW of the Nakambala factory in the background where a number of production and cane delivery records were set in the first 10 weeks of the season.

  ZAMBIA’S country operations director Stan Munsamy (left) makes a presentation to Nakambala caneyard supervisor Bornface Chali.

  
  

• ILLOVO SA FIGHTS BACK AGAINST THE DROUGHT

  
  

  OUT of the disappointment and significant losses resulting from the devastating two-year drought in South Africa, a plan to rebuild cane supplies across all four Illovo milling regions has emerged which, if successful, will increase the amount of land under cane by around 9 000 hectares and provide additional cane throughput of approximately 450 000 tons.
  
  These details and more were revealed by the South African management team at a management conference site visit to Sezela’s agricultural cane supply regions, where the larger group was able to witness first-hand the unfolding strategies aimed at filling up Illovo’s factories with cane and thereby making maximum use of existing installed milling capacity.
  
  At the top of the achievement list is the significant contribution that KwaZulu-Natal’s government continues to make towards the ongoing viability of the small-scale cane growing sector in the Sezela and Umzimkulu regions by providing funding for the rehabilitation of drought-affected farms, in addition to supporting the establishment of new areas under cane. Key details to date are:
  
  Through the Department of Rural Development and Land Reform, total government commitment directed through Illovo amounts to R169 million. This includes:

  
  

  • A R109 million/three-year cane redevelopment programme to re-establish the small-scale cane growing sector in the Umzimkulu and Sezela regions. A unique mentorship arrangement with local large-scale growers, further supported by Illovo, will allow for in-field training and support of these farmers and ensure their sustainability;
  • A further R30 million has been allocated to support the department’s redistribution and restitution process through which claimant communities are being encouraged to ensure the continued sustainability of their cane holdings in order to support rural employment and economic growth. Illovo is playing a key role in this process;
  • R30 million has been secured from the Government for the farmers who have purchased Illovo farms, extending over 9 600 hectares, under the company’s medium-scale farm development programme which commenced in 1996. This initiative has proved highly successful with total pre-drought cane production on these farms remaining close to the output levels at the time of their purchase, and with around 90% of buyers still in business. Unfortunately, the drought has impacted severely on their current operations and Illovo is using its extensive farming capability to re-establish some of these farms on behalf of the owners – some 2 500 hectares will be funded and replanted by Illovo over the next five seasons and returned to the grower, who will fund the cost through the improved farm performance. So far, R24 million of the grant funding has already been received and expended;
  • Underpinning all these initiatives is the Sugar Industry’s Umthombo financial savings scheme where growers are able to fund their ongoing ratoon management, thereby ensuring the sustainability of their cane crops;
  • Illovo has also initiated a fertiliser assistance project and a ‘free seed’ programme for replanting of drought-affected farms.

   

  THULAS NGIDI, a prominent and successful cane farmer in the Sezela cane growing region, underlines to a management conference group the challenges of managing four farms under severe drought conditions.

   

• SENIOR APPOINTMENTS ACROSS THE GROUP

  
  

  

• GORDON KNOX RETIRES

  
  

  

  
  

  GORDON KNOX has retired from Head Office as corporate affairs director and group company secretary. He joined the company in 1984 and has been group company secretary for 25 years.

• HOSPITAL MOVES FROM KILOMBERO TO KIDATU

  
  

  KILOMBERO SUGAR has operated the Kilombero Hospital at Msolwa (K1) factory since it opened in 1962 with 40 beds. The closest district hospitals are located about 70 kms from the factory site for both Kilombero and Kilosa Districts respectively.
  
  It grew to 70 beds in 1977 following development in the Kilombero valley, with new businesses having a positive impact in terms of poverty alleviation and a subsequent growth in population. Currently, the hospital has 110 beds in four wards, with an average of 1 000 private patients’ visits per month constituting 90% of treated patients per annum. Ten percent (10%) of treated patients are Company employees and their dependents.
  
  Following consultations with the Kilombero District Council, it has been agreed - in the best interests of all stakeholders - to relocate the company hospital to a suitable site closer to the greater Kidatu community and that, once established, the new health facility will be owned and run by the Kilombero district council, giving 90% of the patients currently utilising the hospital easier access.
  
  A committee was formed, with three government representatives appointed by the district council and three by Kilombero Sugar to relocate the hospital and to strengthen and allow a wider partnership between the Government and the private sector as required by the National Health Policy, thereby increasing the availability of quality and affordable health services to the general population.
  
  Kilombero has provided considerable support, including allocation of funds to the project. Phase one started in June 2010 and has been completed within the planned time; it includes the maternity ward, laboratory, operating theatre, mortuary, X-ray room, roadwork, water system and electrification. Phase two of the project started in June 2011, includes the female ward, childrens’ ward and obstetrics and is expected to be finished in November 2011. Phase three will include the male ward and the female surgical ward.

  THE completed maternity ward, with nurses from the former clinic outside. The next building houses the laboratory and the theatre.

  THE new hospital has attracted many visitors, including HR manager Chris van den Berg, accompanied by Dr Nicholas Mazunguni, Romanus Mwapinga and Grace Mwateba from management, as he explains some aspects to Kilombero Sugar union leaders (TPAWU) who were all positive about the move to Kidatu. From left are W Mbeyela (secretary), I Magassa (Union chairman), Grace Mwateba (HR admin manager), Dr Nicholas Mazunguni and Juma Kingazi (Union representative from Kilombero Hospital).

  THE maternity ward corridor.

  THE other side of the maternity ward and laboratory and theatre.

   

• MARAGRA’S NEW CLINIC BRINGS BETTER SERVICES

  
  

  

  
  

  MARAGRA now has a bigger brand-new clinic (as shown) with the capacity to offer better services for its employees’ well-being. It offers every type of out-of-hospital treatment, except those supplied at the nearby state health facilities. The construction of a separate full-time HIV testing and counselling office is almost complete. 

• DIRECTORS GO WALKABOUT AT NCHALO AND DWANGWA

  
  

  DIRECTORS of Illovo Sugar (Malawi) visited Nchalo Sugar Estate from 28-29 June 2011. They were inducted on safety by the factory safety officer, John Malekano, followed by presentations by GM Eddie Williams and regional director Ian Parrott which highlighted the achievement of 5 million hours accident-free in the agriculture department - the first time in its history. They then visited the mill, the clinic and a number of agricultural operations.

  In the spirit of continuous performance assessment, directors from ABF, Limbe Office and Durban had a performance review for Dwangwa mill from 29-30 June 2011. During their visit they also had an opportunity to visit the Estate medical facilities, Kasasa Private School and witness agriculture management and the fire team setting fire to one of the fields.

  
  

  

  
  

  The group that visited the agriculture department at Nchalo were (from left) David George (group risk manager), Steve Bradley (ABF  group safety and environment manager), Des Pullen (ABF HR director), Ian Parrott (regional director responsible for Malawi, Tanzania and Zambia), Mike Hankinson (director), Ignatious Majamanda (agriculture manager) and Thomas Binzi (agriculture safety and quality assurance officer).

• HIGH-LEVEL NEPAD VISIT TO ILLOVO SOUTH AFRICA

  
  

  THE role that Illovo plays in the agricultural development of small-scale farmers, and how these models can be replicated in other parts of Africa, were some of the key focus areas of a recent visit to Illovo South Africa by members of NEPAD’s (New Partnership for Africa’s Development) Business Foundation (NBF) and its Planning and Co-Ordinating Agency (NPCA). 
  
  In an overview of South Africa’s opportunities and challenges, managing director Graham Clark stressed the need to improve profitability along the whole value chain with good grower relationships key to this process. 
  
  The team also visited Sezela where more was explained about the Sizanayo project, a ground-breaking initiative which involves the rehabilitation of around 2 000 hectares of cane, together with the establishment of an additional 2 000 hectares of new land under cane. The project is ultimately forecast to increase cane supplies to the Sezela factory by about 180 000 tons per annum and benefit around 4 000 small-scale farmers. It also highlights the good relationship among the three partners: Illovo, the growing sector and the Government through the Department of Rural Development and Land Reform.
  
  As Njabulo Zwane, Illovo’s agricultural development manager says: “The NEPAD teams came away with a greater appreciation and broader understanding of the Sizanayo scheme, particularly as it might apply to replication in another part of Africa, and how Illovo can play an increasing role in the delivery of agricultural development in the rural areas of other countries.”

  
  

  

  
  

  PICTURED at Illovo’s Mount Edgecombe offices are (from left) front: Komla Bissi (NPCA), Dr Ros Thomas (NBF), Martin Bwalya (NPCA), Graham Clark; Njabulo Zwane, and back: Ibrahim Gourouza Magagi (NPCA), Gavin Dalgleish and Leon Gouws (NBF).

• FIRST LADY VISITS MARAGRA HEALTH CENTRE

  
  

  THE first lady of Mozambique, Maria da Luz Guebuza, visited Maragra Health Centre, where she learned about its operations as well as its needs. Maria da Luz was welcomed by several groups, primarily Maragra’s top management and a traditional “Makwaela” dance group from Maragra Primary school.
  
  She looked very happy with the assistance offered by Maragra in the renovation of the Health Centre, as well as in the provision of several materials for hospital use. She made a special visit to the pre-maternity waiting room, a totally new building constructed with Maragra’s own funds. She was also informed about the launching of the project “Mukume ni Vemba”, which aims at motivating women to have their babies at the maternity facilities. In this project, each woman who goes through the pre-maternity waiting room, after delivering her baby is offered a “Mukume” (a covering made by joining three pieces of cloth called “capulanas”) and a separate capulana.

  
  

  

  
  

  EXCHANGE of handshakes between Maragra GM Mike Buchanan and Mozambique’s First Lady, Maria da Luz Guebuza.

• ILLOVO’S ‘YOUNG GUNS’ GET THEIR CHANCE TO SHINE

  
  

  ALL Illovo’s six countries of operation were represented at the biennial Group EIT Conference held at Head Office on November 8 and 12 papers were presented.
  
  The winning paper, entitled “Modification of the Scale Discharge Mechanism for the Sugar Pre-pack Machines (The Vertical Form, Fill and Seal Machines)”, was presented by Albert Nyirongo from Nchalo, followed in second and third place by Roy Gent and Stefan Gartner respectively, both from Sezela.  Certificates and prizes were presented by Group Operations Director Barry Stuart. 
  
  The generally high standard of papers impressed the adjudicators and credit also goes to the presenters’ mentors, as well as the support given by managers at the presenters’ operations. The conference happens every two years, where each country has the best presenters selected to come through to the group conference. 

  
  

  

  
  

  Albert Nyirongo of Nchalo (LEFT), who presented the winning paper, receives his certificate from group operations director Barry Stuart.

   

• SUPPLIER OF THE YEAR

  
  

  

  
  

  MARCUS NEL, MD of Macsteel Trading, Durban, received the Supplier of the Year award for 2011 from Illovo’s MD Graham Clark at a Head Office function on November 22.

• TWO PROGRAMMES DEVELOP OUR LEADERSHIP

  
  

  2011 had two group-wide development programmes for selected middle, senior and general managers across the business. Both entailed two teaching weeks, one in each half of the year, as well as syndicate projects. Subjects covered included business, team and leadership topics. A strong component of both was the development of personal insight by delegates via various psychometric tests and 360 feedback.
  
  -  The Fast Track Development Programme (FTDP), run for the first time in Illovo, was facilitated by the Gordon Institute of Business Science and attended by 19 middle and senior managers. 
  
  -  The Group Leadership Development Programme (GLDP), facilitated in partnership with the University of KwaZulu-Natal, with executive input, was attended by 20 senior and general managers.  
  
  Both programmes have been assessed to have made a significant contribution to developing our leadership pipeline to take the company into the future to successfully meet its planned performance and growth targets.

  
  

  THE SERIOUS SIDE FROM LEFT (sitting): Seif Mkwatshu (Kilombero), Shaun Robert (Corporate finance Head Office) and Phil Nkosi (Technical services Head Office); (standing): Guy Shange (Umzimkulu) and Sandile Zuma (Merebank).

  AND THE FUN SIDE THE message is: Work should also be fun. This karaoke quintet belting out a number are (from left) Leon  Haggie (Sezela), Muhoja Manane (Kilombero), Rowan Mumbo (Nakambala), Ian Sautu (Nakambala) and Guy Shange (Umzimkulu).