THE SUGAR INDUSTRY AT A GLANCE

• 26 600 growers

• 25 200 small scale growers

• 1 400 commercial growers

• including 323 black growers

• 14 sugar mills

• 90 000 Jobs

• 2,2 million tons of sugar p/a

• 12 billion rand annual income

• Estimated 1 Million livelihoods

2
 COST COMPETIVENESS
Rank Total F.O.B. Rank Total Ex-Factory Costs
Stowed Costs 1 Nicaragua 8 Zambia
1 Nicaragua 2 Guatemala 9 Swaziland
2 Guatemala 3 Brazil (C.S.) 10 Honduras
3 Thailand 4 Colombia 11 El Salvador
4 Brazil (C.S.) 5 Malawi 12 Bolivia
5 Colombia 6 Thailand 13 South Africa
6 Honduras
7 Zimbabwe 14 Sudan
7 El Salvador
8 South Africa Source: LMC International; Worldwide survey
9 Zimbabwe of sugar and HFCS Production Costs; 2012
Report
10 Swaziland

3
LAND AND AGRARIAN REFORM

• An increase from 5% in 1994 to 21% of

freehold transferred

• Black growers produce 2.5 million tons of

cane

• Settlement of claims will see 50% of land

ownership in hands of black growers

• Land reform in sugar leading the way

RENEWABLE ENERGY

DEVELOPMENTS FROM SUGARCANE

• Globally more sugar industries are
transforming to co-produce sugar, ethanol
and electricity
• World’s two largest cane producers, Brazil
and India, have access to sugar, regulated
electricity and ethanol markets
• South African sugarcane value chain is
cost but not revenue competitive

5
RENEWABLE ENERGY

DEVELOPMENTS FROM SUGARCANE

• South Africa - urgent need for

additional power generation
• Renewable energy as electricity and
ethanol part of dti sugar industry
strategy

6
SUGAR INDUSTRY COGENERATION

VALUE PROPOSITION
• All 14 sugar mills match fuel supply with own energy use
• 100% cogeneration implemented at all 14 mills
• Generic Sugar Industry Proposal
• New Power Island
• Medium to High pressure power island
• Develop additional area under cane
• Develop additional fibre sources
• Mill Energy Efficiency and Agricultural Yield
Improvements
• Cogeneration supplies steam to sugar mill
• Sugar mill procures electricity from grid
• Power station critical to operation of sugar mill
• Tariff based on capital return, operating and fuel cost

7
 POTENTIAL IN SUGARCANE AGRICULTURE AND
PROCESSING
Tops and leaves Electricity & Steam
not currently utilized, is Fibre • Currently fuel supply to match
about equal to own energy use
sugarcane fibre • At high efficiency 2 to 7 times
more electricity
Other Products:
Animal feed, paper, chemicals
Sugarcane Future – cellulosic ethanol
15% Fibre
Global trends
• Diversify product offering
15% Sugar
• Improves revenue & cost
effectiveness
• Brazil leading in ethanol
• India leading in electricity
Sugarcane – one of most efficient plants to Sugar to market
convert sunlight to energy
Molasses Water free
Season – ethanol could extend existing 8 (blend to E10)
months Sugars to fuel ethanol Water containing
(Fuel Flex Vehicles)
8
SUGAR INDUSTRY COGENERATION

VALUE PROPOSITION

9
SUGAR INDUSTRY COGENERATION VALUE PROPOSITION

10
SUGAR INDUSTRY COGENERATION VALUE PROPOSITION

11
Quality and quantity of jobs
32 786 jobs
• Construction – 7 023
• Operation – 437
• Agriculture – 25 326

12
 COMPARATIVE ASSESSMENT ACROSS RENEWABLE
TECHNOLOGIES

TECHNOLOGY SOLAR WIND HYDRO CSP SUGAR

Window(s) 1+2 1+2 2 1+2 proposed
MW Allocation 1049 1 197 14 200 712
Total project cost
33 985 23 621 631 15 848 20 402
(Rm)
Local content value –
11 988 6 767 421 4 029 12 690
construction (Rm)
Local content %
35.3% 28.6% 66.7% 25.4% 68%
(construction)
Job creation
14 943 3 448 261 1 827 7 023
(construction)
Job creation
415 193 7 120 437
(operations)
Job creation (fuel) N/A N/A N/A N/A 25 326
TOTAL JOBS 15 358 3 641 268 1 947 32 786
• Consolidated industry impact
• Level of development at different stages 13
 WAY FORWARD

• Members of the SA sugar have

responded to Request for
Registration and Information (RFRI) –
12 July
• Require an enabling procurement
programme fulfilling both the
electricity (Department of Energy) and
sugar industry (dti) objectives
• Contractual agreements
• Procurement approach and timing
• Process to engage on low
hanging fruit projects
• Inclusion of biomass
cogeneration in long term energy
plans e.g. IRP and IEP

14
Thank You

15