starafrica to focus on cost mitigation

SUGAR producer, starafricacorporation Limited says it will continue to tighten its cost-mitigation measures to improve productivity and operating profitability of both the refinery and the sugar specialties unit.

This comes as the company announced that its products had become uncompetitive following an increase in prices by the sole supplier of raw sugar.

“Post the reporting period, the sole supplier of raw sugar increased its prices significantly, resulting in the company’s products being uncompetitive. The business was already operating under untenable trading conditions that this supplier had imposed. The company has engaged the supplier and the Industry and Commerce ministry, with a view to agreeing to a price, as well as trading conditions that are viable and sustainable,” the company said.

In its Q3 update ended December 31 2022, the company also said power and steam supply constraints were the main causes of the marginally reduced throughput, as they negatively impacted plant uptime during the period.

Consequently, the reduced production led to a 0,2% decrease in sales volumes, compared to prior year.

Notably, the company said the unit completed an overhaul programme of two of its five boilers.

“In addition, the business installed an 11kVA dedicated electricity line, procured a 1 000kVA generator (for controlled plant stoppages, following power cuts) and electrical cables to mitigate power supply challenges,” starafrica revealed.

During the period, Country Choice Foods commissioned an automatic syrup-filling machine, deployed a more robust competitive pricing strategy, and introduced new product lines, including caramel popcorn, baking and cocoa powders.

These initiatives positioned the unit’s products among the most affordable in the market, resulting in notable increases in production and sales volumes of 16% and 8%, respectively, compared to prior year, the sugar producer revealed.

“For the third quarter of the 2022/23 financial year, Goldstar Sugars’ production volumes of granulated white sugar were 0,4% lower than those attained during the prior year comparative period. Power and steam supply constraints were the main causes of the marginally reduced throughput, as they negatively impacted plant uptime,” the company said.-newsday