Hippo lifts Q1 output 22%

0
403
Hippo Valley Estates

BY SHAME MAKOSHORI
HIPPO Valley Estates cane deliveries grew by 22% during the first quarter ended June 30, 2022 after significant improvements in transportation to the mill, the firm said yesterday.

In a trading update, the Zimbabwe Stock Exchange-listed sugar producer said it harvested 347 178 tonnes during the period, compared to 283 499 tonnes harvested during the same period in 2021.

Zimbabwe’s biggest cane producer taps into produce from its own estates in the country’s southern eastern low veld, along with deliveries from small-scale farmers.

Hippo chairman, Canaan Dube said the firm spanned its mill for more hours during the period compared to 2021, giving impetus to improve output.

“Cane deliveries from the company’s plantations (miller-cum-planter) for the quarter ended 30 June 2022, were 22% above same period prior year driven by a combination of increased harvesting targets in line with total crop projections, a more efficient cane haulage system and improved mill uptime,” Dube said.

He said deliveries from private farmers slowed after operations were affected by heavy rainfall in April.

“Cane deliveries from private farmers were below prior year on account of rains received in April 2022 which resulted in the delayed onset of harvesting. While cane deliveries were higher than prior year on account of improved yields for cane harvested, sugar production to date is 4% lower than the same period in prior year largely as a consequence of lower cane quality due to a prolonged wet spell that prevailed in the region. Cane quality is, however, expected to improve into the drier peak sucrose period,” Dube added.

“Hippo’s share of total industry sugar sales volume of 394 000 tonnes for the year ended 31 March 2022 was 53,2%, a rise from 50% during the same period last year. Total industry sugar sales into the domestic market for the year at
356 000 tonnes were 10% higher than prior year, driven by strong domestic demand.

“Industry export sales, however, decreased by 67% to 38 000 tonnes following redirection of supply to the local market in view of the increased demand. Price realisations on the local market also remained firm in current purchasing power terms.”

He said while local market US dollar sales were firm at the beginning of the year, these subsequently slowed down owing to limited availability of foreign currency within the economy.

“Operating and trading conditions are likely to remain challenging in the current milling season, with farmers and millers contending with high cost pressures on account of both local and global inflationary dynamics, exchange rate volatilities, high cost of funding and supply chain bottlenecks, resulting in pricing of local products difficult in the short to medium terms,” he said.

“Procurement strategies for key raw materials have been enhanced and the company anticipates being able to secure the critical inputs required for operations.”

  • Follow us on Twitter @NewsDayZimbabwe