ActionAid's revelations on Zambia Sugar misleading, says ABF
By Associated British Foods has dismissed ActionAid's asserti
Tue 12 Feb. 2013, 14:50 CAT
Associated British Foods (ABF), a British multinational food processing and retailing company headquartered in London, owns Illovo, Zambia Sugar's parent company.
An investigation by ActionAid found Zambia Sugar to have avoided paying taxes to government enough to put 48,000 children in school a year. ActionAid claimed
Zambia Sugar had paid "virtually no corporate tax in Zambia since 2007".
Investigation findings released on Sunday showed that the company moved millions of kwacha out of Zambia and into tax havens like Mauritius and the Netherlands, reducing its taxable profits.
The company, which generated profits of KR550 million, was accused of siphoning over KR374 million out of Zambia and paying only 0.5 per cent of its pre-tax profits.
The report also accused ABF of "exploiting two separate tax breaks originally intended respectively for domestic Zambian farmers and big foreign investors."
But ABF hit back, saying ActionAid has attempted to use Zambia Sugar's tax affairs to gain publicity at the expense of accuracy.
"Illovo denies emphatically that it is engaged in anything illegal, immoral or in any way designed to reduce the tax rightly payable to the Zambian government," the Group said in a statement posted on its website yesterday.
"We are very proud of Zambia Sugar and the major contribution that it makes to the Zambian economy."
The group stated that despite Illovo's attempts to persuade ActionAid to improve its report by correcting errors and introducing more balance into its analysis, ActionAid decided to publish a "highly inflammatory account of the company's tax position that is incomplete at best and factually wrong in places."
"ActionAid's report alleges that Zambia Sugar pays fees to other parts of the Illovo group in order to reduce tax. This is absolutely not true," the group stated.
"These payments are made in return for the services of real people, doing real jobs, adding real value in Zambia and have nothing to do with tax planning. There are no royalty payments, no franchise agreements. The payments are for export services, third party contractors, and expatriate personnel in Zambia. The payments are charged at cost, and there is no artificial reduction in profit in Zambia Sugar as a result. The payments simply reflect the reality of the group's operations."
In its report, ActionAid stated that Zambia Sugar shifts its profits overseas to Ireland, Mauritius and the Netherlands, adding that it paid its Irish arm US $47.6 million for management fees despite company accounts stating that they have no employees there.
"ActionAid assertions are clearly illogical. There is no tax advantage in moving profits from Zambia where the tax rate is 10 per cent, to other group companies where the income would ultimately be taxed in South Africa at 28 per cent due to specific South African tax rules,"
ABF stated, adding that "ActionAid has clearly decided that its campaign should take priority over the facts."
The group stated that it does not engage in aggressive tax planning, adding that the group had an open and transparent relationship with all the tax authorities in the jurisdictions in which it operates.
The group further detailed taxes it has paid over the last five years and disclosed that it has £150 million to double the size of the sugar mill and improve productivity in Zambia in a move that would see gains benefit the nation for many years to come.
But ActionAid tax campaigner, Chris Jordan said tax was very important for developing countries just like it was for all developed counties around the world hence the emphasis by the charitable organisation.
"Tax pays for teachers, it pays doctors, it pays for road infrastructure investments and yet tax avoidance drains huge amounts of money from those economies," he said during a TV discussion programme on Aljazeera yesterday.
He explained that developing nations' lost revenue kept them dependent on international aid and handouts.
Stephen Barber, a British political economist, said tax avoidance had created an uneven playing field between local traders and multinationals.
Labels: ACTION AID, TAX EVASION, ZAMBIA SUGAR COMPANY
Read more...
Zambia Sugar brands ActionAid report on tax evasion as inaccurate
Time Posted: February 11, 2013 5:53 am
Zambia Sugar has dismissed the report by ActionAid that it was involved in evading tax remittance in Zambia.
Spokesperson Lovemore Sievu said the report by ActionAid was full of inaccuracies, adding that Zambia Sugar that was engaged in anything illegal, immoral or in any way designed to reduce the tax rightly payable to the Zambian government
“We categorically deny the report by ActionAid. The report is absolutely full of inaccuracies. Zambia Sugar meets all its legal obligations including tax,” he said.
Mr Sievu said Zambia Sugar was one of the largest foreign exchange earner and employer in Zambia. He said the company was also the single largest tax payer in the agricultural sector.
“We are very proud of Zambia Sugar and the major contribution that it makes to the Zambian economy,” he said.
Mr Sievu said that despite Illovo’s attempts to persuade ActionAid to improve its report by correcting errors and introducing more balance into its analysis, ActionAid had decided to publish a highly inflammatory account of the company’s tax position that is incomplete at best and factually wrong in places.
Illovo had engaged openly with ActionAid to set out the correct position.
“ActionAid have failed to reflect this in their report. ActionAid has clearly decided that its campaign should take priority over the facts,” he ssaid.
A report released by Action Aid International Zambia revealed that Zambia Sugar PLC, producer of White Spoon Sugar and other household brands, was evading tax remittance in Zambia.
The report which was released in Lusaka yesterday indicated that Zambia Sugar PLC had been avoiding remitting full tax since 2007.
Action Aid Zambia Country Director Pamela Chisanga said the continuous trend by Zambia Sugar and other corporate entities of avoiding paying taxes deprives the poor Zambians from having access to basic necessities.
She added that due to these corporate institutions avoidance to remit revenue to government, the vulnerable Zambians have continued to live in adverse poverty.
“If Zambia is ever going to end its dependence on foreign aid, it must first be able to raise the money needed to provide for its own citizens. Taxes are a sure source of sustainable income. Taxes pay for critical public services like healthcare, good infrastructure, clean water and many other social amenities,” she said.
Ms Chisanga has since called on all Zambians to join hands and take urgent action in ending tax evading among corporate entities in the country.
Labels: ACTIONAID, LOVEMORE SIEVU, TAX EVASION, ZAMBIA SUGAR COMPANY
Read more...
Zambia Sugar workers get salary increments
By Henry Chibulu in Mazabuka
Sun 17 June 2012, 13:20 CAT
ZAMBIA Sugar Company and the National Union of Plantation, Agriculture and Allied Workers (NUPAAW) on Friday finally signed a collective agreement for improved salaries and conditions of services.
This is after six months of protracted negotiations that resulted in three deadlocks that led to the unionised workers going on an illegal strike.
The company has increased salaries for permanent workers by 15 per cent while seasonal workers will now receive 12 per cent salary increment backdated to April 1, 2012.
The lowest seasonal worker who gets K743,000 would now get home with K891,600 while the lowest permanent worker getting K1,300,000 would get home with K1,495,000 and the highest paid permanent worker receiving K2,900,000 would now get K3,335,000.
Education allowance has been increased from the current K793,000 to K1,200,000 per term for permanent workers while leave travel allowance has been adjusted upward from K1,900,000 to K2,090,000.
Company director Ian Parrott signed on behalf of Zambia Sugar Company while NUPAAW general secretary Godwin Mungala signed for the union during a signing ceremony which was witnessed by Information, Broadcasting and Labour Permanent Secretary, Amos Malupenga.
And Parrott expressed happiness that workers had finally returned to work and that production had started after days of non-production due to the industrial unrest.
However, Parrott said management was aggrieved by the conduct of unionised workers whom he said destroyed company property.
Parrott said management would exercise leniency but would review cases of misconduct by unionised employees in three categories.
Mungala said the union was happy that the collective agreement was signed after six months of struggle.
He also defended workers from the management's claims that unionised workers engaged in the burning of sugarcane fields at the company.
He said workers had assured him during the strike action that they remained committed in safeguarding company property and would not engage in the malicious burning of sugarcane.
Mungala also complained that unionised workers are worried that the company might fire them even when they did not take part in the burning of the fields.
And Malupenga said the signing of the agreement by both parties meant that a lot of progress had been achieved by both parties.
He said government was worried with the negative impact of the industrial unrest at the company because Zambia Sugar Company was an important component of the economy.
Labels: NUPAW, SALARIES, ZAMBIA SUGAR COMPANY
Read more...
Zambia Sugar's defiance on fired workers angers Mazabuka PF
By Henry Chibulu in Mazabuka
Sat 10 Mar. 2012, 12:57 CAT
THE Patriotic Front in Mazabuka district is not happy with
Zambia Sugar management for refusing to heed labour deputy minister Rayford Mbulu's directive to immediately reinstate the dismissed general workers.And Mazabuka member of parliament Garry Nkombo says Zambia Sugar management should not use legality to punish the fired employees because management also erred. Nkombo said the company should reinstate the workers unconditionally in order to promote industrial harmony.
Last week, Mbulu gave company management a 24-hour ultimatum to reinstate the casual workers who were protesting against a decision to reduce daily rate from K63,773 to K31,773.
But Patriotic Front district chairperson Gift Hanziba said the stubbornness of the company management was regrettable and would not be entertained by the ruling party.
Hanziba said the company management should be courageous and accept that it made a mistake instead of being defensive on violation of workers' rights.
He complained that the affected casual workers had been warned not to step foot at the company offices by director of human resources, Doreen Kabunda, despite the government ordering her to ensure they reported back to work.
"We wonder who Zambia Sugar Company is going to listen to since the directive by government has been rejected by management. What the company management should appreciate is that you do not antagonise yourselves with government because it's a key stakeholder as far as policy issues are concerned. In fact, most companies respect government directives because it is only sad that Zambia Sugar does not want to abide by the directives," he said.
Hanziba urged the Ministry of Labour to take necessary action against the company for refusing to respect government directives.
Zambia Sugar Corporate Affairs director Lovemore Sievu refused to comment on the matter.
Labels: GARRY NKOMBO, LABOUR, RAYFORD MBULU, ZAMBIA SUGAR COMPANY
Read more...
Zambia Sugar output soars to 385,000 tonnes
By Chiwoyu Sinyangwe in Mazabuka
Mon 08 Aug. 2011, 11:59 CAT
OUTPUT at Zambia Sugar has this year risen to an all-time high of 385,000 tonnes on account of increased capacity utilisation at its new factory and favourable rainfall pattern. In the 2010 season, Zambia Sugar Plc, produced 315,000 tonnes of sugar.
The country’s biggest sugar producer in December 2009 commissioned the K1 trillion Nakambala Sugar Estate Expansion Project, which raised sugar production capacity at its factory from previous 200,000 tonnes to 450,000 tonnes.
According to the annual report seen after the company’s open day for its minority shareholders last Friday, Zambia Sugar Plc, which is 82 per cent owned by Illovo Group, said total cane throughput both from its internal sources and from outgrowers rose by 19 per cent to 3.1 million tonnes.
“Sugar production increased to 385, 000 tonnes from 315, 000 tonnes in the previous season, representing a new sugar production record for Zambia Sugar and the most produced by a single factory in the Illovo Group over the same period,” it said.
“Factory time efficiencies and the recovery of sugar from cane showed considerable improvement compared to the previous season.”
Separately, company secretary Lovemore Sievu, said favourable rainfall patterns this year helped to lift sugar output which, he said, would help improve its sugar export.
“We had good rains this year and the rains did our crop very well and we are looking at a very good year,” said Sievu in an interview.
About 60 per cent of sugar from Nakambala factory goes to the European Union and the Great Lakes region, with each market claiming half of the lot.
Zambia Sugar earnings per share dropped from K16. 09 in 2010 to K4.45 this year, and in tandem, dividends per share dropped from K7.50 to K3.55 during the same period, a move that unsettled some minority shareholders.
Sievu said the company would explain performance of the company during the AGM slated for Lusaka this month to avoid breaching Lusaka Stock Exchange rules on insider trading.
According to the statements of cash flow, Zambia Sugar’s net financing cost for the loans used by among other things the company’s expansion project this year surged K125 billion from K47 billion in 2010.
In April this year, the LuSE-listed Zambia Sugar Plc sealed a US $128 million syndicated term debt to refinance its three-year expansion programme.
Zambia Sugar administers a large estate with more than 2 500 housing units, accommodating over 16, 000 people, and it also provides and supports all municipal type-services, together with schooling and medical services.
During the period 2010/11 period, Zambia Sugar spent K22.7 billion on employee-related social investments.
Labels: ZAMBIA SUGAR COMPANY
Read more...
Govt courts Indian investors in sugar sector
By Chiwoyu Sinyangwe
Thu 12 Aug. 2010, 15:20 CAT
ZAMBIA Sugar Plc has played down the possible competition likely to come from an Indian firm planning to invest in sugar production in Nansanga farm bloc.
The Ministry of Foreign Affairs has announced that Indian commercial farmers, mostly specialising in sugar production, are expected in the country in December to explore prospects of investing in the Nansanga farm bloc.
But in an interview after the company conducted an open day for its shareholders in Mazabuka on Wednesday, Zambia Sugar Plc head of corporate affairs Lovemore Sievu said the country’s biggest sugar producer was too firmly entrenched to fear any possible competition from new entrants into the sector. Sievu said the domestic sugar market was very small and that extra players in the sector were likely to grow the product for export market rather than domestic consumption.
Zambia Sugar Plc currently produces in excess of 400, 000 tonnes of sugar and only 150, 000 is consumed locally, the remainder being exported mainly to the Great Lakes region and European Union market.
“For a long time, we are the only company that has been producing sugar and then we had two companies that came in,” Sievu said. “Zambia Sugar has continued to hold its own. Our brand is strong and Zambia is self-sufficient in sugar production. In fact, we can only sell a third of the sugar that we produce, and if people want to come and produce sugar here, I am sure they have done their market research and due diligence.” Sievu said Zambia Sugar was determined to defend its dominance of the local sugar market. “I guess if someone is coming, probably, they have some other places where they want to market their sugar,” Sievu said. “We are entrenched in Zambia and we have a strong brand. Like in anything, we will defend our market.”
Zambia Sugar Plc is the largest producer of sugar, with Nakambala estate and a mill in Mazabuka giving approximately 89.6 per cent of total production while Consolidated Farming Limited (CF) is second, contributing about 9.8 per cent towards national production at its estate and mill in the Kafue flats in Kafue. Little-known Kalungwishi Estates Limited of Kasama accounts for the remaining 0.60 per cent of the sugar production. And Sievu said Zambia Sugar was on course to raise sugar output to 440, 000 tonnes from the current 315, 000 tonnes after completing its major expansion programme. “The plant has stabilised and is running very well and operating at rated capacity,” said Sievu. “We are confident that this year will be another record year for Zambia Sugar. And we do not expect to have another sugar shortage in the country.”
Labels: FDI, INDIA, LOVEMORE SIEVU, ZAMBIA SUGAR COMPANY
Read more...
Police investigate Zambia Sugar inferno
By Mwala Kalaluka and Glenda Zimba
Sun 20 June 2010, 04:00 CAT
POLICE have launched investigations into the incident where unknown people recently set ablaze three cane fields of Zambia Sugar Plc’s Nakambala Estate in Chula area of Mazabuka.
And chief Mwanachingwala, who had threatened to order his people to torch Zambia Sugar’s cane fields a few weeks ago, yesterday emotively declined to comment on the recent burning of three cane fields at Nakambala Estate.
Meanwhile, the burning of the 31 hectares of Zambia Sugar’s cane fields has taken a twist with more people calling for the immediate arrest of the suspects.
Southern Province Police commanding officer Lemmy Kajoba confirmed in an interview from Livingstone yesterday that Zambia Sugar Plc reported the matter to police three days ago.
“The matter was reported to police two days ago. So police have launched investigations into the matter,” said Kajoba. “Police together with Zambia Sugar Plc security are helping each other to investigate the matter.”
Zambia Sugar Plc corporate affairs manager Lovemore Sievu also confirmed that the company management had left the investigations to its security department.
“We have left that to the security department and they are working with some of their colleagues in police,” said Sievu when asked if the matter had been reported to the law-enforcement agencies. “We will indicate how far they have progressed if there is any progress.”
And when called to comment on the setting ablaze of the Chula sugar cane-fields, which are in the vicinity of his palace, chief Mwanachingwala declined to comment.
“I can’t comment,” said Mwanachingwala before he cut-off the phone line.
Meanwhile, PF leader Michael Sata said it was regrettable that valuable goods worth billions of kwacha were lost in unexplained circumstances.
Sata said the police should find the culprits and have them caged regardless of their status.
Mwanachingwala Royal Establishment spokesperson Mutelo Hamanje also said the police should not take too much time investigating when the prime suspect in the matter was well-known.
Hamanje said the royal family was embarrassed to have a chief who was implicated in the matter as a prime suspect after he threatened to incite his subjects to set ablaze the cane fields if the sugar company did not rescind its decision to do business with the Mazabuka District Business Association.
Hamanje urged police to arrest chief Mwanachingwala immediately.
"In our culture or everywhere else, if you threaten to kill a person and then that person dies, you can’t run away from accusations that you have killed that person. The chief threatened to have the cane fields burnt and the cane fields were burnt, who would not think that it was the chief who sent his people to burn the fields?” asked Hamanje.
Police have also asked Radio Mazabuka to stop playing a recording of chief Mwanachingwala at the time he threatened to direct his subjects to set the cane fields ablaze following the commencement of investigations.
Unknown people in the early hours of Wednesday set on fire three sugar cane fields on a 31 hectare farmland belonging to Zambia sugar at Chula area.
On Tuesday May 25, 2010, The Post ran a story where chief Mwachingwala of the Tonga people in Mazabuka district threatened to burn sugar cane fields belonging to Zambia Sugar Plc if the company did not rescind its decision of dealing with the Mazabuka District Business Association when awarding supply contracts.
And on Thursday, May 27, 2010, Zambia Sugar management officially reported chief Mwanachingwala to Mazabuka police.
But chief government spokesperson Lieutenant General Ronnie Shikapwasha later claimed that chief Mwanachingwala did not issue those threats and was misquoted.
However, The Post reproduced a verbatim of the recording of what chief Mwanachingwala said at a meeting with local businessmen in Mazabuka on Sunday May 23, 2010.
But in an interview, chief government spokesperson Lt Gen Shikapwasha said he did not listen to the verbatim of the meeting but that someone who attended the meeting briefed him on what transpired.
Lt Gen Shikapwasha said he could not believe the verbatim of the meeting because it could easily be doctored.
Asked if he had become the spokesperson for chief Mwanachingwala, Lt Gen Shikapwasha responded: “Government speaks for all those in society.”
Labels: CHIEF MWANACHINGWALA, FRAUD, ZAMBIA SUGAR COMPANY
Read more...
‘Kafue River basin doesn’t pose a threat to Zambia Sugar operations’
By Chiwoyu Sinyangwe
Wed 26 May 2010, 03:40 CAT
ZAMBIA Sugar Plc has said the findings of the recent European Union (EU) - commissioned report revealing strained water resources in Kafue River basin do not pose a threat to its operations.
A recent report commissioned by EU recommended that Zambia Sugar Plc and Consolidated Farming (Kafue Sugar) should not be allowed to undertake any further expansion programmes as this may pose a serious threat on water availability in the Kafue River.
The Kafue River is the country's single most important source of irrigation water for sugar production as it accounts for 99.4 per cent of national sugar output. Illovo Sugar group-owned Zambia Sugar Plc is the largest producer, with Nakambala estate and a mill in Mazabuka with approximately 89.6 per cent of total production while Consolidated Farming Limited (CF) is second, contributing about 9.8 per cent towards national production at its estate and mill in the Kafue flats in Kafue.
Commenting on the findings of the report, Zambia Sugar managing director Steve Langton said the company did not have immediate plans to expand its production lines after completing a major K1 trillion expansion programme which is projected to lift sugar output at the firm to 440,000 tonnes from the current 315,000 tonnes.
“We have no immediate plans to expand further right now so, it doesn’t really necessarily affect us too much but there are a number of reports that often say different things to a large extent all of them done by professionals. It’s difficult to know which one is right,” said Langton.
Currently, Zambia Sugar Plc produces 357,000 tonnes of sugar every year, Consolidated Farming (Kafue Sugar) 23,000 and Kalungwishi Estates Limited produces 1,400 tonnes per year.
According to the Strategic Environmental Assessment (SEA) study of the Sugar Sector in Zambia funded by the EU, the lower Kafue River Basin is becoming water stressed due to the multiple water users and the regulation of flows at the Itezhi-tezhi dam.
The report done by three consultants Juan Palerm, Tonnis Sierevogel and Munguzwe Hichaambwa revealed that there were indications that water rights already allocated to Zesco and both Zambia Sugar and Consolidated Farming might be exceeding future water availability.
Labels: KAFUE, ZAMBIA SUGAR COMPANY
Read more...
Mwanachingwala threatens to burn Zambia Sugar fields
By Staff Reporters
Tue 25 May 2010, 04:00 CAT
CHIEF Mwanachingwala of Mazabuka says he will ask his subjects to set fire to sugarcane fields if Zambia Sugar Company management does not rescind its decision to conduct business with the Mazabuka District Business Association.
And Mazabuka Contractors and Suppliers interim chairperson Brave Mweetwa on Sunday briefly confiscated a recorder belonging to Mazabuka Community Radio station reporter, Joe Kandwe as he recorded the speech by the chief.
Addressing a meeting of contractors and suppliers opposed to the Zambia Sugar Company’s decision to conduct business with the Mazabuka District Business Association, at Mazabuka Golf Club, chief Mwanachingwala warned that he would order his subjects to burn the cane as a way of forcing the company to revert to the old system of awarding contracts to individuals.
‘’I will order my subjects to burn the cane fields if the company does not change its controversial one vendor number policy for the local entrepreneurs. I know my image is dented but I will not stop speaking for the business persons who have rebelled against the association,’’ declared chief Mwanachingwala.
The chief, who was supposed to co-chair the meeting with district commissioner Tyson Hamaamba, bragged of having support from government and also threatened to sort out company corporate affairs manager, Lovemore Sievu until he was removed from his position.
Hamaamba failed to show up despite contractors waiting for him.
Chief Mwanachingwala denounced Sievu, who was not part of the meeting and charged that he would continue lobbying government until Sievu was fired because of his alleged favouratism in the awarding of contracts to foreign companies.
Chief Mwanachingwala said three weeks ago, he under took a trip to South Africa to probe whether the new measures of conducting business had the blessings of Illovo but the investigations proved that it was done by Zambia Sugar Company management.
He also encouraged the contractors and suppliers of goods and services to petition the company and demand the rejection of the company’s decision to conduct business with the Mazabuka District Business Association.
Chief Mwanachingwala also instructed the traders to demand 70 per cent business with the company and that contracts be awarded to individual local traders.
He also telephoned Zambia Sugar Company human resource director, Doreen Kabunda and a marketing director to find out why management was failing to deal with Sievu although the discussion was not shared to the meeting.
Chief Mwanachingwala also warned the reporters from Mazabuka Community Radio station against writing negative stories about the meeting because proceedings were not meant for the consumption of the community.
He openly declared his hatred for the radio station and said he would be comfortable issuing press statements to Chikuni Radio Station to air his grievances about Zambia Sugar Company.
Zambia Sugar Company has maintained that it would only conduct business with Mazabuka District Business Association because the old system was rotten as it was prone to corruption and nepotism particularly that it has been infiltrated by some company officials working in league with the traders to loot the company of its resources.
Dubious cartels have been established at Zambia Sugar where some company employees award contracts to traders after which they are paid huge kick backs for facilitating the contracts.
Company corporate affairs manager, Lovemore Sievu said management would only comment upon studying the chief’s speech but he however maintained the decision by management to conduct business with the association was final and not reversible.
Labels: CHIEF MWANACHINGWALA, MAZABUKA DISTRICT, ZAMBIA SUGAR COMPANY
Read more...
Zambia Sugar hikes prices
By Chiwoyu Sinyangwe
Sat 03 Apr. 2010, 04:01 CAT
Zambia Sugar Plc head of corporate affairs Lovemore Sievu presenting a donation of sugar to first lady Thandiwe Banda at State House recently - Picture by Collins Phiri
ZAMBIA Sugar Plc has upped local sugar prices by 13 per cent owing to the recent increase in fuel prices and inflation rate which accelerated to 10.2 per cent in March from 9.8 per cent in February.
The hike is exclusive to domestic customers as industrial clients benefit from economies of scale and their price structure is via negotiations with concessions embedded in them.
Zambia Sugar head of corporate affairs Lovemore Sievu told The Post that the country’s largest sugar producer had seen its cost of production surge, forcing it to revise upwards the consumer prices for sugar.
Sievu stressed that the price hike, which triggered on April 1, 2010 was meant to preserve the value of the company’s earnings, which had been eroded by the recent movements in the economic fundamentals.
“I can confirm that there has been an increase of 13 per cent for the year,” Sievu said. “This is due to the increase in the packaging cost and to take into account the consumer price index (CPI) which has increased and other costs such as other materials…and of course the fuel costs. But, in real terms, there is no price increase if you factor in the increase in inflation and other costs, we just want to preserve the value of our earnings. We don’t profiteer and our financial statements are available so that people can see…this price is a shelf price.”
Sievu said Zambia Sugar Plc annually revises its prices in line with inflationary trends and other related costs.
He said most sugar cane growers who get more than 50 per cent of the revenues from total sugar sales had also been hurt by inflationary pressures as their costs of doing business such as inputs and husbandry services had surged.
“Our price increase is within the inflationary range and also considering the wage increase for the workers this year,” he said.
Zambia Sugar Plc this year awarded all its unionised employees between 12 to 13 per cent salary increments.
Sievu, however, said the 13 per cent price hike was unique to the local market as sugar exports were subjected to international market dynamics both within the region and the European market.
The local market consumes about 30 per cent of Zambia Sugar’s total output, which currently is estimated to be in excess of 300,000 metric tonnes.
The remainder is exported.
“In Zambia, we apply a national delivered price, meaning as Zambia Sugar, we pay for the actual cost of transportation of sugar to all parts of the country, be it in Kasama or Livingstone,” said Sievu. “But for exports, we do the (FOB) free on board, meaning the buyers have to take care of logistics for the sugar they buy from Mazabuka.”
Last week, Central Statistical Office (CSO) director Efreda Chulu explained that inflation has increased by 0.4 of a percentage point due to the increase in fuel in January.
The Energy Regulation Board (ERB) last January announced a 15 per cent increase in fuel prices, citing the rise in international crude oil prices which doubled since the last increment in December 2008 and the Treasury’s three per cent increment in excise duty on diesel this year.
Labels: INFLATION, SUGAR, ZAMBIA SUGAR COMPANY
Read more...
Mazabuka businessmen to petition Rupiah over Zambia Sugar contracts
By Henry Chibulu in Mazabuka
Tue 09 Feb. 2010, 09:00 CAT
MAZABUKA District Business Association (MDBA) says it will take advantage of President Rupiah Banda's visit to the district this Saturday to help block attempts by some senior managers at Zambia Sugar Company to deny the association contracts.
Association chairperson,
John Kasonde told ZANIS in Mazabuka yesterday that the association was deeply disappointed with
a cartel of senior managers who had vowed not to allow his members benefit from the contracts.
Kasonde said the visit by President Banda, who has been instrumental in ensuring that small-scale contractors equally benefit from the contracts and supply of goods and services, had brought relief especially that serious differences had erupted among senior managers at Zambia Sugar following management’s decision to award contracts to the association.
He said his executive was worried because the managers were now threatening violence against the company corporate affairs manager, Lovemore Sievu whom they had accused of having proposed the blacklisting of certain business tycoons from being awarded contracts.
Why should people threaten to kill Sievu? Sievu is not Zambia Sugar Company. Why can’t they approach the MD because Sievu is just an employee who receives directives from the MD. But I can assure you we are not going to rest until we benefit from the cake which was a preserve of the people in the district, said he.
Kasonde said only President Banda could help resolve the problems at Zambia Sugar Company because people with financial muscles had vowed to deal ruthlessly with anyone hindering their progress.
But Sievu refused to comment on threats on his life by some named businesspersons not happy with the change in the procurement system.
Labels: MAZABUKA DISTRICT, SUGAR, ZAMBIA SUGAR COMPANY
Read more...
Zambia Sugar starts raw sugar exports to Zimbabwe
Written by Chiwoyu Sinyangwe
Wednesday, July 15, 2009 4:21:12 PM
ZAMBIA Sugar Plc has commenced exports of raw sugar to Zimbabwe and the company is this year targeting to export more than 20, 000 metric tonnes, company secretary Lovemore Sievu announced yesterday.
In an interview, Sievu said the development was an indication of the need to nurture local companies.
Sievu said the country's largest sugar producer which is a unit of South Africa's Illovo Sugar’s could increase the export quota by extra 8, 000 metric tonnes as demand option for raw sugar in Zimbabwe was estimated to be at 28, 000 metric tonnes.
“We have now started exporting raw sugar to Zimbabwe and we are getting very good value for this sugar,” said Sievu who is also the company’s head of corporate affairs. “We are looking at exporting more 20, 000 metric tonnes this year.”
Sievu said with the inclusion of Zimbabwe, Zambia Sugar Plc was looking at augmenting the regional market, which comprised Burundi, Rwanda and Democratic Republic of Congo (DRC).
Currently, nations in the Great Lakes region accounted for one-third of Zambia Sugar total export volumes which currently stands at two-thirds of its total sugar output and the European market formed a key destination beyond regional requirements.
Sievu said the recent clinching of the Zimbabwean market manifested the economic sense of supporting local industries.
He however admitted that sugar was a very sensitive subject because it was food.
“About four years ago, some people wanted to push the government to open for sugar imports from Zimbabwe, saying our sugar here was very expensive, by that time, Zambia Sugar position was not as it is today,” Sievu said.
“But what is happening now is that Zambia has started exporting sugar to Zimbabwe and this is proof of the positive results that come when you nurture local and dependable industries and that is the right economic decision.”
Labels: ZAMBIA SUGAR COMPANY, ZIMBABWE
Read more...
ZCC authorises Illovo Sugar to buy Nanga Farms shares
Written by Nchima Nchito Jr
Saturday, June 13, 2009 3:22:05 PM
ZAMBIA Competition Commission (ZCC) board of commissioners has granted a conditional final authorisation for the proposed acquisition of 85.7 per cent shares in Nanga Farms Plc by Illovo Sugar.
ZCC executive director Thula Kaira stated in a press release that the board at a special meeting held on June 10, 2009 determined that the authorisation was the right course to take in the absence of alternative buyers for Nanga Farms.
“While the advantages for Zambia Sugar Plc to control Nanga Farms were self-evident, the board were of the view that the proposed acquisition of 85.73 per cent shares in Nanga Farms Plc to Illovo Sugar (Zambia) Limited/Zambia Sugar Plc was likely to adversely affect competition in the relevant markets for sugar cane and sugar, in which markets Zambia Sugar held dominant positions of market power,” he stated
“The transaction was thus to further enhance Zambia Sugar’s market power through the absolute control of the raw material supply source at Nanga Farms. The Board also noted the absence of import competition for sugar cane and the fact that the withdrawal of Zambeef Plc from Nanga Farms robbed the market of a possible future independent sugar mill competitor to Zambia Sugar Plc, which sugar mill was expected to take advantage of the Nanga Farms sugar cane source.”
Kaira, however, noted that while the commission was alive to the fact that while granting an authorisation would entrench Zambia Sugar Plc’s monopoly control of the sugar industry in Zambia, there had on the other hand not been any alternative offer to the purchase of the shares and the Commission could not unduly stop an exiting shareholder from divesting their interest.
Kaira added that in light of the foregoing, the commission resolved to grant authorisation subject to several conditions.
“Zambia Sugar Plc or any of its affiliate companies shall not enter into any agreements with any domestic or foreign business or government, which agreement prevents, restricts or distorts competition in the sugar or related sectors in Zambia,” he stated “Zambia Sugar Plc or its affiliate companies shall not prevent, restrict or distort other would be investors in the sugar industry from engaging in sugar cane supply contracts with any independent sugar cane growers in Zambia.”
He stated that in addition, Zambia Sugar Plc or its affiliate companies was not expected to engage in abuse of dominant position of market power including, but not limited to, excessive pricing of sugar in the local market.
Kaira stated that Zambia Sugar Plc or its affiliate companies was expected to sign a compliance agreement with ZCC to finalise the authorisation process and show how the company intended to ensure compliance with the conditions of the authorisation.
Labels: ILLOVO SUGAR, NANGA FARMS, THULA KAIRA, ZAMBIA SUGAR COMPANY, ZCC
Read more...
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.
Labels: INFLATION, PRICING, ZAMBIA SUGAR COMPANY
Read more...
Zambia Sugar blames shortage on poor harvest
By Joan Chirwa
Saturday June 07, 2008 [04:00]
GOVERNMENT will not hesitate to take necessary measures once Zambia Sugar fails to satisfy the local market, commerce permanent secretary Davidson Chilipamushi has said. And Zambia Sugar Plc managing director Paul De Robillard has, among other factors, blamed the sugar shortage on the company’s failure to harvest adequate cane last season owing to the above-normal rainfall experienced in most parts of Southern Province.
Speaking in Mazabuka on Thursday when he toured the Nakambala Sugar factory to assess the progress made in production to meet demand for sugar, Chilipamushi said the government would not allow any exports of sugar until such a time when local market had adequate supplies of the commodity.
He was reacting to reports that Zambia Sugar exported close to 3,000 metric tones of sugar to the Great Lakes Region between March and May this year. The most recent export from this year’s production was 30 tonnes of sugar that was sold to Burundi in May.
Chilipamushi earlier indicated that the government would import sugar should the shortage of the commodity persist on the local market.
“It is not government’s intention to interfere in the running of businesses but just to ensure that interests of both consumers and producers are taken care of,” Chilipamushi said.
Zambia Sugar has however maintained that only 30 tones of sugar had been exported to Burundi late last month following a breakdown of the system.
“From this year’s production, we have only exported 30 tonnes to Burundi and that was after a truck slipped through the system and we will stand by that,” said Zambia Sugar Plc’s marketing manager Rebecca Katowa. “We are now putting our major focus on distribution of what we are producing to fill the gap in the market.”
And De Robillard said the heavy rains experienced during the last season greatly affected the company’s production during the last financial year.
“We planned on having 265,000 tonnes but we only managed to produce 234,000 tonnes,” De Robillard said. “The other problem is that the heavy rains affected our expansion programme as we had to delay construction works. Yesterday (Wednesday), tandem two started operating. We are sure that by next week, all lines will be operating and we will be producing close to a thousand tonnes of sugar per day. Our plan for 2008 is to produce 270,000 tonnes of sugar. Since local consumption only constitutes 40 per cent of our production, the surplus will then be exported.”
The shortage of sugar on the local market forced traders to inflate prices to an average of K20,000 per two kilogramme packet.
Labels: DAVIDSON CHILIPAMUSHI, SUGAR CANE, ZAMBIA SUGAR COMPANY
Read more...
Lusaka traders queue for sugar
By Fridah Zinyama
Friday May 30, 2008 [04:00]
SCORES of Lusaka traders yesterday morning queued up at Paza Trading in the city centre to buy sugar, a commodity that is slowly becoming scarce on the market. The shortage of sugar has hit the country and prices have skyrocketed as traders are taking advantage to make exorbitant profits. Currently, a two kilogramme packet of sugar which was pegged at K8,200 is selling for K20,000 whilst a one kilogramme packet, which was selling at about K4,000 is pegged at K10,000.
Most of the traders talked to expressed disappointment with Zambia Sugar Plc over the shortage of the commodity on the market. They wondered why the company could not meet the demand of sugar on the local market.
A check in most shops in the city centre revealed that the retailers did not have the commodity apart from Paza Trading.
Reliable sources have disclosed that Zambia Sugar Company Plc has been transporting sugar into Lusaka from Mazabuka with the intention of exporting it.
The sources said Zambia Sugar intends to export the sugar so that prices remain high even after the company starts production.
However, efforts to get a comment from the company proved futile.
And Musa Biscuits proprietor Yosuf Musa said lack of industrial sugar would force him to shut his factory, as the commodity was very important to its operations.
"I will be forced to shut down the factory and put my workers on forced leave as I do not have sugar to continue production," he said.
Musa explained that he had tried to get an import permit for industrial sugar from the Ministry of Agriculture and Cooperatives but he was told that they could only allow him if the commerce ministry permanent secretary, Davidson Chilipamushi authourised them to do so.
Musa said he would be forced to shut down his company until the situation normalised in the country.
Earlier in the week, Chilipamushi said he had allowed one of the sugar companies to import both domestic and industrial sugar into the country.
And Sugar Producers Association of Zambia (SPAZ) executive secretary, Lewis Nathan in a statement, attributed the sugar shortage on the market to the unprecedented rainfall that the country experienced this year, which had negatively affected the planned sugar production.
"The heavy rains which were a phenomenon experienced throughout the region similarly affected start up dates of sugar producers in the neighbouring countries," he stated.
Nathan stated that Zambia Sugar, the largest producers of sugar in the country, had started its production at the end of April whilst Kalungwishi Estate would start production next month.
Labels: INFLATION, ZAMBIA SUGAR COMPANY
Read more...
Kabanje still source of conflict - Zambia Sugar
By Henry Chibulu in Mazabuka
Monday August 13, 2007 [04:00]
Management at Zambia Sugar Company plc in Mazabuka has said the controversial Kabanje area in chief Mwanachingwala is still a source of conflict between villagers and the company. Zambia Sugar managing director, Paul de Robillard told Mazabuka district commissioner, Misheck Chiinda, that his company was not ready to co-opt the people of Kabanje in an out-grower scheme because the wrangle had not yet been resolved by the government.
De Robillard explained that the Ministry of Lands was still handling the matter.
He also informed Chiinda that his company would be comfortable if justice took its course.
Company corporate affairs manager, Lovemore Sievu also said unless villagers realised the importance of engaging in peaceful dialogue, the company will not be ready to work with them.
Sievu urged the people of Kabanje to take a leaf from residents of Kabesha area in chief Naluama who are crying and pleading for the company to extend the sugarcane expansion programme to their area.
Earlier, Chiinda requested Zambia Sugar management to state its position on the plight of Kabanaje villagers whom he said have expressed interest to grow sugarcane under the sugarcane expansion programme.
He said most villagers had repented and pledged to support the company in its quest to expand sugarcane growing.
Labels: ZAMBIA SUGAR COMPANY
Read more...
Chief storms police station
By Henry Chibulu
Wednesday July 25, 2007 [04:00]
CHIEF Mwanachingwala of Mazabuka yesterday stormed Mazabuka police station and ordered station inspector, Mushewa, to immediately release the 14-year-old orphaned boy arrested for allegedly stealing sugarcane at Zambia Sugar Company Plc. Chief Mwanachingwala told inspector Mushewa and security officers from Zambia Sugar that they should not accept to be used by “white men” to punish starving children collecting left-over canes.
Chief Mwanachingwala described as an act of savagery the arrest of the orphaned boy who was caught chewing a cane and was brutally beaten up and handcuffed as he was taken to the main police station.
He said it was disappointing to note that instead of protecting Zambians, some staff at Zambia Sugar were now teaming up with foreigners to inflict more pain on people collecting left-over canes.
Chief Mwanachingwala said he was particularly bitter with Zambia Sugar’s top management for subjecting Zambians to poor working conditions.
He also urged the government to investigate why a 60-year-old Zambian was retired and replaced by an 80-year-old white man.
Company corporate affairs manager, Lovemore Sievu, refused to comment saying he was attending a Zambia International Business Advisory Council (ZIBAC) meeting which was officiated by President Mwanawasa in Livingstone.
Labels: CHIEFS, ZAMBIA SUGAR COMPANY
Read more...
