SUGAR’S SWEET SPOT

RCL FOODS’ Sugar business is deeply rooted in South African soil. “A lot of our operations are in rural areas, where we support the livelihoods of over 1 200 small-scale growers,” says Michela Cutts, Managing Director: Sugar.

“We’re often both the hub and the creator of economic activity in these areas. But while we are important to our communities, our communities are just as important to us. Developing local skills is key to us creating sustainable milling and farming operations.”

“The South African Sugar Industry has been facing sustainability challenges for some time,” says Michela. “The significant decrease in area under cane over the past 15 years is one of a number of industry headwinds. Although the industry continues to struggle, both the Department of Agriculture and the Department of Trade and Industry have been very supportive.”

Despite the pressure on the broader industry, RCL FOODS’ Sugar business continues to report a very strong underlying performance

– and we’ve already identified some key opportunities for growth.

“The biggest potential lies in growing our cane supply base,” says Michela. “One way of doing that is to maximise the yields in the areas under cane, getting higher volumes of sucrose per hectare that’s farmed. There’s also a big opportunity within our small-scale farmers, whose yields are typically quite low. We’ve been actively working with them to improve their overall outputs.”

Sugar has a unique dynamic within its supply chain – and that dynamic shapes RCL FOODS’ approach to its partners and suppliers. The sector is also highly regulated, which only makes that relationship closer. “It’s impossible to have one party suffer without the other suffering too,” Michela explains. “We share costs and we share revenues, so we truly are in this together.”

Sustainability is central to delivering on our business Purpose – and it’s why our Sugar business pays close attention to its environmental impact. “We rely on water to irrigate our cane and ensure that we have a crop,” says Michela. “So safeguarding water is incredibly important to us. We’ve upgraded our irrigation systems with variable speed drives to improve our water efficiency, while also reducing our electricity consumption. And on the farming side, we use nitrogen-fixing crops, which help to improve soil health.”

In the cane-rich area of Nkomazi, Mpumalanga, RCL FOODS partners with local communities through three large-scale community-based cane growing joint ventures and 50/50 partnerships with 1 200 local small-scale growers.

THE LATTER INCLUDE:

• Akwandze Agricultural Finance: provides smallscale growers with access to retention savings and unsecured credit at reduced interest rates. Since 2006, Akwandze facilitated over R3 billion reinvestment by growers into their own operations. This underpins the production of two million tons of cane – about 14% of RCL FOODS cane crush volume.
• TSGRO: helps growers to maximise their production and returns through the provision of agronomy services and a bulk water supply service.

“At the end of the day, the sweet spot in our business is our people,” Michela concludes. “We have an incredibly strong employee base that we invest in, and we work very closely with our communities. The Sugar business is a proud supporter of the DO MORE FOUNDATION, and we also support the Star Schools Programme. RCL FOODS is so much more than just a sugar business. We’re deeply engaged with our people.”