Saturday, 03 October 2015
Illovo Sugar Ltd


ZAMBIA SUGAR’S new R800 million plus development, the Nakambala Product Alignment and Refinery (PAAR) project, is gaining momentum on site. Teichmann the Civil Works Contractor has completed the ground preparation and has started the piling work for the New Refinery. Both the EPCM project team from Bosch Projects and the Zambia Sugar project team have representation on site to oversee the early project activities and to prepare for the mobilisation of the rest of the contractors to site. The project procurement process is well down the line with the engineering design also in full swing. As in all projects there are challenges to overcome but the project teams are confident that the project will be completed within budget, on time and will meet the specifications.

The announcement of the project came earlier in 2015 when it was revealed that the “Product Alignment and Refinery Project” - nicknamed “Nak II” - will more than double refined sugar production capacity to around 100 000 tons per annum and increase annual sugar production capacity from 420 000 to 450 000 tons. The more than R800 million expansion involves the construction of a modern, high specification refinery and will also include a range of smaller factory improvements.

The increased cane supply for the improved Nakambala factory will come primarily from area expansions of which the smallholder development at Manyonyo, involving some 145 individual growers, 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.

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. These sentiments were underscored in a company announcement made at the time by Managing Director, Gavin Dalgleish, as follows:

Construction is underway at Zambia Sugar's Nakambala factory to more than double annual refined sugar production capacity and increase annual sugar production capacity from 420 000 to
450 000 tons.

"Hello all, today marks a special point in the Illovo calendar, being the day on which the proposed refinery project and production capacity increase of the Zambia Sugar factory, more commonly known as "Nak II", is officially announced in the public domain. As you will read in the attached media release, which is being simultaneously released in Zambia, South Africa and across the wider AB Sugar Group, Nak II embodies the four cornerstones of our strategic plan, those being: Developing new markets, Cost reduction, Diversification through downstream expansion, and Preparing for long-term sugar expansion.

What's more, is that the major investment project of nearly R1bn comes largely about us listening to our marketplace and developing a blueprint which, in addition to satisfying increased domestic demand for refined sugar from our industrial customers, will also give Zambia Sugar a unique opportunity to align its manufacturing assets behind a new post-EU export sales mix and higher food safety standards. We are naturally also really excited that the undertaking gives further impetus to our smallholder development model in partnership with the Zambian government, which will see growing cane deliveries from the Manyonyo smallholder scheme providing the bulk of additional throughput for the planned sugar production increase.

We are at the point of project commencement; there is yet lots to do and many challenges to face - but in closing I would like you to join me in thanking the many people at Zambia Sugar and at the group level whose dedication, enthusiasm and propensity for hard work has made the project a reality. Good luck to you all over the next year."

FROM LEFT: Former Mazabuka Town Clerk Mr Wisdom Bwalya, Eugene Munyama (Mazabuka D.C.), Mr Sizongo Siakalenge (PS Ministry of Commerce, Trade & Industry), Mrs Margaret Mwanakatwe (Minister of Commerce, Trade & Industry), Mrs Rebecca Katowa (Zambia Sugar MD), Mr Fidelis Banda (ZS Board Chairman) and His Worship the Mayor of Mazabuka Mr Stanley Sakala after unveiling of the plaque outside the Nakambala Administration building.

The expansion project was launched by Minister of Commerce, Trade and Industry, Hon. Margaret Mwanakatwe on 18th February 2015 at Nakambala Factory. Mrs Mwanakatwe applauded the investment by Zambia Sugar which demonstrates that the company was a leader in the sector and had confidence in the economy.

She noted that government was creating an enabling environment that encouraged companies like Zambia Sugar to make strategic investments. Managing Director Mrs Rebecca Katowa said the K522 million (Zambian Kwacha) project cost represented an investment in the community of Mazabuka. The key driver for the investment in the new refinery is Zambia Sugar’s impressive historical track record and a strong forecast for domestic refined sugar growth.

She said the new project underlines the company’s commitment to the economic growth and prosperity of Zambia, and aligns it strongly with the Government’s clearly stated desire for higher levels of foreign direct investment, industrialisation and job creation.

Board chairman Mr Fidelis Banda said the board did not hesitate in approving the refinery expansion project because of the value it represented. The chairman said Zambia Sugar’s holding company, Illovo Sugar Limited and Illovo’s parent company, Associated British Foods (ABF), had fully supported the expansion.

FROM LEFT: Nak PAAR’s Graham Rolfe (Project general manager), Duncan Dlamini (safety officer) and Brad Davis (E & I project engineer) inspect the New Refinery site after the ground had been broken for the construction project.



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