Illovo Sugar Malawi Limited sees an increased sugar production in the next year as a result of over 400 hectares of additional land being planted with cane by smallholder farmers in Chikhwawa.
Illovo Malawi chairperson Graham Clark said this in Blantyre on Friday at the companyâ€™s 47th annual general meeting.
Clark said the surge coupled with an anticipated general improvement in yields and sucrose levels expected across its companyâ€™s operations on both their own and smallholder land should result in an increase in the overall cane crop.
â€œInvestment in factory capital projects and continuous improvements in plant efficiencies in the new season, building upon the improved factory performance during the last crushing season, should ensure improved rates of factory throughput and recoveries and should augur well for an improvement in overall sugar production year on year,â€ he said.
The company has recorded after tax profits of K8.1 billion (about $32.4m) up from K6.4 billion (about $25.6m) the previous year in the year ended 31 March 2012.
Improved factory operational efficiencies and recoveries, alongside the slightly bigger cane crop enabled the company to have a total sugar make of over 286 000 tonnes for the season, up from 282 000 in the last season.
According to Clark, domestic sales of sugar totalled in excess of 168 000 tonnes, representing 60 percent of all sugar sold for the year.
â€œDuring the latter part of the financial year sugar stocks had to be managed carefully as traders resorted to exporting the commodity to earn foreign currency, but timely and welcome intervention by government curbed this malpractice and ensured a continued, but at times limited supply to the local consumer.
â€œAdvantage was again taken of good prices on offer for the balance of the sugar in excess of local market demand with over 80 000 tonnes exported to Europe and the USA and some 35 000 tonnes supplied into the highly priced regional market mainly in Zimbabwe,â€ said Clark.
He also indicated that total revenue from the sale of sugar and molasses jumped 18 percent from the previous yearâ€™s K30.8 billion (about $123m) to K36.5 billion (about $146m).
But Illovo bemoaned the difficult economic environment that prevailed in the country, particularly the shortage of foreign currency and fuel, arguing it impacted on the companyâ€™s ability to operate at its optimum levels of efficiency.
They also specified that during the year, conditions at Dwangwa and Nchalo proved difficult and were aggravated by poor weather conditions at both the start and end of the season.