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Zambia Sugar opts for regional, local market

ZAMBIA – Zambia Sugar plc has reduced the volumes of sugar exported into the European Union (EU) in preference to the local and regional markets that are offering better prices.

Despite a reduction in sugar production from 380,000 tonnes to 359,000 tonnes as at March 31, 2017, Zambia Sugar’s total revenue grew by 23 percent from over K2 billion in 2016 to K2.4 billion on the back of the new refinery that resulted in the increase of refined sugar production from 44,000 tonnes to 65,000 tonnes.

In a teleconference yesterday from Mazabuka on the final financial results ending March 31, 2017, company managing director Rebecca Katowa said the company is repositioning itself to become a strong player in the region.

“We recorded a drop in sales volumes in the domestic market due to a decline in disposable income levels caused by the challenging consumer market conditions and competitive pressure from illegal sugar imports.

“Due to various reasons such as low cost of production in Europe, the EU market is certainly not in the interest of business for now, so we are looking for markets that are offering better prices especially in the region and our export destinations are Democratic Republic of Congo, Rwanda, Burundi, Kenya and South Africa,” she said.

On concerns about existence of a cartel and price fixing, Ms Katowa said there is no cartel or price fixing in the sugar industry.

With about three active players on the Zambian market, consumers have been making accusations of collusion among the companies to fix prices.

“There is no such a ‘thing’ in Zambia…We have a strong regulator [consumer competition and protection commission] that monitors market trends, also Zambia Sugar is a responsible corporate citizen that abides by the rules and regulations,” she said.

On smuggling, Ms Katowa said illegal imports are negatively affecting operations as well as reducing revenue for Government.

“These are mainly informal because of the numerous porous routes on our borders but we are working with Government to reduce the vice, which becomes rampant [when the Kwacha appreciates] hence the rise in illegal imports of consumer goods,” she said.

June 9, 2017: Daily Mail