Zimbabwe govt moves to break Tongaat Hulett's monopoly

The Zimbabwean government has announced plans to introduce new players into the sugarcane milling industry to break the monopoly held by Tongaat Hulett Zimbabwe, a move aimed at boosting competition, improving efficiency, and benefiting local farmers and consumers.

Minister of Industry and Commerce, Nqobizitha Mangaliso Ndlovu, made the revelation in response to concerns raised in Parliament by Chiredzi Central MP Ropafadzo Makumire. Makumire had questioned the government on measures being taken to reduce sugarcane production costs amid Tongaat Hulett's ongoing retrenchment of about 1,000 workers, of whom over 100 have already lost their jobs. The MP highlighted cheap sugar imports and high production costs as key challenges contributing to the company's difficulties.

Responding, Minister Ndlovu stated that while he was not fully aware of the specific reasons behind the retrenchments, the issue of cheap sugar imports had not been flagged as a major concern by Tongaat Hulett during his extensive discussions with the company. He noted that Zimbabwe's sugar is among the most expensive on the continent due to several factors, including high production costs.

"Our sugar is the most expensive in the continent," said Ndlovu. "Exporting companies incur costs that reduce their competitiveness. There are several issues to be addressed in the sector. One of the government's interventions is to introduce other players in the milling industry. We cannot continue to rely on a single company."

The Minister also challenged farmers to improve their productivity, highlighting that Zimbabwe's average sugarcane yield currently stands at around 40 tons per hectare - well below the optimal range of 130 to 170 tons. He pointed to low yields as the primary reason for the high cost of sugar production and limited export capacity.

"The sugar industry is vital to our economy, creating employment and supporting downstream industries. However, our farmers need to improve their yields to enhance competitiveness. By doing so, the industry can export larger quantities and reduce sugar prices for local consumers," Ndlovu said. He emphasized that the medium and long-term growth of the sector depends on increasing productivity at the farming level.

To support this goal, the government has designated sugarcane as a strategic crop, signaling increased focus and resources aimed at revitalizing production.

The issue of challenging Tongaat Hulett's dominance was also raised last year by Chiredzi North MP and sugarcane farmer Roy Bhila, who called on banks to partner with farmers in financing the establishment of a new milling facility. Bhila noted that during his tenure as Deputy Minister of Industry and Commerce, he had begun exploring the feasibility of such a project, which he described as affordable if farmers were granted access to appropriate loans.

With government backing and increased competition, the sugarcane milling sector may be poised for transformation that could lower production costs, increase job security, and make Zimbabwean sugar more competitive regionally and internationally.