Illovo Sugar Malawi Limited says the opening of the new sugar factory in Salima is affecting Illovo’s operations with some sugar cane growers backtracking on their obligations to supply cane to Illovo, choosing instead to supply the factory in Salima.
Illovo says the situation and lack of proper regulation in the sugar sector pose a threat to the long-term sustainability of their business and has asked government to intervene.
Lal Bachan, Illovo Sugar Dwangwa Estate General Manager, said this on Monday when the Minister of Industry, Trade and Tourism, Joseph Mwanamvekha, toured the Dwangwa Sugar Cooperation, Ethanol Company Limited and Carbon-dioxide Company in Nkhotakota District.
Bachan said that while the Company welcomes the competition, following the opening of Salima Sugar Company, there are some challenges that are affecting the group’s mandate to supply sugar to the people of Malawi.
“The most notable challenge is the decision by many farmers to sell cane to the new factory instead of meeting the obligations they have with their associations to supply cane to us.”
After touring the Illovo, Ethanol Company Limited and the Carbon-dioxide Company, Publicity Secretary in the Ministry of Industry, Trade and Tourism, Kenneth, Cliff Chiunda, applauded the companies for the efforts that they are making in promoting industrialisation in Malawi.
“We are very impressed with the work that these companies are doing here in Malawi. Illovo- Sugar, Ethanol Company Limited and Carbon-dioxide company are the three value chain companies in the sugar production industry and they are helping to create employment as well as bringing in foreign direct investment to Malawi,” said Chiunda.
Lusbila Chakaniza, Ethanol Company Limited Chief Executive Officer, explained that just like any other business, the company has faced various challenges in trying to sustain performance in the volatile macroeconomic environment.
“Ethco has been operating at half its installed capacity, due to inadequate raw materials in the form of molasses. Our business partners, Dwangwa Sugar Corporation, do supply us all the molasses that they produce but the quantities are not enough to have the distillery run throughout the year” said Chakaniza
In response, Chiunda said that the government will work hand in hand with the companies to address the challenges.
“We are also working towards the finalising of the Sugar Bill which will help to regulate the sugar industry.”