SUGAR ASSOCIATION REVENUE UP TO E5.9BN

MBABANE - Despite a drop in cane yield, Eswatini Sugar Association (ESA) has realised a notable increase in revenue.

According to the 2019/20 integrated annual report covering the period ending March 31, 2020, which was presented by Chief Executive Officer Dr Phil Mnisi at Mountain Inn in Mbabane yesterday; revenue recorded increased to E5.94 billion from E5.13 billion the previous financial year. The increase in revenue was attributed to increased sales volume and better selling prices compared to the previous year.

According to the report, the cost of sales equally increased from E4.80 billion to E5.66 billion in line with increased distributable proceeds. Profits that are made by ESA are distributed in full to the millers and growers, and form part of cost of sales.
Distribution costs incurred during the year under review rose to E13.6 million from E9 million. It was a result of more sales being on cost, insurance and freight terms.

loss

Foreign exchange loss of E4.29 million was incurred compared to E30.30 million loss in the previous year. This was primarily a result of high volatility of the Lilangeni against export currencies during the year.

“Interest paid decreased from E215.34 million to E182.42 million as a result of a better optimal funding compared with the previous year.
“Administration expenses increased from E77.4 million to E83.05 million, reads the report in part.

The carrying value of property, plant and equipment, on the other hand, increased from E139.91 million to E146.12 million as a result of additional investment on warehousing infrastructure.
“Trade receivables decreased by E89.8 million mainly as a result of customers settling their debts prior to year end.

The market conditions had improved when compared with the previous year where a lot of sugar was being imported into the SACU (Southern African Customs Union) market,” reported ESA.
In his address, Dr Mnisi had celebrated the positive figures that were recorded in the face of material issues that included rising costs of production; decline in yields; environmental impact; exchange rate fluctuations and logistical constraints, among other challenges.

Mnisi said the yields were affected by the age of cane at harvest and climate change, among other challenges. Listed external factors included the slowdown in economic activity due to COVID-19 but the good news was that the pandemic did little to derail sugar production and sales.
To mitigate cost of electricity, millers are said to be resorting to solar plants.

growers

Meanwhile, ESA is an umbrella organisation bringing together all growers and millers of sugar cane. Its highest policy-making body is the council, where growers and millers have equal representation. The day-to-day functions are run by the ESA office led by a chief executive officer, with its head office located in Mbabane

ESA is responsible for providing the services necessary for the regulation and general development of the Eswatini sugar industry as well as marketing of all the sugar and molasses produced in the country. ESA provides support services to the entire industry’s value chain which includes agricultural research and extension, cane testing, warehousing and distribution, marketing and policy advocacy.

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