Hippo Valley Estates, one of Zimbabwe's largest sugar producers, has been granted Government approval to develop additional 3 300 hectares under its Project Kilimanjaro which will create over 1 000 new jobs in the Lowveld.
The approval followed negotiations between the company and the Government.
Hippo and Triangle Limited, owned by Tongaat-Hulett, are the country's major sugar producers.
About 165 cane growers will be allocated 20-hectare plots when the land is fully developed.
This will result in 1 500 new jobs being created, the firm said.
"It is envisaged that the same model already applied to the initial 700 hectares of the Kilimanjaro Empowerment Block will be extended to the remaining 3 300 hectares and funding will be sourced from banks through the Lowveld Sugarcane Development Trust," said Hippo chief executive Aiden Mhere.
"Various service providers will partake in the project development of value of about US$25 million," he added.
The initial phase of Project Kilimanjaro, being undertaken by Tongaat-Hulett, the Government, and local banks, saw about 700 hectares of land being developed.
Under the partnership framework, Tongaat is co-managing some under-performing out-grower farms in a bid to boost productivity.
Currently, Hippo and Triangle are providing input and extension support to over 1 000 farmers.
"To date has seen 741 hectares under the co-management arrangement. The company also continues to provide technical services assistance to a number of new sugar cane out-grower development projects for the benefit of local farmers," said Mr Mhere.
Meanwhile, sugar production for this season is projected to remain flat. Research firm IH Securities says a prolonged wet spell will likely cause water logging, which will affect production.
However, the expected rains will boost the security of water for irrigation during the next two seasons, according to the research firm.
"Forecasts for rainfall in 2022/23 season are weighted towards normal to above average downpour increasing irrigation water cover which is currently set to cover two planting seasons easing constraints on production," said IH Securities.
"However, downside from prolonged wet spells include water-logging potentially compromising the improvement in yields.
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"On this backdrop, we expect annual cane production to remain flat at 1 655 tonnes," said IH Securities in Hippo's earnings review.
During the half-year period to September 30, 2022, cane contribution from the company's plantations grew 12 percent year on year aided by improvements in yields.
But deliveries from private farmers underperformed the comparable season by 5 percent as spells of wet weather delayed harvesting.
Export volumes into the east African region increased in the half year to September 2022 as the company took advantage of shortages experienced during that period.
Kenya, a key regional player relaxed its sugar import ban regulations as it sought to cover its shortfall, prompting it to import the commodity from regional trading blocs particularly the Common Market for Eastern and Southern Africa (COMESA).
Exports to Kenya increased to 8 113 tonnes from 5 875 tonnes in 2021.
On the other hand, export sales to Botswana dropped by 23, 35 percent to 7 041 tonnes from 9 186 tonnes due to deferred export shipments at the start of the season during which the higher-yielding domestic market sales were prioritised.
Total sugar industry export sales for the period improved to 35 265 tonnes, a 19, 31 percent growth from 29 558 tonnes in 2021.
