Illovo Sugar Malawi plc board of directors had a daunting task explaining high cost of sugar on the local market compared to international prices during the firm’s annual general meeting in Blantyre on Friday.
During the meeting, it transpired that sugar prices on the local market were twice higher than on the international market.
The directors were also quizzed on the rationality of declaring a 50 tambala dividend only when presenting financial report for the year ended August 31 2019.
This was the first time for the firm to declare dividends in four years.
One of the minority shareholders who is also General Secretary of the Minority Shareholders Association of Listed Companies, Frank Harawa, said they expect the board to act on the issues raised.
“The sugar is produced right here in Malawi. It is unfair to sell at a high price to Malawians so they [the board] must consider reducing the prices,” Harawa said.
Illovo Sugar Managing Director, Mark Bainbridge, said the board will look into the issues raised.
“Prices are high on the local market because we try to conform to regional prices but are lower on the international market because we compete with countries that produce excess sugar such as Brazil that dump the product at unreasonable prices just to get rid of their stock.
“On the dividends, we were compelled to just show appreciation to our shareholders for being understanding, but the company was still sailing through difficult times,” he said.
However, Bainbridge said a prospect for sustainable business growth is still there.
The company has posted a 38.7 percent drop in profit to K10 billion compared to K16.4 billion earned a year before.