The sugar producer, a majority-held subsidiary of the Illovo Sugar group, further stated that the investment will give further impetus to the development of Zambian smallholder cane farmers.
“The project scope includes the construction of a modern, high-specification refinery to more than double current annual refined sugar production capacity to around 100,000 tons,” Illovo said.
(WATCH VIDEO: Illovo H1 HEPS drop 10%)
“This project consolidates Zambia Sugar’s position as Africa’s single-biggest cane sugar producer and underlines the broader Illovo group strategy of focusing on growth within its domestic and regional markets and downstream opportunities to diversify its product mix.”
It added that the increased cane supply for the improved Nakambala factory will come primarily from area expansions of which the smallholder development at Manyonyo is a major part.
“This development will benefit the local community in terms of both revenues derived from the supply of cane to the factory and, as part of a broader multiplier effect, employment opportunities for seasonal agricultural workers and other job creation opportunities.”
According to [DATA ILV:Illovo], it is estimated that upwards of 400 people will be employed during the construction phase of the project, which is scheduled for completion in 2016.
“The key driver for the investment in Zambia is the strong historical and forecast domestic refined sugar sales growth which has been primarily driven by demand from domestic and regional industrial manufacturers,” said the company.
“The project cost amounts to more than 522 million Zambian kwachas, funded by debt finance largely sourced from within Zambia itself and from Zambia Sugar’s own available cash resources.”
Zambia Sugar managing director Rebecca Katowa believes that the company’s strategic plan focuses on diversification through value addition to its core sugar products as key to achieving sustainable growth.
“This project, together with our previous significant expansion of the agricultural and factory operations serves as growing evidence of this strategy and of our support of government initiatives to promote rural development,” she stated.
“We are especially pleased that this investment touches on the continuing development of our successful small-holder sector whose increasing cane supplies to the factory are fully supported in the project plan and on further job opportunities for local Zambian people.”