Nicola Jenvey
19 April 2005
Durban — The ancient art of traditional sugar production and the international trend towards natural products may contribute to an agricultural franchise that can boost rural income levels.
At the weekend the Good Sugar Company introduced its natural sugar product - known internationally as jaggery, gur, khandasari or panela - to KwaZulu-Natal supermarket stores as the first phase of a national roll-out.
A "taste it and name it" competition was launched at the same time.
CEO Chris Matthews said sugar was traditionally produced from dried cane juice before vacuum pan boiling and centrifuges were used.
"Natural sugar is to normal refined sugar as wholewheat bread is to refined wheat bread. It thus benefits the health conscious, as it retains the rich goodness of molasses along with vitamins, minerals and protein," he said.
He said the low world sugar price and high haulage costs were making marginal sugar cane areas unfeasible for the traditional refined sugar market. This required adding value at source to bolster profitability, cementing the development of small natural sugar production factories.
The company aimed to franchise the factories and natural sugar production in rural areas, initially in SA with later expansion in southern Africa. Prefabricated factories can be erected within a week and farming requires only 150ha of cane annually for viability. Large-scale mills require about 12000ha.
Matthews envisioned a franchisee financing model in which Good Sugar held a 30% stake, commercial farmers 20% and small growers the balance.
In a period of about five years, Good Sugar would sell 25% of its stake to the emerging farmers, boosting the scheme's black economic empowerment. Financing would be secured via the Land Bank and Ithala, KwaZulu-Natal's development corporation, which already owns a 27% stake in Good Sugar.
Matthews said the move would complement the sugar industry, as the 10000 tons of natural sugar planned for 2008 only accounted for 0,3% of SA's total sugar consumption.
Good Sugar was formed last June through private investment and includes 35% black economic empowerment equity investment. Founders Matthews and George O'Reilly have extensive experience in the industry.
Matthews has been involved in sugar cane developments for 20 years in eight southern and central African countries, and as Agricane chairman has worked with small-grower and commercial sugar concerns throughout the continent.
O'Reilly's background is in senior management in the regional sugar industry.
Be the first to Write a Comment!
Copyright © 2005 Business Day. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
