News - 3rd Quarter 2010

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• MOMENTS TO REMEMBER

  
  

  THERE were many ‘stand-out’ moments for Illovo in 2009/10, moments of noteworthy importance, each with its own effects and influences. Among them were ( BELOW) the visit of two heads of state to commission the Zambia Sugar expansion; (ABOVE RIGHT) the significant influence of the 2010 Soccer World Cup on Southern Africa as a whole, and the event’s incorporation into the company’s group-wide Business Understanding Programme; and (ABOVE LEFT) the incorporation of the South African operation into a wholly-owned subsidiary of the group in order to maintain a profitable, stand-alone business. Each of these events, along with many others, is reported on in the June 2010 edition of the Illovo magazine, as captured below.

• NAKAMBALA’S DAY OF THE TWO PRESIDENTS

  
  

  THE memories and images of 9 December 2009 have been indelibly etched in the history of Nakambala Estate. The President of the Republic of South Africa, His Excellency Mr Jacob Gedleyihlekisa Zuma, who was accompanied by his host and counterpart His Excellency President Rupiah Banda of Zambia, visited Nakambala Estate to commission the Nakambala Expansion Project.

  
  

  It was not to be an ordinary day as everything and everyone was prepared for the first ever double Presidential visit to the Estate. The advance parties, protocol teams and the high level of State security from both the Zambian and South African Governments, were visible from the break of dawn. Nothing was being left to chance!

  
  

  Both Illovo MD Graham Clark and Don MacLeod, the latter in his capacity as Chairman of Zambia Sugar and Deputy Chairman of Illovo, arrived at Nakambala around 09h00 after a very early departure from Durban International Airport. On hand to join Graham and Don were fellow directors Fidelis Banda and Ami Mpungwe, who had flown from Tanzania. The local management team led by Steve Langton was for good reason hoping all would go well with these and the day’s other very important guests, not to mention two leading African heads of state!

  
  

  The main event took place at the pristine Nakambala guest house grounds, a valuable property built during the expansion project to accommodate Nakambala’s ongoing stream of internal and external guests. A large white marquee had been erected to seat 150 people. The whole area had since the previous day been cordoned off by the joint Zambia-South African Presidential security. Entrance to the Nakambala guest house was only after sharp scrutiny from men in dark sunglasses and after passing through ‘metal’ detectors.  Security was unprecedented.

  
  

  Outside the Nakambala Guest house was a large contingent of local people who had gathered to welcome the high profile VIPs. The air was pulsating with African drum beats, laughter and singing. This was indeed Nakambala’s day.

  
  

  Protocol and other considerations compelled the two Presidents to come by road to Nakambala Estate, 140km from Lusaka. The motorcade’s departure and expected arrival was as usual shrouded in secrecy for security considerations. Around 11h00 there were ‘suspicious’ movements among the security contingent and taking up of positions. It wasn’t long thereafter that blaring sirens were heard and our Nakambala security at the main gate alerted us that the Presidents had arrived. 

  
  

  And they came in style and pomp. The cavalcade is certainly the longest ever to visit Mazabuka. Although for security reasons the cars in the convoy could not be counted, rumours of vehicles in excess of 80 are not an exaggeration. The two State Presidents, (Zambia and RSA), were now at Nakambala and make no mistake, security level was at maximum!  Paramilitary police with AK47 assault rifles and plain-clothed police were everywhere. The presidential entourage included cabinet ministers, permanent secretaries, directors and senior civil servants from both Zambia and South Africa.  

  
  

  The two Presidents were briefed on the Expansion Project by Don MacLeod and Steve Langton. After the briefing, Steve gave a PowerPoint presentation in the Training Centre conference room highlighting the milestones of the Expansion project. The Presidential entourage then proceeded to tour the factory and packing station. Then came the moment everyone had been waiting for – the unveiling of the commissioning plaque at the entrance to the Zambia Sugar administration building at Nakambala Estate. This was followed by a photo session around the plaque.

  
  

  The Presidential entourage proceeded to Nakambala Guest house for the speeches. Don MacLeod welcomed the visitors and spoke on behalf of Zambia Sugar and the Illovo group. He elaborated on the Expansion Project and thanked the Government of the Republic of Zambia for supporting the Company. He added: “We spent two years completing the project and are very proud of what has been achieved. We now have a world-class factory capable of producing in excess of 450 000 tons of sugar. The total project also included the planting up of more than 3 000 hectares of land and the development of dams, pump-stations and canal infrastructure.  This has resulted in an estate which is now forecast to be able to produce more than 2.150m tons of cane (including Nanga Farms). The agricultural expansion consisted of the construction of 29.7km of canals, 36.8km of pipeline, 265km of roadways and 650km of pivot tracks for 60 new centre pivots (for irrigation). A total 80 000m³ of rock was blasted while more than 1.2 million cubic metres of soil was moved. It should be noted that portions of this infrastructure are also being utilised by our growers. The total project cost was R1.7bn. In addition, I am very pleased that our partners at Nakambala, the outgrowers, have planted the bulk of their portion of the expansion area amounting to 7 000 hectares of land to irrigated cane – a major achievement for which I congratulate them.”

  
  

  His Excellency President Rupiah Banda of Zambia in welcoming the visiting President to deliver his speech said: “I am particularly happy to be here because this expansion was being completed at the peak of the global economic crisis, and therefore safeguarding the livelihood of our people. Nakambala Estate is a hugely important company in the agriculture sector.  Zambia Sugar is the largest source of sugar consumed by the country.”
  
  His Excellency President Zuma said Zambia was a model country for investment, with a regulatory regime attractive to South African companies. President Zuma said: “It is therefore a great honour for me to be able to commission Zambia's biggest agriculture project, this sugar plantation here at Mazabuka, highlighting the R1.7bn investment by Illovo. We know that the current global financial and economic crisis and climate change will impact negatively on our countries. However, we should not allow this to result in further marginalisation of Africa."

  
  

  Both Presidents congratulated the staff of Zambia Sugar for the building and commissioning of the second biggest sugar operation in Africa. The agriculture and milling expansion was completed on schedule in April 2009.

  
  

  Other guests who witnessed the commissioning included traditional and civic leaders, farmers, members of the diplomatic corps (notably the British and South African High commissioners to Zambia), as well as Zambia Sugar’s partners. The event was extensively covered by both local and foreign media. In particular, the event received generous airtime on SABC TV.

  Report by Chisofu Mbula, corporate affairs officer, Zambia Sugar.

  
  

  ILLOVO SUGAR’S MD Graham Clark (second from left) accompanies Presidents Jacob Zuma and Rupiah Banda on their tour of the factory.

  AFTER unveiling the plaque – from left Lovemore Sievu, Graham Clark, President Jacob Zuma, President Rupiah Banda, Steve Langton and Don MacLeod share a happy “mission accomplished” moment.

  UNVEILING the plaque, from left are Chairman of Zambia Sugar and Deputy Chairman of Illovo Sugar Don Macleod, President Rupiah Banda of Zambia and President Jacob Zuma of South Africa.

  
  PRODUCTION RECORD
  
  

  NAKAMBALA’s 2009/10 sugar production of 315 043 tons sugar has been confirmed as a Southern African production record. Considering it was the first year after the expansion, this is a notable achievement.

• THE LONG ROAD TO ‘ISSA’ . . .

  THE first tentative steps to set up the South African business as a wholly-owned subsidiary of the group commenced in earnest almost 15 months ago in line with the group’s overall objective to rationalise and consolidate this operation into a stand-alone, profitable operating entity. What appears on the surface to be a simple transfer of assets and liabilities from the group to a new company, Illovo Sugar (South Africa) Limited (ISSA), belies the considerable amount of time spent by our own company specialists, along with lawyers, financial advisers, property experts, insurers and the like, in getting down into the finer detail. Needless to say the deadline was met and on 1 April 2010 the new company was consummated by way of an official signing session involving the key directors and witnessed by our legal partners from Garlicke & Bousfield (G&B). ABOVE from left at the signing are Wendy Jackson, corporate finance; Tim Desmond (G&B); Dave Howells, MD of ISSA; Jack Wixley (ISSA); Noel Pistorius (G&B); Illovo MD Graham Clark (seated); Andrew Pitts (Illovo property consultant); Gordon Knox (company secretary) and Jenny Kunst (G&B).

• SENIOR APPOINTMENTS

  
  NEW BOARD DIRECTORS
  
  

  TREVOR MUNDAY has been appointed as a non-executive, independent director of Illovo Sugar Ltd. He has an extensive background of wide-ranging roles in financial and commercial management positions both in southern Africa and in Europe, culminating in the position of deputy chief executive of Sasol Ltd. Since his retirement from executive roles at the end of 2006, he has become a non-executive director of various companies, including chairman of Reunert Ltd and a board member of the Absa Group.

  RICHARD PIKE (40), LLB, ACA, ATII, AMCT, has been appointed as a non-executive director, with effect from 28 January 2010. He joined the British Sugar Group in January 2010. Immediately prior to that, he was the group operations & finance director of Bridgemere UK Plc, and previously held senior positions in Manchester Airport Group plc, Scapa Group plc and Pilkington plc.

  
  

   

• MARAGRA: ON TIME AND WITHIN BUDGET

  A very proud day dawned for all at Maragra recently with the commissioning of their factory expansion project at the commencement of the 2010/11 milling season.  Being on time and on budget was crucial from all points of view and Maragra delivered, as promised! The expansion doubles factory milling capacity to 150 000 tons of sugar per annum and the project success, against the background of a third consecutive year of record sugar production, holds much promise for the Mozambique operation. Pictured are the new "C" Continuous Vacuum Pan and Vertical Crystalliser.

   

   

   

  MAPUTO’S GOVERNOR DOES THE HONOURS

  
  THE governor of Maputo province, Her Excellency Mrs Maria Elias Jonas, visited Maragra on 12 May to conduct the official opening of the 2010/11 season at the newly expanded factory (expanded from 160 to 230tch).

   

  
  

  The governor expressed her appreciation of Maragra and sent a message congratulating management on the high standard of the operations she visited, namely the cane fields and the factory. Her father was a cane farmer so she grew up in a sugar environment in Mozambique. She expressed an interest in spending some time on another occasion looking at the entire sugar production process in more detail.

  
  

  THE governor (fifth from left and standing next to GM Mike Buchanan) at the official opening of Maragra’s 2010/11 season. Note the height of the sticks of cane.

• UBOMBO EXPANSION WELL ON ITS WAY

  
  

  PHASE ONE of a major R1.5 billion factory expansion and co-generation project at Ubombo has been completed, with phase two scheduled for completion before the commencement of the 2011/12 season. The project will increase annual factory milling capacity to over 300 000 tons of sugar and significantly raise power generation capacity. The project is linked to the government-sponsored Lower Usuthu Smallholder Irrigation Project (LUSIP) which will facilitate the new development of an initial 5 000 hectares of land to cane under irrigation in the medium-term. Development of the first phase is underway, with planting expected to be completed during the year for harvest in 2011. The co-generation project will enable the factory and agricultural operations to become self-sufficient in electricity consumption and will export surplus power into the national grid. On the Right: The foundations for the new diffuser.

   

  
  
  

  LUSIP’S FIRST CANE PLANTED

  
  

  FOLLOWING the successful completion of the Lubovane dam and a major portion of the primary distribution canal system, the foundation has been laid for the development of smallholder schemes to supply cane for the Ubombo mill expansion.

  
  

  Bush clearing and irrigation infrastructure installation commenced in September 2009 for 880ha from 13 smallholder schemes.

  
  

  An important milestone for the Lower Usuthu Small Holder Irrigation Project (LUSIP) was reached in January 2010 when planting for the 880ha commenced. Excellent crop establishment is being achieved and a foundation for a good crop in 2011 and subsequent seasons is being laid. A total of 5 000ha is earmarked for planting in the medium term.

  
  

  THE cane is planted, irrigation in place, and the field is turning green . . .

  
  
  
  

  WHEN PRINCESS TSANDZILE CAME TO CHECK OUT THE UBOMBO PROJECTS FOR HERSELF

  
  

  UBOMBO’s MD Simon Cleasby paid a courtesy call in late October 2009 to the offices of Swaziland’s Minister of Justice and its Minister of Natural Resources and Energy, when he separately briefed these Ministers about the Ubombo factory expansion and co-generation projects.

  
  

  The Hon Minister of Natural Resources and Energy, Princess Tsandzile, as the Minister responsible for energy issues, had indicated then that she would like to appraise this project. On 11 March, she followed up with a visit to the Ubombo sugar mill, travelling with a 30-plus strong delegation consisting of princesses, princes, honourable senators, chiefs, members of parliament, Principal Secretary – Ministry of Natural Resources and some representatives from the Ministry of Natural Resources and Energy, and a delegation from the Swaziland Electricity Company (SEC) which included the SEC MD, Pius Gumbi.

  
  

  The visit began with a formal programme at the training centre which included managing director Simon Cleasby’s comprehensive presentation on the project. This was followed by a factory visit and ended with a luncheon at the Ubombo Country club.

  
  

  The Minister congratulated the MD on his great presentation. She said that during the initial presentation by the MD at her office, she had wondered whether or not the project would be a reality, and that she was now convinced that indeed it was a reality.

  
  

  She said: “I am sure we are now moving forward! The company has done us proud; it has put us as a country on the world map indeed!” She also applauded that there would be more employment opportunities for the Swazi nation and concluded that indeed “we are all looking towards the commissioning of the project, which is coming so soon!”

  
  

  Overall the Minister and her delegates were impressed with the amount of work that had been done at the factory as far as the project was concerned. As a parting shot she expressed the thought that due to the magnanimity and investment in this project, His Majesty
  King Mswati III would have to be the one who will officially open it.

  
  

  

  
  

  THE ministerial delegation that visited Ubombo Sugar, pictured with some of the Ubombo management team.

   

• AWARDS FOR MEREBANK AND GLENDALE

  
  

  MEREBANK and its sister distillery Glendale have received notable accolades from a variety of sources this year and both staffs are basking in the knowledge of a job well done and recognised.

  
  

  - INDIGO COSMETICS PARTNERSHIP AWARD

  
  

  At a recent function in Cape Town, Indigo Cosmetics presented Illovo Sugar Merebank with a Partnership Award. Indigo, makers of Yardley products, is Merebank’s biggest customer in the personal care sector, ranks among the top five customers in the South African market and has achieved tremendous growth over the years. Merebank’s national sales manager Kevin Kavanagh is pictured (AT RIGHT) at the award ceremony with Indigo’s MD Susan o'Keeffe (left) and inbound logistics manager Carmen Marais. (AT LEFT) Jenna van Greunen (marketing administrator), Malcolm Ayers (operation manager) and Ken Naicker (operations controller) welcomed the Indigo Cosmetics award at Merebank.

  
  
  
  

  In congratulating Merebank staff, Kevin said: “We are the only supplier to Indigo to have supplied a critical primary raw material consistently without stopping their production for a period of over 20 years. Further, there has not been a single product quality issue during this period. This is a fantastic achievement made possible only by the committed attention to detail and communication of the Merebank staff.”

  
  

  - MONDE SELECTION

  
  

  At the annual international Monde Selection, Glendale’s Cape To Rio Cane Spirit was granted the International High Quality Trophy 2010 following three consecutive years of a Grand Gold or Gold Award. Glendale’s manager Isaac Zulu was invited to the closing ceremony in Wiesbaden (Frankfurt) on May 30-31 to receive the trophy.

  
  

  - ‘EXCELLENT SUPPLIER’

  
  One of Merebank’s international customers, Alcosuisse, conducted a supplier evaluation for the year 2009 on quality, quantity and service and they were given an overall rating of 95.71% and placed in the Excellent Supplier category. Shaun Ramsunder, safety, health, environment, risk & quality assurance manager for Illovo Sugar Merebank & Glendale, took pride in conveying the news to staff members, with the words: “Congratulations and well done to all of us.”

• BS ‘TECHNOLOGY CAMPUS’ LAUNCHED

  
  

  TECHNICAL expertise has long been recognised as a “must have” for us to maintain our competitive advantage in the world of sugar. To this end Illovo Sugar has been working with British Sugar over the past year in the development of what is called the British Sugar Technology Campus, scheduled to become operational from July this year. This is a technical training tool which is being implemented across the whole British Sugar Group. 

  
  

  With substantial input from Illovo's Technical Services department, the training modules are designed to meet Illovo's requirements as outlined by our MD Graham Clark, which he says in relation to this initiative are "… to improve technical effectiveness at the operational level while at the same time having effective training in place for our new recruits and refresher requirements".

  
  

  
  Some fast facts:
  

  
  What is the Technology Campus?
  
  The Technology Campus is British Sugar Group’s online training and development system.

  
  How does the Technology Campus work?

  
  Employees can make use of the Technology Campus's resources in one of two ways.
  
  

  - Firstly, those with identified training needs can have access to a suite of online learning modules via the internet as part of their Personal Development Plan. Known as e-learning or internet-enabled learning, employees can work on their own at their own pace. 

  
  

  - Secondly, the learning material can be used in tandem with more traditional “classroom” face-to-face learning methods, such as a group of employees with an instructor. Course material and documents can be used, for example, as hard copy material, or for PowerPoint presentations.

  
  

  Who is the Technology Campus for?
  
  The training material is designed to develop and maintain technical skills for operators, apprentices, trainees, technicians, EITs, engineers and managers.
  
  How does the Technology Campus fit in with Illovo's existing technical training?
  
  The Technology Campus is a valuable supplement to our existing practices, such as on-the-job coaching, TOP training, Shukela Training Centre, etc.

  
  What does the Technology Campus course contents cover?
  
  Approximately 35 hours of modules are available, initially in English, but in due course in all languages of Illovo's countries of operation. Modules cover all the sugar manufacturing processes, such as Cane Preparation, Diffusion, Juice Clarification, Filtration, Evaporation, Crystallisation, Centrifuges, Sugar Conditioning and Refinery Operations. Modules for Agriculture will be developed later.

  
  

  In addition to training material the Technology Campus will grow to become a central repository of intellectual capital such as technical documents, articles, presentations, etc.  There will also be other learning resources such as discussion forums where questions and answers can be posted, Wiki pages, a glossary of terms, Frequently Asked Questions (FAQs) and troubleshooting guides.

  
  What are the benefits of the Technology Campus?
  
  There are many, including:

  
  

  • Employees will have access to the best training material, developed by our own experts.
  • Great flexibility – can be used individually or in a group, at work or at home, 24/7, and can be used together with other training methods.
  • Reduced training time and spend.
  • A valuable addition to our training tools, which Illovo has not taken advantage of in the past.

  
  REPORT BY ROB GOLDMAN, GROUP HRD MANAGER

• MEANWHILE, BACK AT THE MIT PROGRAMME . . .

  
  

  ILLOVO’S highly-regarded Manager-in-Training (MIT) Programme, a strategic tool for equipping the business with high-quality managers for the future, has at any one time approximately 60 graduate trainees participating from a variety of disciplines, for example accounting, engineering and agriculture.

  
  

  Each MIT is assigned a mentor and each is required to attend the one-day Group Mentorship Programme, which is designed to establish common understanding and expectations between the parties, in order to give the best chance for a successful outcome to the Programme.

  
  

  The Mentorship Programme is run in all countries of operation, having taken place this year so far in Zambia, Malawi and South Africa.

  
  

  THE picture shows Dwangwa’s HR manager Jeromy Ngolombe welcoming participants to the Malawi Programme, facilitated earlier this year by group HRD manager Rob Goldman. To Jeromy’s right is Dwangwa’s GM Ken Tembo.

• ON THE BALL - BUP 2010

  
  

  WITH Africa for the first time hosting the FIFA Soccer World Cup, Illovo could not pass the opportunity by of linking this year's Business Understanding Programme (BUP) to that momentous event! 

  
  

  There are of course many parallels between sport and business, between a successful sports team and a business that stays ahead of its competitors.

  
  

  With the theme “Finding the Net”, this year's BUP picks up on a number of these, for example the need for teamwork (being essential for success); playing by the rules to ensure safety and avoid injuries and not letting the team down by being yellow- or red-carded; and delivering results/performing (a team is as good as its results!).

  
  

  

   

   

   

   

   

   

   

   

   

   

  
  
  
  
  
  
  
  
  CAMERA, lights, action! MD Graham Clark in the new Moses Mabhida stadium gets ready for his part in the BUP video.

• FIELD DAY SHOWCASES MAIZE

  
  

  SHIRE Valley Agriculture Development Division in conjunction with Illovo Sugar Malawi organised a Field Day at Nchalo Sugar Estate to showcase what the Ministry of Agriculture and Food Security is doing in partnership with Illovo in the production of maize.

  
  

  The theme was ‘Improving Food Security through sustainable partnerships’ and the event drew together officials from the Ministry of Agriculture, ADMARC, Illovo, private sector organsations, World Food Programme, traditional leaders from Chikhwawa, four honourable Members of Parliament from Chikhwawa
  and the media.

  
  

  In the field the group was briefed by Nchalo’s agric manager Ignatious Majamanda, who said 116.5 hectares had been planted with the maize variety SC 627 and they were expecting 600 metric tons (12 000 x 50kgs bags) to be harvested.

  
  

  Principal Secretary II for the Ministry of Agriculture and guest of honour, Erica Maganga, said this was the fourth year Illovo had grown maize in partnership with the Government in line with the Malawi Growth and Development Strategy whose one key priority area is agriculture and food security. The 12 000 bags of maize would be sold in Chikhwawa and Nsanje districts.