Govt issues Hippo Valley five 99-year leases

THE Government has issued a 99-year lease on five blocks of 3 804 hectares to Hippo Valley Estates Limited while the land title for the remaining three lease blocks with a combined 20 175ha will be granted in due course.

This comes after Hippo Valley, which is based in the Lowveld, was earlier assured that a 99-year lease would be granted for land covering 23 979ha.

In a statement of financial results for the year ended March 31, 2023, Hippo Valley said engagements with the Ministry of Lands, Agriculture, Fisheries, Water and Rural Development regarding the issuance of 99-year leases were ongoing.

“A total of five leases (amounting to 3 804ha) with respect to Hippo Valley North have so far been issued, with the balance of three lease blocks (amounting 20 175ha) still to be issued.

“Encouraging assurances have been received from the ministry that the remaining leases will be issued in due course and that recommended changes to the wording of the lease documents are being finalised by the Attorney General’s Office,” said the company.

Hippo Valley said planting had been completed on the 700ha land allocated under the Kilimanjaro sugarcane project to new farmers in the Lowveld as part of an empowerment initiative.

Hippo Valley in partnership with Triangle Limited, a unit of Tongaat Hulett Group, continues to work with the Government and various financial institutions to progress the implementation of Project Kilimanjaro, a 4 000ha sugarcane development.

Similarly, Hippo is 50 percent owned by the South African raw sugar production giant.

“An additional 138ha was planted to complete the 700ha Kilimanjaro empowerment block.

“The Government in liaison with THZ, has set up the Project Kilimanjaro Joint Steering Committee to oversee the development of the balance of the 3 300ha, for the benefit of new farmers being identified by the Government,” said Hippo Valley.

In 2021, a total of 700ha were set aside and allocated to new farmers by the Government as part of an empowerment initiative by Triangle and Hippo Valley.

It is expected that the completion of Kilimanjaro and other projects would significantly increase sugar output to meet increasing local demand on the back of the growing population and recovery of the beverages industry with surplus for export.

During the financial year under review, cane deliveries from the company’s own plantations (miller-cum-planter) were 13 percent above the prior year.

“The growth was driven by a 6 percent improvement in yields to 97 98 tonnes cane per hectare compared to 2022 figure of 92,23 in response to improved control of yellow sugarcane aphid infestations through aerial spraying, as well as an increased area of cane harvested compared to the prior year,” said the company.

Private farmer cane deliveries contributed 42 percent of the total cane supply, and were 2 percent below prior year having achieved yields of 71,85 tonnes cane per ha.

In November 2022, one of the company’s two production lines suffered a major breakdown that resulted in it being inoperative for the balance of the season.

Consequently, the milling season was extended to 29 December 2022 to accommodate the reduced production capacity, while 27 001 tonnes of cane had to be diverted to the Triangle sugar mill for crushing.

“Repair work was satisfactorily carried out on that line which has since been reopened for the 2023/24 milling season,” said Hippo Valley.

In the year under review, sugar produced by the company decreased by 1 809 tonnes notwithstanding that an additional 48 189 tonnes of cane was delivered to the mill for crushing.

“Ordinarily, this additional volume of cane would have increased sugar production by approximately 6 000 tonnes.

“The decrease was occasioned by lower cane quality attributable to prolonged wet weather and significant rainfall received at both the onset and end of the season.

“Rainfall hinders both the harvesting and hauling of cane to the mills resulting in the cane remaining in the fields for extended periods and leading to reduced sugar content while posing difficulties in achieving efficient milling recoveries,” said Hippo Valley.

The off-crop maintenance programme which encompasses annual maintenance, including repositioning the mill for improved efficiencies, was successfully completed and the mill commenced crushing for the 2023/24 season in April 2023 as planned.

Hippo Valley’s total industry sugar sales volume of 381 820 tonnes (2022: 394 000 tonnes) was 52,25 percent (2022: 53,2 percent).

Total industry sugar sales volume into the domestic market for the year, at 338 059 tonnes (2022: 356 253 tonnes) was five percent below prior year as a result of competition from low-cost imports.

Industry export sales, however, increased by 15 percent to 43 760 tonnes (2022: 38 000 tonnes) following an improvement of export volumes to the United States of America to 17 751 tonnes in 2023 compared to 13 087 tonnes in 2022.-herald