Zambia Sugar management denies exporting cheaply

Zambia Sugar management denies exporting cheaply
By Joan Chirwa and Mwala Kalaluka
Tuesday June 10, 2008 [04:00]

ZAMBIA Sugar Plc corporate affairs manager Lovemore Sievu has dismissed assertions that the company had been exporting sugar cheaply compared to the commodity’s pricing on the local market. And workers at the company have expressed fear that they might lose their jobs following the pending completion of the expansion of the Zambia Sugar Plc factory in Mazabuka.

Sievu said it was incorrect to say the company had been inflating prices of sugar on the local market while exporting the product cheaply, saying Zambia Sugar Plc did not cover transportation and other export related costs.

Consumers and other stakeholders have argued that Zambia Sugar Plc had been exporting sugar to the Great Lakes Region and the European Union (EU) at much cheaper prices when the same product was expensive on the local markets.

Last week, Zambia Consumer Association (ZACA) alleged that Zambia Sugar had been selling its sugar at around K1,200 per kilogramme on the export markets while overcharging local consumers.

“It cannot be true that Zambia Sugar sells its sugar here at very high prices and exporting at cheaper prices. The fact is that the company does not cover export costs.

The people that buy the sugar are the ones that cater for transportation costs, handling costs, taxes and other costs related to product exports,” Sievu said. “As far as the company is concerned, exported sugar is not cheap at all. The price that we use to export is dependent on the price of the commodity in a country that is buying sugar from us.

For example, if we sell a tonne of sugar at US $365, that does not mean it is the actual price of the commodity when the product arrives in a particular country, say Burundi. Adding up transport costs, taxes and handling fees that the buyer incurs, the actual cost could sometimes come to around US $950 per tone.”

Sievu said the local price of sugar was cost reflective as the company had adopted a standard pricing mechanism for the country.

And workers talked to yesterday said the company management decided to lay off some of them over the last two months in view of the reduced production of sugar, which they attributed to the expansion of the Mazabuka factory.

“There was total confusion in the expansion programme, especially that the old factory was dismantled and was being renovated at the same time that we were constructing the new factory,” the source said. “But now things are normalising.”

The sources said operations in most of the production yards had become mechanised and as such the personnel that were manning the installations would be irrelevant, especially in the Cane Yard.

However, Sievu said on the contrary, more employment opportunities would be created due on the expected bulky increase of the commodity.

“The only ones who could be affected by that are those in marketing but we are not looking forward to laying off any people,” said Sievu.