Zambia Sugar’s financial performance for the six month period up to 28 February 2023 grew it’s total revenue by 5% to k2.35 billion which was largely driven by strong domestic and export sales performance.
Improvement in export revenue was attributed to the depreciation of the Kwacha during the period December 2022 to February 2023. Sales to the export market increased by 16% due to availability of stocks following the slow down in domestic demand.
Speaking during the stakeholder engagement event for Zambia Sugar half year results, Mr. Oswald Magwenzi, Country Managing director for Zambia Sugar said that, “Zambia Sugar continues to hold strong results,and that their fundamentals also remains the same”.
The CEO further stated that Zambia Sugar has had time to find their strategy and core elements to drive the business. Furthermore, he stated that they have had robust internal discussions and have discovered a road map that will take Zambia Sugar to the next level.
One of the key pillars the company was focused on is customer centricity, as they exist to serve their customers and consumers.
In Zambia and in the regional market to which they export their sugar. The main initiative pursued is basically addressing what the market said-they want.
“From a market perspective we’re a growing domestic market which is obviously driven by growth in population, GDP growth and the general Profile of our consumers” he said. In the industrial segments one of the pillarsof the nation is industrialization and from a food perspective industrialization results in more manufactured food, and as more food is manufactured and packaged their products are being used and as a result there has been significant growth between 6%-15%.
Another key strategy for Zambia Sugar is sustainability, he referred to how long Zambia Sugar has been producing sugar and has been sustainable, he said it has been in existence and around for a very long time, in Zambia, it has been in existence for over 50 years whilst in South Africa for over a hundred years. The third pillar he said, is operational excellence and this is by being the very best at what it does. He added that at agricultural level they have to perform them at the highest level, at factory operations to produce best practices that are known for the processes used to produce sugar, there is also logistics operations which also have to be excellent and finally they have sales and marketing operations and they aim at being excellent in all this.
He also mentioned that Zambia Sugar is also part of big groups, Illovo Sugar Africa which is headquarters in Durban, AB Sugar which is headquarters in peterbrav and ABF which is headquarters in London. Hence able to get the best practices and incorporate them in the operational excellence. Currently Zambia Sugar is the lowest cost in operations however continue to look at how to optimize low costs and innovation of best practices and always being a learning organization. Another pillar he put across is advocacy, where he said the sugar industryis distorted as the market is not exactly free, this is because the sugar market is either subsidized or protected by governments.He said if not engaged with the government their own Zambia Sugar market will not grow. Speaking further Mr. Oswald Magwenzi said diversification is another pillar for the Zambia Sugar, which is looked at in two ways, as people think the company only produces one commodity, “we serve industrial segment and the regional market and can export sugar abroad, we are diversified in the sense of the different markets that we serve, we all need sugar in one way or another”, he said. Another way they are diversified is having different products for different markets and that way the revenue streams are diversified. Another level of diversification is non sugar leveling, which tries to focus on products that are very similar in order to exploit synergies and leverage some incompetency’sthat already exist such as bakeries. Zambia Sugar looks at diversifying into other areas, such as adding value to molasses by converting it to ethanol for either fuel or afford alcohol and other byproducts that come from ethanol, one key element he mentioned is diversifying into electricity generation for gaining more revenue, these are the key areas being explored in the future in order to have different revenue streams.
The final pillar, he said, is people capability development, as every business is driven by people, and without people the objectives set forth can not be achieved, he said . Zambia Sugar has a very intensive and elaborate program in place to develop it’s people capability of it’s strategy which is done systematically. And in conclusion he said, all these pillars support their mission which is take safe and high quality food which is abundant and available and affordable for consumers.
