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Illovo rues smuggling

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Local sugar maker Illovo Sugar (Malawi) plc has bemoaned rising cases of sugar smuggling.

The Malawi Stock Exchange-listed company said it was losing billions of Kwacha due to an influx of illegally imported sugar.

Speaking in an interview on the sidelines of a donation of Covid protective equipment to Queen Elizabeth Central Hospital in Blantyre recently, Illovo Sugar Managing Director Lekani Katandula said the situation is worse in districts where the country shares the border with Zambia.

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“We are still hampered by this issue especially from the Zambian side of the border. The Zambian Kwacha has been depreciating more rapidly than the Malawian Kwacha. That leads to imbalances in terms of the comparative prices of all products, including sugar, that are made in Zambia compared to those in Malawi.” he said.

Katandula further said this continues to affect chances of the company increasing its profit margins.

“We continue to see an influx of illegal supply of sugar coming through the borders. This is a setback for Malawi, too, because these products come without any tax benefits for the Malawi Revenue Authority.

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“It sets us back in the sense that it means we are selling less in the domestic market than we would love to. Therefore, that is a drag on our profitability. We would like to see ourselves sell more in the domestic market and increasing our profits more rapidly than is the case now due to the smuggling of our product,” he said.

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