RSSC AIMS TO CUT UNIT COST BY 20%

MBABANE – If the trend in production increases for the Royal Swaziland Sugar Corporation (RSSC), the entity will be somewhat insulated from the volatility of the sugar market.

RSSC Group Public Affairs Manager Sifiso Nyembe said the company’s strategy was to decrease its unit cost by 20 per cent by year 2020, through increasing production and improving operational efficiencies.

The group public affairs manager said the record production was a trend that the company was working hard to maintain through implementing its expansion of the Mhlume factory and land under cane.

Suffer

Nyembe said this would help the company suffer less when prices and exchange rates were low, and to perform well when the prices were good.
“We can control production and efficiency but we cannot influence price and exchange rates. With higher production, we can mitigate our losses should the prices be unfavourable or the exchange rate adverse,” Nyembe said.

The record breaking crushing season for RSSC comes at a backdrop of the company having in the last financial year recorded a 23.5 per cent lower income.
It stood at E301.2 million at the end of the 2017/18 financial year.
The Board of Directors Chairperson, Absalom Themba Dlamini, reported that the decline in profitability was due to a number of factors which included a lower world market sugar price.

Contributing

A firmer Lilangeni against major trading currencies and lower Southern African Customs Union (SACU) market prices were also cited as contributing factors to the decline.
“The outlook for 2018/19 sugar prices resulted in a decrease in the fair value of standing cane at March 31, 2018,” said Dlamini.

The managing director (MD) of Tibiyo TakaNgwane explained that despite the drop, the consolidated statement of the financial position of the group showed a strong balance sheet with total assets of E2.9 billion.

Expansion

He stated that phase one of the Integrated Growth Programme (‘IGP’) kicked off with the expansion and modernisation of part of the Mhlume mill. Dlamini disclosed that these works would be completed prior to commencement of the 2018/19 crushing season.
“The financial ratios show a general decline when compared to last year but still show good returns.”

Dlamini also said the 2017/18 season saw RSSC continue to recover from the drought.
Cane crushed at 3.2 million tonnes, was seven per cent higher than cane crushed in the same period last year.

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