Empowered sugar growing gets sweeterApril 18, 2006

By Margie Inggs, Business Report;  Africa Business Daily, April 18 2006; Africa Economist April 19 2006

Durban - Seven medium-scale growers participating in Tsb Sugar’s black economic empowerment initiative are expecting their first profits from their 35ha to 40ha plots on the farm Siyathuthuka, in the Malelane area of Mpumalanga.

In addition to owning their individual plots, the growers all have shares in Siyathuthuka, a share block scheme with joint assets that include roads, pumps, buildings, irrigation infrastructure, a canal and a police station. The board of directors comprises all the growers, as well as Tsb Sugar, which has the casting vote while it is still owed money.

Vusi Khoza, Tsb Sugar’s General Manager of Corporate Communications, said the company had guaranteed the loans valued at about R15 million that the growers received from Absa and would continue to have a casting vote until the loans had been paid off over a maximum of 10 years.

"The growers … were selected by Tsb Sugar on the basis of their success as small-scale growers on their 5ha to 7.5ha plots," Khoza said. "Tsb Sugar aims to develop 50 small-scale growers into fully fledged commercial farmers."

Tsb Sugar's managing director, Hennie Snyman, said the aim of the project, which is the first of several similar projects, was to increase the number of black growers supplying cane to Tsb Sugar. At present, 20 percent of Tsb Sugar's cane is supplied by small- and medium-scale growers.

" Tsb Sugar is committed to land reform but it must be sustainable," Snyman said.
The department of land affairs has provided grants valued at R3.3 million to the growers to help pay for the land, valued at between R58 000 and R65 000 a hectare.

Tsb Sugar bought the run-down farm for R4.5 million and rehabilitated it over two years at a total cost of R11.7 million. The company provides ongoing mentoring and support to enable the growers to deal with day-to-day issues such as irrigation, fertilisation and financial management. The new owners were given two weeks of pretraining with the farm manager before starting work.

"The growers are getting an average 135 tons a hectare, compared with the region's average 90 tons a hectare," Khoza said.

In addition to Siyathuthuka, Tsb Sugar has a 16-year contract to manage the farm Vorem, which the workers bought when the previous owner was forced to sell it in 2003. The workers were given government grants and grouped together to buy the farm, which is held as an asset by a company called Blue Cloud, in which the workers have equal shares.

"The farm was producing 60ha of cane a year when it was purchased in 2003 … A substantial two-year rehabilitation programme by TSB SUGAR… has increased its potential to 115 tons a hectare," Khoza said.

Snyman said Tsb Sugar had the highest supply of cane from small-scale growers in the industry.