CAPITALISING ON TONGAAT HULETT'S
STRATEGIC PLATFORM
- A corporate restructuring was completed in 2007 and
Hulett Aluminium was listed on the JSE and unbundled,
creating two separate, focused listed entities, namely
Tongaat Hulett and Hulamin.
- 25% broad based BEE equity participation has been
introduced into Tongaat Hulett, including strategic
partners, communities surrounding its property
developments, small scale cane grower communities
around its South African sugar mills and BEE management
and employee share ownership schemes.
- The evolving world sugar fundamentals support the
strategy of sugar expansions in low cost regions with
access to attractive markets. Tongaat Hulett’s focus is to
increase sugar production substantially from the level of
1 119 000 tons produced in 2007. Sugar milling capacity
will be in excess of 1 945 000 tons in the 2009/10 season,
including the R1,3 billion Mozambique expansion currently
underway. Further expansion opportunities are being
developed. Tongaat Hulett is well positioned to benefit
from a turnaround in Zimbabwe.
- Opportunities are emerging rapidly for Tongaat Hulett’s
Southern African cane processing operations to increase
realisations from bagasse, molasses and other cane
bio-mass in electricity cogeneration and bio-ethanol
production. In a world that values environmental benefits,
this energy is both renewable and results in reduced carbon
dioxide emissions.
- The structural changes taking place in international
agricultural commodity markets due to demand for biofuels are beginning to result in the improved competitiveness
of local maize farmers and of Tongaat Hulett’s starch
operations, which have additional capacity for local and
export growth.
- There is a worldwide trend towards higher prices for
agricultural products, with resultant opportunities to
increase realisations from raw sugar, refined sugar, ethanol,
fructose and other value added products.
- Property and land developments produced a record
breaking performance in 2007 with operating profit
increasing by 32% to R428 million from sales of 83
developable hectares and with a capital profit of R48
million being realised.
- Tongaat Hulett’s land development processes combined
with urban expansion and developments such as the new
international airport at La Mercy, Tongaat, are increasing
the value of its 14 000 hectares of agricultural land with
development potential.
- Tongaat Hulett was accredited by the National
Empowerment Rating Agency as a Level Three Contributor
in terms of the Department of Trade and Industry BEE
scorecard.
- The lost time injury frequency rate improved to 0,14 in
2007 from 0,19 in 2006 with a reduction of close to 90%
over the past 5 years.
- Tongaat Hulett’s profit from continuing operations grew
by 15 % in 2007 to a record R838 million and the outlook
is for sustained growth.
