News - 3rd Quarter 2009

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• ILLOVO SUGAR - MORE THAN THE SUM OF ITS PARTS

  Illovo Sugar – More Than The Sum Of Its Parts
  In a year of very sound performance, Illovo continues to grow in stature as Africa’s biggest sugar producer, spurred on by a major drive to significantly increase its cane and sugar productive capacity.

• THE SHAPE OF ILLOVO'S FUTURE

  Illovo recently announced various strategic disposals, investments and changes in structure, all related to the strategic, long-term future of the group which is currently on a major drive to significantly increase its cane and sugar productive capacity. These are important developments for our group, the main aspects of which are outlined below. Growth philosophy The group continues to consolidate its South African operations, recognising the potential for superior returns elsewhere in Africa. Accordingly, we seek to establish a profitable, stand-alone South African entity with the capacity to maintain acceptable group returns. Major investment outside South Africa will be undertaken in areas that display positive and stable social, political and economic fundamentals, have adequate water and land resources, favourable climatic and agronomic conditions, strong local sugar markets and good export potential. Strategic update In line with this philosophy, the following initiatives have either been completed or are underway: South Africa The sale of the Umfolozi sugar mill to a grower consortium has been completed effective 31 March 2009, with payment received in full; An agreement to sell the Pongola sugar mill to TSB Sugar RSA Limited has been concluded; We have acquired a 30% shareholding in and will provide technical services to a new business entity which has purchased the Gledhow sugar mill unencumbered, previously wholly-owned by Ushukela Milling (Pty) Limited (Ushukela). The other shareholders in this new business entity comprise Ushukela, a consortium of supplying cane growers and Sappi Manufacturing (Pty) Limited. Paul de Robillard has been appointed to Gledhow to manage this operation; We plan to transfer our remaining South African business to a wholly-owned subsidiary with effect from 1 April 2010. Mozambique Illovo has entered into a joint venture with the local community at Maragra to develop 4 000 hectares of land to cane over the next two years at a site located on the east bank of the Inkomati River, approximately 40 kilometres from the Maragra sugar mill. The joint venture will produce 400 000 tons of cane per annum and the project is linked to the doubling of the capacity of the Maragra factory, to 150 000 tons of sugar per annum; We have also acquired an option to purchase a 90% shareholding in the Búzi sugar estate situated near Beira, which provides the opportunity to erect a sugar factory in this area in the future. Zambia The final phase of the major expansion project, which increases the capacity of the Nakambala sugar mill to 450 000 tons of sugar per annum, was completed as planned on 1 April 2009; The group has, subject to approval by the Zambia Competition Commission and other regulatory authorities, acquired a majority stake in Nanga Farms PLC, a cane-growing company, located adjacent to the Nakambala estate, and currently producing 325 000 tons of cane per annum. Nanga has the potential to further increase cane production which delivers its cane directly to our Nakambala mill. Swaziland The expansion of Ubombo’s factory to increase sugar production to in excess of 300 000 tons per annum is being progressed, linked to the completion in early 2009 of a major new dam and canal system funded by the EU and the Swaziland Government, which will facilitate expansion of canegrowing in the area. The new area under cane is likely to cover some 5 000 hectares of land in the medium term, with further potential for development available in the longer term. Associated with the factory expansion, plans are underway to increase power generating capacity at Ubombo utilising biomass, in the form of residue leaves and tops from harvested cane, as supplementary fuel for the factory boilers. This will enable the factory and surrounding estates to be self-sufficient in electricity for 48 weeks of the year and also provide the ability to export power into the national grid. Malawi At our operations in Malawi the marginal factory expansion and increase in caneland area at Nchalo was successfully completed prior to the commencement of the new sugar season. Mali The proposed greenfields project in Mali is progressing in pre-project mode. Necessary financial approvals are expected by November 2009 and thereafter cane development will commence in the first half of 2010. Construction and commissioning of a new factory is anticipated by December 2011. The Malian operation will ultimately produce 195 000 tons of sugar and 15 000 kilolitres of ethanol for fuel blending, and generate sufficient electricity for the agricultural and factory operations, with additional capacity to export power into the national grid.

  Above: The Maragra factory will double in capacity to 150 000 tons of sugar per annum over the next three years.		In Swaziland, the completion of the Lubovane Dam (above) under the auspices of the Lower Usuthu Smallholder Irrigation Project will facilitate major expansion of canegrowing in the area.
  As a consequence, the expansion of Ubombo’s productive capacity to in excess of 300 000 tons of sugar per annum is being progressed.		The major expansion of Zambia Sugar was completed as planned on 1 April 2009. In addition, the group has, subject to approval by the Zambia Competition Commission, acquired a majority stake in Nanga Farms PLC, a canegrowing company which currently produces 325 000 tons of cane per annum.

• ILLOVO'S CHANGING AND GROWING FOOTPRINT

  Illovo Sugar's areas of operation are shown in detail on the map above. Recent, current and coming changes are highlighted with black type and black arrows.

• MAJOR DRIVE AIMS TO INCREASE CAPACITY

  Power generation   Overall, the group’s policy is to become self-sufficient in respect of power requirements for its own operations and, where possible, to supply power into the national electricity grids in the various countries in which we operate. Illovo’s factories utilise bagasse to generate sufficient power for ongoing factory operations, while in most countries additional power is produced in order to supply energy to the agricultural operations, particularly irrigation. We continue to progress our bio-mass initiative, as practised at Ubombo, to other parts of the group, with this technology now having been successfully employed at both operations in Malawi.

  At left and right: The unique process of utilising bagasse and biomass as an energy source also results in the group having minimal reliance on fossil fuels, such as coal, for its energy requirements. Coal usage within the Illovo group comprises approximately 8% of total energy usage.

• ILLOVO GREW TENFOLD IN DON'S TIME AS MD

  Don Macleod has retired as managing director of Illovo Sugar Ltd but remains on board as a non-executive director and deputy chairman. Speaking at farewell functions at Kloof and Head Office, Don traced both his own and the group’s progress during his 35 years with the company, nearly 17 of which were as MD. He first joined the sugar industry in 1971 as the industrial affairs/accountant at the SA Sugar Millers “because I felt it was a major industry in Natal”. 18 months later he joined the then old Illovo, which in 1977 was purchased by C G Smith Sugar which in 1994 became Illovo Sugar – “so for the last 35 years I have been an Illovo employee”. Industrial affairs director in 1983 and financial director in 1985, in 1992 he became managing director when “we were faced with the worse drought in a 100 years followed by the second worst in a hundred years”. They took advantage of this by dismantling the Illovo mill to move it to Eston. In 1992 Illovo Sugar Ltd produced 853 000 tons sugar, had 6 860 permanents/4 900 contract employees, turnover was R1,1 billion, operating profit R142,9 million, headline earnings R87 million and the share price 350 cents. “Today when I look at next year’s budget,” Don said, “we have a company which will produce more than 2 million tons sugar, 6,5 million tons cane, furfural and alcohol plants which are double what they were back then and a growing lactulose business. The spread of profits has changed totally with over 85% of operating profit made outside South Africa (80% of headline earnings). Turnover is almost R11 billion, operating profit over R2 billion and headline earnings over R800 million. The current share price is around R27 per share. . . Thus we have grown the company and have plans to continue on that growth path.” Don attributed this exponential growth to various landmark events since 1994, starting with the group’s strategic intent, developed in 1995, when Illovo moved from being a South African company to being an African business focused on sugar and downstream and maximising the return on every stick of cane. It was to be Illovo’s roadmap going forward. The purchase of a controlling stake in Maragra came next, then the second step, which was to close or sell all the periphery businesses Illovo had developed or acquired over time. Then came the major acquisition which changed the group – buying the Lonrho Sugar group. “We acquired assets in South Africa, Swaziland, Malawi and Mauritius. It gave us the required footprint and mass in Africa to change the whole group’s future and in one step obtain people and operations with expertise of operating outside South Africa, which was a massive advantage in progressing our objective.” “We acquired assets in South Africa, Swaziland, Malawi and Mauritius. It gave us the required footprint and mass in Africa to change the whole group’s future . . . ” Further acquisitions followed in Tanzania and Zambia  and, more recently, the Mali project. “Over all this period we have steadily expanded each of our operations, the most significant being the current Zambian expansion.” In addition in 2006 Illovo had a new holding company, ABF, when they acquired 51% of Illovo. “Thus it can be seen that the last 15 years have been exciting and busy . . . our objective of changing our business to be an African company supplying our products around the world from purely a South African operation has certainly been achieved.” Don paid tribute to the efforts of a number of people who have supported or driven the company to its new position, including his colleagues on the Illovo board, as well as the rest of the teams throughout the group – “who have delivered the results” – with a special thank you to the wives who make such a significant impact and contribution to the communities in which we operate – and finally to his own family, “my most enthusiastic support base”, and his late wife Bev, “a very special person who gave me fantastic support in my job but also more importantly in everything I did in life”. He hoped in his new position as deputy chairman, “through my experience and knowledge of the company and the sugar industry in general that I will add value to Illovo going forward”.

  At Don MacLeod’s retirement function held at Illovo Sugar Park, Graham Clark handed over a special memento of appreciation on behalf of all Illovo employees – a model replica of various working parts of a sugar operation, hand-crafted at Sezela. At his formal retirement function hosted by Robbie Williams, chairman of the Illovo board, Don took over the controls of a new mountain bike – another fine hobby for an exercise enthusiast (in between golf, running, walking in the ‘Berg and, and,…)!

• JOHN RUSSELL: 'WHAT AN AMAZING AND EXCITING RACE'

  John Russell has retired as new projects director, having first joined the company in 1978 in corporate finance. At his farewell function, John recalled that it was then a small office with not a single computer, where accounts were taken only to trial balance, everything else was done by hand and the budget/plan was done once and once only. He moved to SASA (SA Sugar Association) in London and later Durban, which he credits with bringing him into contact with the world of sugar – “It is a small world but quite amazing in its togetherness and friendship and I have always enjoyed being part of it.” From the time he joined SASA he has visited 64 countries in the course of work, and commented: “No doubt that sugar gives you go!”  John rejoined Illovo as financial director 16 years ago and says: “What an amazing and exciting race it has been being part of the massive changes that have occurred in the evolution of the group.” He became director of the New Projects department in 2005, a role which suited his love of travel, and adds: “My time at Illovo has been all about people and I have been extraordinarily lucky to have worked with wonderful people all the years at Illovo.”

  John Russell (right) is congratulated by Don MacLeod at their farewell function.

• SENIOR APPOINTMENTS

• FAO CHIEF SEES FOR HIMSELF AT NCHALO

  The Director General of the United Nations Food and Agriculture Organisation (FAO), Dr Jacques Diouf, visited Nchalo Sugar Estate in November to see maize which Illovo had grown for the Malawi government. Illovo had entered into an arrangement with the government to grow 120.4 hectares of maize under irrigation which would later be used to complement food security in the country. After seeing the maize, Dr Diouf told reporters that what was happening at Nchalo Estate demonstrated that the country is capable of producing food not just for itself but for other countries in Africa. “One third of Malawi is covered by water. You should be able to produce food through irrigation. You have the capacity, as has been shown in recent years, that you are able not only to export but also to give food aid to other countries,” he said. Deputy Minister of Agriculture and Food Security, Hon Frank Mwenefumbo, who accompanied Dr Diouf, said the government had asked Illovo to grow the maize in order to demonstrate that it is possible to grow maize through irrigation as long as there is infrastructure like that available at Illovo. He said they had brought Dr Diouf to Illovo to show him that it is possible to grow maize through irrigation as long as there are resources. The minister said the government was intensifying irrigation farming through the greenbelt project.

  Above: FAO’s director general Dr Jacques Diouf admires the maize at Nchalo Estate.	At right: Dr Diouf takes questions from Malawian and foreign journalists during his visit to the maize project.

   

• MARAGRA PLANS TO DOUBLE ITS PRODUCTION

  Maragra is on the expansion path, with plans to double current production of around 75 000 tons of sugar to 150 000 tons over the next three years. In the current life and times of Maragra, following its acquisition by Illovo in 1996 and the extensive rehabilitation of all its field and factory operations which took place thereafter, this is a far cry from the production of 6 000 tons of sugar achieved in its first year of operation in 2000. Underpinning the current expansion project is the development of 4 000 hectares of land to sugarcane agriculture in conjunction with local communities in Chinhanguanine on the East bank of the Inkomati River about 40 kilometres from the factory. The land is ideally suited for development and, being in close proximity to the Inkomati River, its water needs for irrigation are virtually assured. It is envisaged that the joint venture will produce around 400 000 tons of cane per annum which, combined with further cane supplies from the development by local growers of other land closer to the factory, will provide enough cane for Maragra to reach its sugar production targets. In readiness, Phase 1 of the factory expansion has already been completed in the last offcrop period, with the second and final phase to be undertaken at the end of the current milling season. Additionally, Maragra has acquired an option to purchase a 90% shareholding in the Búzi sugar estate situated near Beira, which provides the opportunity to erect a sugar factory in this area in the future.

  Among the items included in Phase 1 of the factory expansion were the refurbishment of an old existing refinery pan, along with two A strike receivers, and the installation of 8 new vacuum pumps. Above left is the new No 8A pan, and above right are the two refurbished A strike receivers. Much of the work concerned was undertaken in-house by Maragra’s own factory staff.
  This picture gives a good indication of the suitability of the land at Chinanaguanine which has been earmarked for development in conjunction with the local communities – flat land, good soils and close to the Inkomati River.

• THE KILOMBERO COMMUNITY TRUST (KCT) TAKES OFF

  The Kilombero Community Trust (KCT) was formed to act as a conduit for external funding to reach the community. To demonstrate Kilombero Sugar’s commitment to the project, 1 200 hectares of land was leased to KCT for sugarcane development and this area has since been developed. The aim of the Trust farm is to generate funds for community development. During the 2008/09 year, the Trust has funded various community activities, including primary, secondary and farm schools. During a visit to Kilosa District, Tanzania’s President Jakaya Mrisho Kikwete congratulated Kilombero for its support of sustainable community development when he performed the official opening of the science laboratory for Ruembe Secondary School, which was constructed and its equipment donated by the Kilombero Community Trust. The President thanked the Kilombero Sugar Company for depicting a true picture of corporate responsibility and corporate citizenship in the community around the mill.

  Above left: Tanzanian President Jakaya Mrisho Kikwete addresses residents of Ruembe Ward after officially inaugurating the new laboratory at Ruembe Secondary School. Above Right: The President tries his hand in the new lab, accompanied by the Regional Commissioner for Morogoro region Said Kalembo and Kilombero GM Don Carter-Brown (right).
  	LEFT: In another KCT initiative, Mohamed Mwisongo, KCT farm manager, hands over books and desks to school teacher Mama Kajange of Mwenge Primary School, Kidatu.

• GOODBYE PAUL, HALLO STEVE!

  The Zambian President Rupiah Banda welcomed Steve Langton as new Zambia Sugar managing director and at the same time bade farewell to former MD Paul de Robillard during a meeting at State House.

  From left are company secretary Lovemore Sievu, Steve Langton, President Banda and Paul de Robillard.

• HISTORIC DAY FOR NAKAMBALA - AND ILLOVO

  Sunday, 24 May 2009 will be remembered as a very important day in the history of Nakambala. In the preceding 24 hours the mill crushed 14 048 tons cane. It is the first time in the history of Nakambala and the Illovo Group that a mill has gone above the 14 000 tons per day mark. The average crush rate for the 24-hour period was 638 tons cane per hour. The factory is designed for 640 tons cane per hour. Although there is much work to do in terms of maintaining the high crush rates, they are making steady progress. Other important milestones were achieved in the week 18-24 May 2009. Posted a new daily sugar packed and bagged record of 1 686 tons sugar per day Posted a new daily sugar handover to Barloworld of 1 703 tons per day Posted a new weekly sugar packed and bagged record of 9 460 tons per week. Two new daily records were set on 27 May 2009.  Agricultural operations delivered a record 8 484 tons cane The factory crushed 14 483 tons. The previous record was the 14 048 tons on 24 May.

• UBOMBO MOVES INTO CANE EXPANSION MODE

  In the 2008/2009 season Ubombo Sugar in Swaziland started a cane expansion programme which increased one of the agriculture division’s sections -  known as Lukhalweni - by an additional 204 hectares. The expansion project has been named Block C. The Block C expansion took away ±50 hectares of the Mhlosinga Nature Reserve, which reserve is part of Ubombo Sugar. It should, however, be noted that the expansion also incorporated an additional 680 hectares into the nature reserve, therefore increasing the nature reserve from 550 hectares to 1 130 hectares. Five centre pivots were installed for irrigation purposes. Each pivot covers an area between 26 to 63 hectares. Planting of sugarcane had already been completed in some parts of the project as early as April this year. Part of the project will supply seed cane to the LUSIP (Lower Usuthu Irrigation Project). A yield of at least 120 tons of cane per hectare is expected in the commercial areas.

  Above left and right: Irrigation efficiency is the key - newly-installed centre pivots at Ubombo’s Block C cane expansion project will improve cane yields.

News - 1st Half 2009

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• CHANGES IN ILLOVO SUGAR’S DIRECTORATE

  In July 2008, Managing Director Don MacLeod announced his decision to retire at the end of the 2008/2009 financial year. However, with his appointment to the new position of Deputy Chairman of the board, Don is going to have a particular involvement in the company’s Africa subsidiaries and in specific projects undertaken by the group. As Chairman Robbie Williams noted at the time: “Don’s vast knowledge of and experience in the Illovo group and the countries within which it operates would be of considerable benefit to the group as a whole, and to me personally as chairman, especially with regard to our growth plans in Africa.” Don’s retirement sees the appointment of Graham Clark to continue the ongoing story of Illovo, which has fast risen from the banks of the Illovo River more than 100 years ago into a global sugar group with extensive African sugar-based agricultural, manufacturing and downstream operations. Says Don: “Graham’s commitment to the Illovo group is significant, and I know that he, with the team, will lead the company to new levels. I am sure that the people in the company will give Graham the support that I have always enjoyed.” John Russell, currently New Projects Director, will also retire at the end of March 2009, after a long period of time in the company which has seen him involved in several parts of the business, most recently heading up Illovo’s new initiatives to expand its African business footprint. These moves have brought about the following changes to the directorate: With Graham working under the new role of Commercial Director until he takes over as MD, Barry Stuart has assumed Graham’s role of Operations Director, with immediate effect. In a new appointment to the board, Larry Riddle, who is currently Country Head of South Africa, has been appointed to take over from Graham (Commercial Director) in April 2009, while David Haworth, currently Country Head of Malawi, has been appointed as Business Development Director, taking over from John Russell. As mentioned by Don, both Larry and David are both well known in the group and will serve the company well in their new positions.

  NON-EXECUTIVE DIRECTOR Also announced was the appointment of Nosipho Molope to the Board of Illovo Sugar as an independent non-executive director. Serving currently as the chief financial officer of the Financial Services Board and also a director of other listed and non-listed companies, Mrs Molope has extensive South African business experience.

• SENIOR APPOINTMENTS

   

• MAJOR GROUP EXPANSION

  Major Group Expansion – Illovo has commenced a major expansion of its productive capacity base, which it is anticipated will result in sugar and own and managed cane production increasing to 2.5 million tons and 8.5 million tons respectively over the next five years, involving its existing operations in Swaziland, Zambia, Mozambique, Tanzania and Malawi, and the development of a new greenfields project in Mali.

  SWAZILAND’S LUSIP PROJECT: THE SLUICE GATES ARE OPENED IT was a moment of great expectation in Swaziland  when the sluice gates were opened and water flowed for the first time into the primary canal, taking life-giving water directly from the Usuthu River and thereby setting in motion the agricultural development of about 12 000 hectares of land under irrigation as part of the Lower Usuthu Smallholder Irrigation Project (LUSIP). With construction of the Lubovane Dam and other project infrastructure now complete, along with the conclusion of many community negotiations and agreements, an initial group of smallholders with about 400 hectares of land has already been issued quota to grow cane which will be delivered to Ubombo mill in the 2010/11 season. Of the total irrigated agricultural development envisaged, a large proportion will be developed to cane and the milling capacity of the Ubombo mill increased commensurately. In the image above, upstream from the canal sluice-gates, this is the point at which water is drawn directly from the Usuthu River for the project.

  THE NAKAMBALA EXPANSION PROJECT ROLLS ON With Phase 1 under the belt, the expansion of the Nakambala factory to 640 tons of cane per hour and the development of an additional 7 500 hectares to irrigated cane are taking centre stage at Zambia sugar as Phase 2 of the massive project rolls on inexorably to next season’s start-up date in April 2009. As a result of the expansion project, sugar production at Nakambala will ultimately increase to approximately 450 000 tons per annum. At full project commissioning, Nakambala will be a ‘power island’, completely self-sufficient in terms of electricity power requirements for its operations. At right, the main canal discharges water into the completed ‘Dam 22’. From here, water is directed via two main primary canals that feed about 95% of the cane planted in the expansion, on the left.

  KILOMBERO’S RUEMBE MILL: EXPANSION BRINGS IMPROVEMENTS IN TANZANIA Significant improvements in plant operations have been seen during the first half of the season at Kilombero’s Ruembe mill (pictured right) following its milling capacity expansion which was completed, under the guidance of the then factory manager Steve Cloete, during the offcrop preceding the 2008/09 season. The cane preparation, juice heating and mud removal stations were also uprated to cater for additional cane throughput from various agricultural initiatives to increase cane production. A further performance improvement is expected with the full impact of the new cane preparation equipment being realised during the wetter summer months of the season.

  MALAWI – GROWING AGAIN! Following the completion of phase one of the milling capacity expansion project at Dwangwa and the increase in cane-growing areas undertaken by both the company and its outgrowers last season, Nchalo is currently in the midst of an expansion programme of its own. The agricultural team is busy with a two-year cane development project, increasing Nchalo’s land under cane by 1 200 hectares, with approximately 700 hectares being completed during the current season, and the remainder in 2009/10. To cater for the additional cane supplies, existing milling capacity at the factory is being maximised, and will then be increased in a marginal expansion completed during the 2008/09 offcrop maintenance period. Focus will then switch back to Dwangwa for the conclusion of its phased factory expansion. This augurs well for the Malawi operation overall which is currently enjoying a very successful season with good agricultural and milling performance resulting in increased sugar production, and with increased domestic and export sales.  The picture above shows the first irrigation of a new centre-pivot field on the Sande Ranch development at Nchalo. In the background (white building) is a pump station.

• IMPORTS ‘STREAM’ IN TO ZAMBIA SUGAR

  The importation into Zambia of materials and equipment required for the massive Zambia Sugar expansion project at Nakambala, from specialised sugar processing vessels to mobile homes, and the increased sugar exports which will soon start making their way down to Beira, have recently focused attention on the two major routes used by transport companies to get their cargoes in and out of that country. And by no means is it all Illovo or expansion project-related – Zambia has recently being enjoying a period of positive economic growth and, as a consequence, imports are streaming in at every border post. At Kazangula on the Botswana border west of Victoria Falls, this involves a ferry ride over the broad width of the mighty Zambezi River (left), and no cargo – it appears – is too big! Landing on the Zambian side, the ferry disgorges its valuable shipment of people, transport vehicles and other cargoes. Further east and north, downstream from the Kariba Dam wall is the Chirundu border post, between Zimbabwe and Zambia. Such has been the increase in traffic over the past few years, travelling both ways, that new border-post offices have been constructed on the Zambian side of the border. Equally, the main transport route to Lusaka, which leaves Chirundu and heads north up a 40-kilometre escarpment of winding, undulating roadway, is also in the process of being rehabilitated and has already resulted in vastly improved logistics operations. THE SUGAR ROUTE SOUTH On the route back home, via Beira, the mission has been to ensure that every returning vehicle is filled to the brim with sugar, destined ultimately for the busy ports of Europe. The map shows the country borders in yellow, roads in white.

• SUPPLIER AWARDS

  ILLOVO BAGS TOP SAB SUPPLIER AWARD! At the South African Breweries gala supplier banquet in Gauteng, Illovo – which supplies all of the sugar requirements of Associated Beverage Industries (an SAB subsidiary) – walked away with top honours, not only winning the Brewing and Process Materials category but also the overall award for ‘Best Supply Partner of the Year’. A delighted marketing trio, with their booty on display, are from left: Mark Setterberg, marketing manager – industrial; Hans Hackmann, general manager marketing; and Naiem Ally, customer support manager. In the face of stiff competition from a host of leading South African companies, well done Illovo, and well done Barloworld, our bulk delivery partners!

  BARLOWORLD – LOGISTICALLY THE BEST BARLOWORLD LOGISTICS AFRICA took centre stage at the Supplier of the Year award held in Mount Edgecombe, winning first prize for great service and impeccable customer care. Handling all our sugar warehousing, logistics and distribution in South Africa, Barloworld is one of Illovo’s largest suppliers. Here, Barloworld GM Ian Milln accepts top honours from Don MacLeod.

• EVERYBODY’S DOING IT! – (CUTTING CANE, OF COURSE)

  A national cane-cutting competition drew eminent people from all quarters of Swazi society to the popular annual event held at Ubombo. Among those who attended were the Minister of Labour and Enterprise, Lutfo Dlamini, a regular participant in this event, Senator Thandi Nxumalo and many prominent business people. From Ubombo, those present included senior managers such as HR manager Jobe Mashwama, senior HR officer Dolly Madau, section managers and many more. The objective is to enhance productivity and neatness in cane-cutting and also to pick the Swaziland team for the international competition in Malelane. The Royal Swaziland Sugar Corporation team (RSSC) was the overall winner and Ubombo’s Josiah Matse won the individual second prize. (Above left) Ubombo’s agric manager Anthony Domleo has a warm welcome for the Minister of Labour and Enterprise, Lutfo Dlamini, who (above middle) lost no time in getting into action. Protective goggles, gloves, boots and jackets are a must in this job, as senior HR officer Dolly Madau shows that women can tackle it too (above right).

• COMMUNITY CARE - REACHING OUT TO THE CHILDREN

  NCHALO’S FEEDING POT SCHEME Nchalo has donated a school feeding pot to Lengwe Primary School, one of five donated to primary schools involved in the World Food Programme aided school feeding programme. HR manager Emmanuel Banda said Illovo had decided to produce the quality stainless steel pots, which were made in the factory’s workshop, and donate them as part of its social responsibility projects. A school representative, Mr Kandiero, expressed his gratitude for the assistance Illovo gives the school which among other things includes provision of housing for teachers and running water for the school. (Above left) Standard 7 pupils at Lengwe School gather round to sing a song, with the other children in the background. (Above right) Nchalo HR manager Emmanuel Banda hands over the mill-built feeding pot to the Lengwe School committee. ESTON RENOVATES ARDEN FARM SCHOOL Illovo's Eston mill has helped create an effective learning environment for children at the Arden Farm School in Mid Illovo - once dilapidated and unsafe, it has been renovated with the help of funds Eston donated. The project was undertaken by Project Build and the end result was heart-warming as the children thanked Illovo (at left) by singing and dancing for HR manager Elias Sibiya at the hand-over ceremony on September 16 which was attended by the mill’s senior management and shop stewards. Eston’s general manager Vis Pillay handed over the keys of the newly-renovated school to its deputy principal, Ms Zondo.   Repainted, repaired, a far cry from its former dilapidated state, the school has become a pleasure for staff and pupils.

• ESTON MTB CHALLENGE KEEPS GROWING

  Recognised already as the country’s biggest one-day ‘MTB’ event, the August 2008 version of this race – which is staged annually in the Eston cane supply area on the doorsteps of Illovo’s Eston sugar mill – pulled in 3 186 riders, representing a 35% growth in numbers compared to 2007. What’s more, riders who took part in the four main events, including the 75km Illovo Marathon, were almost all unanimous that the organisation of the race – from entry to finish line – was, to quote one tired participant, ‘absolutely superb’! How the race has grown, from its initial beginnings as a community event spearheaded by local cane growers and the Eston community at large, with the event now firmly on the calendar of MTB races around the country, enjoying widespread popularity among riders and their families, and national TV coverage to boot! Keeping in the “community spirit”, Illovo sponsored these budding young cyclists from schools around the Eston area – hoping that just perhaps one of them one day may rank up there with the Burry Standers (SA national champion) of this fast-growing sport. And they’re off! With 70kms of offroad cycling to come – up hills, through rivers and mud, down dusty single-track paths – all situated within the green cane of Eston.

News - 4th Quarter 2008

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• ON THE FUTURE EXPANSION FRONT

  In Swaziland, the expansion plans for Ubombo have moved a step closer with good progress having been made with the independent Lower Usuthu Smallholder Irrigation Project (LUSIP). The project involves the establishment of about 12 000 hectares of irrigated agricultural land over a period of six to seven years, a large proportion of which will be developed to cane which will be delivered to the Ubombo factory where our milling capacity is to be increased commensurately.

  While construction of the new Lubovane Dam is shown here as almost complete, with finishing touches having being made to the dam wall during July 2008 (see picture), the impounding of water has commenced. Meanwhile, work is continuing on other infrastructure, including the bulk water feeder system which will deliver water to the edges of new cane field developments.

  The first three grower associations have been granted water permits and authority to grow cane and, as a result, about 500 hectares of irrigated cane is expected to be developed during the coming season, with the first deliveries to the Ubombo factory expected in 2009/10.

• ILLOVO HANDS OVER A HOUSE TO MALAWI’S HEALTH MINISTER

  Illovo Sugar (Malawi) has handed over to the Ministry of Health a house worth two million Kwacha which was built for a medical assistant at Mafale Health Centre in Chikwawa District near Nchalo mill.      Nchalo GM Tom Wormald said the house is one of the social responsibility projects the company has undertaken in consultation with Chikwawa District Assembly, in line with the group’s requirement for all Illovo operations to conduct their business in a manner that will make them welcome and accepted as progressive partners by all the communities in the areas where they operate. Other company social responsibility projects are in education, health, the environment and in funding a wide range of social welfare and community development activities. Minister of Health, the Hon Marjorie Ngaunje, thanked Illovo for constructing the house which she said would ensure good accommodation for medical staff members to enable them to offer high quality services to the sick. “A contribution of this type will go a long way to encourage our health workers to work in a rural setting," she said, adding that the Malawi Government has a programme to build houses with modern facilities for medical staff in the rural areas to match those built in towns and cities. The new house has three bedrooms, a lounge/dining area and attached kitchen. The community contributed sand and water while Illovo assisted with funds of K2 million. Also at the handover ceremony were the deputy Minister of Health, Hon Felton Mulli, Paramount Chief Lundu and other traditional leaders, the District Commissioner and other government officials and members of the community.

  Nchalos's GM Tom Wormald hands over the keys of the medical assistant’s house to Malawi Health Minister Hon Marjorie Ngaunje. Health minister Marjorie Ngaunje also visited the Nchalo factory clinic, where Dr Albert Mumbai (left) explained the services offered by the clinic to Illovo’s employees and their dependants.

• ILLOVO GIVES THE GIFT THAT KEEPS ON GROWING

  Nchalo Estate has donated 5 450 tree seedlings to the Chikwawa community at a function held at the company’s premises as a highlight of the national forestry season which runs from mid December to mid April. Its aim is to plant trees, manage them and protect them to make sure they survive. Village environmental management committees are responsible for raising tree seedling nurseries and planting and managing the trees. Speaking for the community, Paramount Chief Lundu of Traditional Authority Maseya thanked Illovo for its donations of seedlings to the Chikwawa community over the past three years in complementing government efforts in afforestation. Tom Wormald said Illovo was happy to participate in the National Forestry Season to assist in curbing environmental degradation which was being caused by deforestation. Since December 2007 Illovo had planted 40 000 trees within the estate and by mid April it would have planted 22 000 more, making a total of 62 000 trees. Over the years from 2002 to 2007 Illovo has planted trees within the estate and supplied seedlings for local community plantation in the lower Shire valley totalling more than 283 000 trees planted. The representative of the district commissioner for Chikwawa, Lameck Fulukiya, expressed gratitude for the assistance Illovo renders to the Chikwawa District Assembly not only in tree seedlings but also in other developmental efforts in the district. Chikwawa being a flood-prone area, he believed the tree seedlings would go a long way in curbing the floods that hit the area yearly. The four villages benefiting from the seedlings are Kapasule, Sande, Suweri and Lazaro villages.
  Each one carrying tree seedlings, from left are Geoffrey Kanyerere (district forestry officer for Chikwawa), Tom Wormald (Nchalo GM), Paramount Chief Lundu of T/A Maseya, Lameck Fulukiya representing the district commissioner Chikwawa, village headman Nkhwazi and  Emmanuel Banda, Nchalo’s HR manager.

• GIJIMA MAKES CANE LANDS COME TO LIFE

  Work on Umzimkulu’s Gijima project is expected to be completed by December 31, 2008, with 281 ha out of the project total of 463 ha having already been completed by April 2008. This project has been beneficial to the growers who, without the 70% grant funding, would not have been in a financial position to develop their canelands. A tonnage of approximately 12 350 will be harvested in the 2008/09 harvesting season. Once the total area is ready for harvesting, a harvest of 31 000 tons per annum can be expected, which would not have been available without the Gijima project. Gijima KZN is a European Union-funded local economic development programme designed to support provincial, local and district municipalities and private stakeholders in implementing sustainable “pro-poor” activities across the province. At Umzimkulu, retention schemes for ratoon management and re-planting have been instituted which should ensure the sustainability of the crop. Everyone involved with this project has learnt a lot, including the growers. A second Gijima project to plant 441.7 ha for small growers in the small grower areas north of the Umzimkulu river was recently approved. Negotiations are in progress with various financial institutions to secure the 30% grower contribution.

  A field developed by Gijima in the Umzimkulu mill area, with young plant cane in the foreground. Land to be developed, with the Umzimkulu River in the background, gives an idea of the area’s difficult and steep topography.     Bernard Tom (development manager) (left) and Jeremy Naidoo (Gijima administrator) flank the Illovo Gijima sign, with plant cane in the background. Germinating cane planted as part of the Gijima project.

• MARAGRA DAY IS A TIME TO CELEBRATE

  Maragra employees and the community gathered to celebrate Maragra Day on April 12, a day filled with sport and cultural activities. ABOVE LEFT: GM Mike Buchanan (third from right) and António Chemane (warehouse and civils manager, third from left) join in dancing with Maragra’s dancing and singing troupe. Other events in the day’s fun and games included a girls’ bicycle race (ABOVE RIGHT).

• ROYAL PAGEANTRY IN ZAMBIA

  BY the end of March, the Zambezi River flood plain in the western province of Zambia turns into one vast lake that covers everything except several villages that have been built on very high artificial mounds called Mazulu. The rest of the people have to move from the wet unfriendly environment to higher, dry ground.

     
  Life in the villages is now wet and simply unbearable. It is  made worse by snakes, rodents and red ants (called Suluyi), driven by the floods onto the same mounds. The people, together with their livestock and household property, must move to higher dry ground on the edges of the plain.

  First the cattle are moved from the flood area, and then comes the big event – the picturesque move of the Litunga, the king, in his large royal barge called the Nalikwanda.

  The movement of the Nalikwanda, accompanied by a flotilla of hundreds of big and small canoes, from Lealui (Lyaluyi), the king’s summer palace, to Limulunga, the winter palace, some fifteen or so kilometres to the north of Mongu, is called Kuomboka.

  THE word Kuomboka means to get out of water. Though no one knows the date when the first Kuomboka took place, the event has been celebrated for more than a hundred years.

  The Nalikwanda is decorated in its royal colours and a huge replica elephant placed on its roof. It is paddled by more than 100 men. Paddling the Nalikwanda is considered more of an honour than a strenuous exercise, and therefore it is paddled by men who take pride in paddling their king. Among the paddlers are found not only ordinary Lozi men but also those who hold prominent positions in Zambian society - lawyers, doctors, MPs, businessmen and the like.

  A surveillance canoe or the “Mother of boats”, the Natamekwa, heads the procession going ahead of the Nalikwanda. Behind the Nalikwanda are several royal barges each with its special functions and significance. Among them is the queen’s barge, the Mbolyanga, which has a replica of a crested crane adorning the roof.

  The following day, and for several days afterwards, music and dance follow as people continue celebrating the safe arrival of their king to the high dry ground of Limulunga.
  
  

  The king’s barge, the Nalikwanda, casts off and starts its journey. Illovo Sugar is a sponsor of the Kuomboka and its staff enjoy watching the event.

• ALL ABOARD FOR CALANGA BEACH CLEAN-UP

  A calanga Beach cleaning day, involving pupils from the two local schools, was arranged by Maragra’s risk control officer António Matavele. Several dignitaries, including the Manhiça District administrator, the Maputo provincial environmental director and the Maputo education director, attended this outing and spoke on environmental matters. A tree-planting ceremony was performed, with 12 casuarinas from Maragra’s nursery planted. Trees were also planted at both schools. Stationery and caps were distributed among the local school pupils for participating.

• MALAWI LEADS BY EXAMPLE

  Illovo sugar (MALAWI) observed a week of HIV counselling and testing from 3 - 8 December, in addition to participating in the World AIDS Day activities at district level in Chikwawa on December 1. The HIV counselling and testing week was open to employees, their dependants and the surrounding communities. It  ended with an open day at Mwanza township of Nchalo Sugar Estate in Chikwawa. Medical officer for Nchalo Dr Albert Mkumbwa said Illovo conducts its own annual HIV Counselling and Testing week in addition to those it does in conjunction with the Ministry of Health, "because we believe we can act safely and responsibly if we know our HIV status. Knowledge of one's sero status enables a person to take advantage of early treatment opportunities," Dr Mkumbwa said when he conducted the HIV Counselling and Testing for employees at Illovo Head Office in Limbe. Testing is done in line with Illovo's HIV policy, which emphasises strict confidentiality, non discriminatory, voluntary testing, awareness and wellness programme. At the Mwanza township open day function, HR manager Emmanuel Banda said the Illovo main clinic is one of the clinics chosen by Government to administer anti-retroviral therapy. District Commissioner for Chikwawa, Lawford Palani, who was guest of honour at the open day, praised Illovo for its leadership role in the fight against HIV/AIDS in the district, where HIV prevalence and incidence rates have reduced in the past year. He urged other companies as well as NGOs, traditional leaders, religious and family leaders to borrow a leaf from Illovo. Since 2006, more than 2 000 people have undergone HIV counselling and testing at Illovo clinics in Malawi.

  Chikwawa district commissioner Lawford Palani speaks at Illovo’s  open day function at Mwanza which was the culmination of the company’s HIV counselling and testing week.

• POPULAR GOLF EVENTS KEEP KASASA BUZZING

  Golf is a major drawcard at Dwangwa, whose Kasasa Golf Club plays host to a series of popular golf tournaments each year. Not only does everyone enjoy a good time, but the tournaments also serve to cement friendships among the players and the organisations that take part, as well as raising funds for various worthwhile projects. Handicap secretary Kondwani Mphulla supplied details of three such get-togethers: The Illovo (Dwangwa) customers’ day invitation golf tournament – Two one-day tournaments which attracted 30 teams of participants from Blantyre, Lilongwe, Mzuzu, South Africa and the host. Shayona (Akshar Cement) Kasasa golf tournament - Just about everyone seemed to emerge as winners in the annual Shayona sponsored golf tournament held at Kasasa Golf Club. Speaking on behalf of Shayona’s management, Rolland Mwalweni expressed their thanks to Illovo Dwangwa, announced that his company would continue to sponsor golf tournaments at the club and later donated MK20 000 to the golf section to assist in the maintenance of the golf course. Dwangwa mill inter-departmental tournament, where the  administration department emerged as Dwangwa mill’s champions with a narrow 87-86 points win over agriculture, with the factory department third on 75 points.

  Dwangwa's inter-departmental golf tournament winners, administration, (from left) front: Victor Wright, Jeromy Ngolombe, Justin Dzinkambani, Rena Botha and Lusubilo Chakaniza; back: Don Carter-Brown, David Haworth and Debs Haworth.   FROM LEFT: Lusubilo Chakaniza (‘best beginner’), Chaupe Kisebe and Smith Sibale get set for the Shayona event.

• MALAWI SPONSORS EQUESTRIAN VAULTERS

  Equestrian vaulting is the game for this young Malawian development team to whom Illovo Malawi’s GM marketing Rhys Davis (back left) and national sales manager Walter Nyamilandu Manda (back right) handed over track suits, Illovo T-shirts and a donation for their visit to South Africa in March to compete in the Inter-Africa Cup. It is a combination of dance and gymnastics on a moving horse controlled on a long rein as the horse walks, trots and canters in a circle, usually performed to music.

• KILOMBERO MAKES BETTER DRIVERS

  A driving course, complete with an instructor from National Vocation Training  Morogoro, was held at Kilombero’s KI club. It involved all users of motor vehicles and cycles from senior managers to junior staff level and was conducted in accordance with Tanzania’s national safety regulations. Participants posed for this picture at the end of the course.