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Tariro Stacey Gatsi
AGAINST the adverse effects of unfavourable weather, Hippo Valley Estates Limited, has reported a 68 percent increase in export sales volume from 40 246 tonnes in 2022 to 67 527 in the comparable period in 2023.
This increase was made possible by the redirecting of the displaced local market volume to exports as a way to sustain operations.
In a trading update for the third quarter ended December 31, 2023, the company chairman, Mr Canaan Dube said the company faced several challenges during the period but despite all that it maintained a steady sugar production
“At the end of the crushing season, Hippo Valley Estates produced 194 684 tonnes of sugar trailing behind the previous year’s figures.
“The decrease in production was primarily due to lower yields and a shortage of critical spare parts, resulting in unscheduled mill stoppages and reduced plant reliability. The company’s mill stoppage rate increased 22 percent from 14, 6 percent in the previous season to 17, 8 percent currently, leading to carryover cane amounting to 652 hectares,” he said.
Despite the challenges, the quality of the cane harvested remained above the prior recovery efficiencies. The estimated recoverable crystals in sugarcane (ERC) and the cane to sugar ratio were measured at 12, 10 and 8, 27 percent, respectively, surpassing the previous year’s figures. These metrics indicate that the sugar content in the cane was higher, resulting in improved sugar recovery efficiencies.
In addition, Zimbabwe Sugar Sales (Pvt) Limited (ZSS), the sole marketing desk for raw and brown sugar produced by the Zimbabwe Sugar Industry, reported a total industry sugar sales volume of 295 382 tonnes for the nine months leading up to December 31, 2023.
“Hippo Valley Estates accounted for 52, 54 percent of the total sales volume. However, industry sales into the domestic market decreased by 18 percent compared to the same period in the previous year, primarily due to duty-free sugar imports as a result of Statutory Instrument (SI) 80 of 2023,” he said.
The revenue at the end of the third quarter grew by 77 percent to $977, 7 billion, driven by price adjustments to counter hyperinflationary pressures. However, increased business costs particularly in manpower offset the revenue growth.
“Looking ahead, the company aims to improve yields, plant reliability, capacity utilisation and operating cost efficiencies in the medium-to-long term.
“In the short-term, the company’s priorities include completing the off-crop programme, enhancing quality and safety performance, optimising the route to market and implementing cost containment measures,” revealed Mr Dube.
The company will also focus on developing new markets to generate additional foreign currency for critical imports.
Hippo Valley Estates remains committed to sustainable and ethical practices across its value chain, actively managing its carbon footprint, and ensuring responsible agricultural practices, the update said.
Online Reporter