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KwaZulu-Natal Business 2020-21 edition

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The 2020/21 edition of KwaZulu-Natal Business is the 12th issue of this unique publication that, since its launch in 2008, has established itself as the premier business and investment guide for the KwaZulu-Natal Province. In addition to the regular articles providing insight into each of the key economic sectors of the province, there is a special feature on the vital role played by ports in the province, from the coal exported from Richards Bay to the new cruise liner terminal addition to the Port of Durban. The 10th anniversary of the 2010 FIFA World Cup coincides with the birthday of the Moses Mabhida Stadium, an iconic design that has become a standard feature on the KwaZulu-Natal sporting and events calendar. Likewise the Durban ICC which continues to burnish the province’s reputation as meetings and convention centre.

OVERVIEW Sugar Tongaat

OVERVIEW Sugar Tongaat Hulett is undergoing massive restructuring. In June 2019 share trading in Tongaat Hulett was suspended. Many accounting irregularities came to light and the upshot was that the company was forced to restructure to pay off huge debts. This comes at a time when the sugar industry is described in Engineering News as being “in the intensive care unit” by the Executive Director of the South African Sugar Association (SASA). Sales into the Southern African Customs Union (SACU) have markedly declined in recent years but under a SACU protocol, Eswatini will sell about 500 000 tons to South Africa, free of any duty. Among the measures taken by Tongaat Hulett are the sale of its starch business to Barloworld (for R5.3-billion) and sale of 5.18% of the company’s shares to Evanstan Investments, which now becomes one of the company’s biggest investors. KwaZulu-Natal is South Africa’s biggest sugar producer. Most of South Africa’s 14 sugar mills are in KwaZulu-Natal, as are the headquarters of the biggest companies. The industry employs 65 000 directly and indirect employment is estimated at 350 000. About 40% of local production is exported. The SACGA represents in the region of 23 000 growers (including 651 small-scale farmers) who produce around 20-million tons of cane. In the 2019/20 season, about two-million tons of saleable sugar was produced. A new industry structure, allowing Online Resources South African Cane Growers’ Association: South African Sugar Association: South African Sugar Technologists Association: Sugar Milling Research Institute: Sector Insight South Africa will receive half-a-million tons of dutyfree Eswatini sugar. for multiple grower associations, has been agreed to by the SACGA, the Department of Trade, Industry and Competition (dtic) and the relevant parliamentary portfolio committee. Neither of the Big Two companies relies exclusively on South African sugar earnings: Tongaat Hulett has a big property portfolio and Illovo draws most of its profit from operations elsewhere in Africa. Diversification is vital for the future of sugar producers and power generation will be an important part of that. Illovo and Tongaat Hulett are the major operators of sugar mills. Other millers are Gledhow, ULC, Umfolozi and Tsb (which has a further two mills in Mpumalanga). Illovo has four mills, three sugarcane estates, four sugar factories, a refinery and three downstream operations that make products such as furfural, furfuryl alcohol, ethyl alcohol and lactulose. The four mills run by Tongaat Hulett are located on the North Coast while the central refinery is in Durban and the animal-feed plant, Voermol, is near Tongaat. The Sugar Terminal at Maydon Wharf, Durban, serves 11 mills and can store more than half-amillion tons of sugar. It also has a molasses mixing plant. ■ KWAZULU-NATAL BUSINESS 2020/21 28

Forestry and paper Mondi and Sappi are global giants. OVERVIEW Sector Insight Mondi’s primary listing has moved to London. The Mondi Group, which has distinct KwaZulu-Natal roots, has grown into an international behemoth with 26 000 employees and operations in more than 30 countries. In 2019 Mondi announced that its primary listing will from now on be in London and the JSE will carry the company’s secondary listing. The company, whose forestry operations are shown here, will spend more than R8-billion on its South African operations in the period to 2023. Mondi’s Merebank Mill produces a range of office paper products including the well-known brand, Mondi Rotatrim. Uncoated woodfree reels are manufactured for the South African and Sub-Saharan African markets. At Richards Bay, eucalyptus fibre is used to make a premiergrade bleached hardwood pulp and a white top kraft linerboard is also produced. Major investments at Richards Bay have not only increased the number of products being made, but improved air quality, reduced water consumption and reduced the amount of solid waste produced on the site. The export of about one-million tons of dissolving wood pulp earned Sappi the winner’s trophy in the “Large Exporter” category at the KZN Exporter of the Year Awards in 2019. Approximately 220 TEU equivalent containers (20-foot containers) of Sappi products pass through the Durban Port every day. The long-running awards ceremony is hosted by the Durban Chamber of Commerce. Sappi was also a winner at the first KwaZulu- Natal Investor Awards, a Trade and Investment KZN (TIKZN) event. On that occasion Sappi won the category “Investor operating in KZN with a Global Footprint.” Sappi has a considerable global footprint:19 production facilities on three continents (of which five are in Southern Africa) and 12 800 employees in over 35 countries. Sappi’s Stanger Mill is situated close to sugar fields from which it takes bagasse (dry sugar cane pulp) for use in its production processes. Typek office paper is made at this mill, which has the capacity to produce 80 000 tons of paper and 30 000 tons of tissue. At the company’s Tugela Mill up to 200 000 tons per annum of containerboard (corrugating medium) can be manufactured from recycled and virgin fibre. It also produces 25 000 tons of lignosulphonate in powder form and 35 000 tons per annum of liquid product. A big focus for Sappi is dissolving wood pulp which is sold as a raw material to converters around the world who produce from it a range of products such as textiles, cellophane wrap and pharmaceuticals. The giant Sappi Saiccor mill 50km south of Durban is the world’s biggest manufacturer of dissolving wood pulp. The mill’s capacity is being increased to 890 000 tons via a multi-year investment project called Project Vulindlela. A total of R7.7-billion has been allocated to the project which will result in more than 2 000 construction jobs and about 120 full-time jobs. 29 KWAZULU-NATAL BUSINESS 2020/21

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