Food & Beverage Magazine November 17, 2009

Tsb Sugar Holdings, founded in 1965, operates three mills in South Africa, at Malalane, Komatipoort, and one in Pongola (acquired from Illovo Sugar as from 1 August 2009). Following the Pongola mill acquisition, Tsb Sugar now produces about 650,000t of sugar per year (in a normal season), or about 30% of all sugar produced in South Africa. Tsb Sugar, a 100% subsidiary of Johannesburg Stock Exchange-listed Remgro Ltd, has also invested in citrus agriculture and produces animal feeds from by-products of  the sugar manufacturing process.

The total area of the Nkomazi/Onderberg (bordered by the Kruger National Park, Mozambique and Swaziland) which Tsb Sugar serves is about 350,000ha. The region is renowned for its agricultural potential offering a unique combination of soil, climate and water; many subtropical crops, including sugar cane thrive here. 60,000ha of arable land is currently under irrigation. The long term production average is 13,3t of sucrose per hectare.

18% of the cane supplied to the mills is from about 1,300 small scale growers, 1% from medium scale growers’ estates and 39% from large scale growers. The remainder of the cane delivered (42%) comes from land owned by claimants - some of this land being managed by Tsb Sugar. Land reform is an important issue for SA as a country and for the agrifood sector especially. Tsb Sugar - both in sugar and in citrus production - is creating, supporting and building a model in which land reform can be a success both for an agribusiness company like itself and for the country (which includes food processors). This is now a point of innovation and pride for Tsb. Over 60% of the cane delivered to the two mills is currently from black-owned land, and this proportion will increase with time.

Tsb Sugar’s cane supply department provides extension, technical and irrigation support and advice, including maintenance, to small scale growers.

Cane supply to the factories is on a 24-hour basis utilising in-field loading directly onto the transport vehicle. As such, neither mill has a cane storage yard but rather uses the schedules vehicle fleet to optimise the supply chain.

Value-adding to sugar
Sugar is a commodity so local and international commodity prices are of vital importance. Value-adding is one way to increasing margins on the product itself.  However for a sugar mill company, producing co-products is an additional option for increasing profitably. Molasses with its inverted sugars - fructose and glucose - can be used to make cattle feed and/or ethanol.  Tsb Sugar took the cattle feed route and in 1985  commissioned the Molatek animal feed factory adjacent to the Malalane mill.

Co-generation and Ethanol
Currently, the most obvious next step, and most valuable step for the SA economy, in the development of co-products by sugar mills is co-generation of electricity using bagasse.
Its application is a matter of negotiation on an industry level with the government and Eskom. Another possible next step in co-products is to produce ethanol.

Booker Tate knowledge base
The acquisition by Tsb of Booker Tate gave Tsb a knowledge base in sugar which would be hard to beat, says John du Plessis, who was appointed MD of Tsb Sugar Holdings earlier this year. Booker Tate's two offices in SA - in Malalane and Durban – now take responsibility for all operations in Africa, while its head office in Thame, England, takes responsibility for its businesses in the rest of the world.
For Tsb Sugar, Booker Tate gave access to the world market and the most advanced technologies. Currently Booker Tate:
• Has huge agricultural information (for instance, soil analyses in Tanzania) which does not become outdated.
• Has skills which put Tsb Sugar in a position to access opportunities and look at investments.

Golden Frontiers Citrus
Golden Frontiers Citrus (GFC) is one of the largest growers, packers and marketers of citrus in SA. GFC has 1,700 ha of citrus under its control, including three of its own farms, and five pack houses. Its citrus varieties cultivated include Star Ruby, Rose, Marsh, Delta, Valencia and Midnight. No processing is done - only packaging, primarily of grapefruit for export, via Maputo and Durban ports.

The story of the Selati brand
Selati is the biggest retail sugar brand in SA today, by volume sales. Tsb’s acquisition of the Pongola mill will mean that Tsb’s production will rise by about 150,000t/year - from about 550,000t/year currently to about 700,000t. This means that Tsb will then account for about 30% of SA’s sugar production and will account for about 33% of the retail sales of SA Sugar Assoc sugar to the SA retail market (this includes imports) .

Quality Sugars, the marketing division of Tsb Sugar consists of a packaging plant in Malalane and a marketing branch in Johannesburg. It packs and distributes more than 360,000t/year of sugar and sugar products for the local market and sells about 180,000t into the export market.
 
Tsb’s logistics department, which falls under Quality Sugars, can store about 38,000t of packed sugar. It distributes between 1,500t and 1,800t of sugar daily via road and rail.
Quality Sugars’ sales and marketing office is in Johannesburg, at the main inland market, which has been of benefit.

Swazi Sugar
RSSC is Swaziland’s largest sugar-producing company (and the largest producer of potable ethanol in Southern Africa). RSSC and Tsb Sugar jointly formed Mananga Sugar Packers (MSP), a marketing company that packs, sells and distributes sugar. Mananga Sugar Packers’ brand, First Sugar, a retail price fighter brand, is distributed in SA areas close to Swaziland, in KwaZulu-Natal and Free State. MSP also packs house brand sugars for some of the major SA retailers.