The International Market of Sugar:

Approximately 110 nations currently produce sugar from either cane or beet, with eight
producing sugar from both cane and beet. Sugarcane contributes for about 80% of world sugar
output on average. The top 10 producing nations (India, Brazil, Thailand, China, the United
States, Mexico, Russia, Pakistan, France, and Australia) accounted for over 70% of world output
during the October/September season. Sugar crops provide alternatives to food production, such
as livestock feed, fibre, and energy, especially biofuels (sugar-based ethanol) and power co-
generation (cane bagasse). Sugarcane is widely considered to be one of the most important and
efficient biomass sources for biofuel generation. Sugar production and processing are linked to a
variety of environmental and social challenges, and sugar crop producers, processors, as well as
energy and food industries, are looking for solutions to address concerns about sugar production,
biofuels, and sustainability.
Between 2001 and 2018, global sugar consumption climbed from 123.454 million tonnes to
172.441 million tonnes, representing a 2.01% yearly rise. However, world sugar consumption
growth has slowed significantly in the second part of this decade, to less than 0.84 percent per
year (average for 2016-2018), with no increase in 2018. India, the EU, China, Brazil, the United
States, Indonesia, Russia, Pakistan, Mexico, and Egypt are all major sugar consumers. The
global sugar trade is estimated to be over 64 million tonnes per year. Raw sugar accounts for
around 60% of all worldwide sugar commerce. Despite the fact that numerous nations produce
sugar, the top five exporters (Brazil, Thailand, the EU, Australia, and India) accounted for over
70% of global commerce in 2016-18. Brazil, as the world's greatest producer and exporter,
dominates global commerce, accounting for around 45 percent of all exports.
MAIN COMPANIES IN THE INDUSTRY:

1. JDW Sugar Mills:

The Sugar Division is made up of three sugar mill units: JDW Unit-I, JDW
Unit-II, and JDW Unit-III, which are located in the Punjab and Sindh districts
of Rahim Yar Khan and Ghotki, respectively. The Company has completed and
commissioned its two high-pressure Co-Generation plants at Sadiqabad (Unit-
II) and Sadiqabad (Unit-III) (Ghoki). After passing all testing, certification, and
trial run criteria, the first 26.6 MW plant at Unit-II began commercial operations on June 12,
2014. After completing all pre-commissioning processes, the second 26.8 MW project at Unit-III
began commercial operations on October 3, 2014. JDW also manages Sugarcane Corporate
Farms in Punjab and Sindh, with a total area of 24,000 acres. JDW has been able to build highly
efficient and eco-friendly farms with better yields by combining knowledge, experience, modern
equipment and machinery, and unique agronomic practices. The company's innovative farming
practices have also resulted in current farmers' capacity being enhanced, resulting in better and
dependable cane supply to JDW.
 2. Jauharabad Sugar Mills Limited:
Jauharabad Sugar Mills Limited is a public limited company that has
the distinction of being one of Pakistan's first sugar mills. It was
founded by Pakistan's THAL Development Authority, which was
later privatised and listed on the Pakistan Stock Exchange Limited.
It has been in existence for the last 65 years. In March 2013, the
present management took over the Company's assets and
obligations, paid off existing sponsors, and renamed it Jauharabad
Sugar Mills Limited from Kohinoor Sugar Mills Limited, acquiring
a majority interest. Throughout four crushing seasons, the Company
has effectively consolidated its Sugar Mills operations and strengthened its financial position.
3. Tandlianwala Sugar Mills Limited:
Tandlianwala Sugar Mills Limited (TSML) was established as a public limited company in
Pakistan in 1988, and its shares are traded on the Pakistan Stock Exchange (PSE). The
Company's main business is producing and selling white crystalline sugar, ethanol, and carbon
dioxide. TSML Sugar Unit-I (Kanjwani – Faisalabad –
Punjab) has a capacity of 6,500 TCD, TSML Sugar Unit-II
(Zamand – Dera Ismail Khan – KPK) has a capacity of
12,000 TCD, and TSML Sugar Unit-III (Rehman Hajira –
Muzaffargarh – Punjab) has a capacity of 13,500 TCD. It is
one of the country's leading sugar mills in terms of sales and
output, with a combined crushing capacity of 32,000 TCD.
Furthermore, TSML is currently upgrading and expanding
its operating capacities for energy conservation, including
the installation of sophisticated machinery that will increase
its average sugarcane crushing capacity, fuel-saving, and
steam percent cane saving, allowing it to save more bagasse and electricity. During FY17, it will
also raise its capacity from 32,000 TCD to 38,750 TCD by modernizing and installing new
equipment.
 4. Haseeb Waqas Sugar Mills Limited:
HWSML is one of Pakistan's major white refined sugar producers, with a daily crushing capacity
of 10,000 million tonnes of sugar cane. Based on 160 days
of season and an 8.5 percent sucrose recovery rate,
HWSML generated roughly 136000 million tonnes of
white refined sugar every year. HWSML was established
as a public limited company in 1991. It is around 100
kilometers from the Group Head Office in Lahore, near
Nankana Sahib. The HWSML Group's corporate objective
has always been to develop technology. Through its
research and development initiatives, it has defined new
pathways for the sugar industry. For the first time in the
country, Haseeb Waqas Sugar Mill created and deployed cutting-edge technology for cane
processing, including a split cane carrier system. This ushered in a revolution in Pakistan's sugar
sector. Haseeb Waqas Sugar Mill has one of the greatest crushing rates in the industry. Haseeb
Waqas engineering developed and produced the mill. The milling tandem is made up of five 42′
′X 84′′ mills with a crushing capacity of 10,000 tonnes per day. A 5-roller pressure feeding mill
was used to do this. The Pressure Evaporation System with Falling Film Type Evaporator Bodies
was another first in Pakistan from Haseeb Waqas Sugar Mill. The mills have three 80-ton
boilers. Haseeb Waqas Group uses revolutionary manufacturing procedures to produce sugar
with fewer impurities and a white transparent white tint. Sugar satisfies all quality requirements.
5. Ranipur Sugar Mills (PVT.) Limited:
With the utilisation of state-of-the-art equipment, the Falling Film Evaporator, and SCP, Ranipur
Sugar Mills aims to become one of Pakistan's most cost-effective
sugar plants. Ranipur Sugar Mill uses a state-of-the-art plant to
process and manufacture the best sugar, which it then distributes
throughout Pakistan. The Ranipur Sugar Mill is an important
element of the rural economy, giving thousands of jobs in a variety
of vocations. A sugar cane mill is a facility that processes sugar
cane to generate either raw or white sugar. It can also refer to the
machine that smashes the sugar cane sticks to extract the juice.
Ranipur Sugar Mills' objective is to create the greatest quality
sugar while leading the industry in efficiency, customer relations,
and green manufacturing processes.
 6. Shakarganj Mills Limited:
Shakarganj Mills Ltd. principally manufactures refined cane sugar
and sugar by-products. The mill produces a variety of sugars,
including pharmaceutical, beverage, and commercial grades, soft
brown sugar, caster and icing sugar, sugar cubes, sachets, and retail
packs, as well as soft brown sugar, caster and icing sugar, sugar
cubes, sachets, and retail packs. In the Pakistani retail sector,
Shakarganj Sugar is the dominant brand of refined sugars and
speciality sugars.

HISTORY OF THE COMPANY:

JDW Sugar Mills Limited (PSX: JDWS), founded in 1990 as a private limited business in Rahim
Yar Khan by Jehangir Tareen, is Pakistan's largest sugar producer. It accounts for 15-17 percent
of Pakistan's sugar output on its own. JDW is the sole sugar firm in the KSE100 index, with a
market capitalization of more than Rs 33.4 billion. The firm expanded after acquiring two more
units: JDW Unit 2 (previously United Sugar Mills) was established in 2005, and JDW Unit 3
(formerly Ghotki Sugar Mills) was established in 2006. JDW's total crushing capacity is 44,500
TCD, thanks to the three machines (tonnes of cane per day). Deharki Sugar Mills (Pvt) Limited
and Faruki Pulp Mills Limited are two of the company's subsidiaries. Together, they make up the
JDW Group, which had yearly revenues of about Rs 50 billion in MY16 (Marketing Year).
While sugar manufacture is still the company's main focus, JDW Sugar Mills has expanded into
two new areas: corporate farming and co-generation. In corporate farming, the business has built
efficient and environmentally friendly farms with greater yields, increasing farmer capacity and
improving cane supply. The firm has two bagasse-based, high-pressure co-generation power
plants with a combined capacity of roughly 53 MW, both of which were commissioned in 2014.
JDW’S HISTORICAL PERFORMANCE:
The sugar business has suffered as a result of the provinces' exorbitantly high sugarcane prices,
and many sugar mills are in the red. JDW, on the other hand, appears to have never been one of
them; the firm has been a model of growth, with annual increases in both revenues and profits
like clockwork. The five-year revenue CAGR is 10.39%, while the five-year net profit CAGR is
a staggering 24.2 percent. This is especially intriguing considering sugar accounts for around 82
percent of the company's revenue. JDW's excellent recovery rates might be one of the secrets to
its success. One of the company's divisions consistently has the greatest recovery rate in
Pakistan, well above the national average. Punjab experienced the highest recovery from the
units JDW 1 and JDW 2 in the previous year. According to a PSMA official, southern Punjab
has a more climatically favourable sugarcane crop, with a recovery rate of more than 2%,
compared to central and northern Punjab.
JDW's sugar output has also been on the rise (although it dropped in FY15 owing to
unfavourable crop conditions caused by lack of rain and non-availability of irrigated water). The
company's domestic market share remains strong; exports account for less than 5% of JDW's
sales, with the balance sold locally. However, the firm has suffered at the hands of the
government in terms of exports, since it has had to wait for the export subsidies to be released,
according to the company's accounts.

FINANCIAL PERFORMANCE OF JDW:

As sugar prices rose in both the local and foreign markets, particularly beginning in June 2019,
the firm was able to command higher selling prices, resulting in higher profits than in the
previous season. However, both EBIT and PBT margins are still among the lowest in the decade,
owing to higher production costs and higher financing costs due to a drop in cane supplies.
Higher production costs result from economies of scale, as a decline in output indicates that the
fixed cost component per unit of output has grown. While the recovery rate of 11.3 percent – the
best in six years – provided some relief, cost of production increased in lockstep with revenue
due to low capacity utilisation and insufficient economies of scale. Increased interest expenditure
wreaked havoc on margins, which expanded on the basis of what seems to be an increase in
average debt for the period - the rise in debt servicing expenses due to a higher discount rate.
And, if not for a tax liability reversal, the year's bottom line could have been in the red. Interest
cover was restored over 1x times, showing that profitability might skyrocket as the discount rate
drops.
The Company's gross turnover increased by 11% year over year, owing to higher sugar and
molasses prices, as well as greater sales of carryover stockpiles at lower rates. As a result of the
higher pricing, the gross profit margin has increased from 11% to 14%. Despite all-time high
financial expenses of Rs. 3.6 billion, the Company was able to make a net profit after tax of Rs.
1,399 million this year, compared to Rs. 553 million the previous year, resulting in an increase in
earnings per share. Sugar and Co-Generation activities have virtually equally contributed to the
Company's profitability.
In comparison to previous year, better financial outcomes have resulted in an improvement in
key financial covenants. The Company meets all of its financial commitments on schedule and
maintains friendly relationships with all of the financial institutions with which it does business.
During the year under review, short term loans of Rs. 3.5 billion were converted into long term
loans in order to lower the company's overall debt and enhance financial covenants. These
restructured debts would be entirely repaid in 4 to 5 years.

TECHNOLOGICAL STATE OF THE COMPANY: