The South African Sugar Association (SASA) says the industry is trying to become a sugarecane-based one rather than just a sugar industry, a move that requires diversification and producing more product from the sugarcane stalk than sugar only.
SASA national market and trade director Sifiso Mhlaba said the association had done extensive research in this regard, looking at countries that had done so successfully.
“Those countries include Brazil and India. What is very clear is the role of government and the creation of an enabling environment to ensure that the sugar industry can diversify, produce these alternative products and be sustainable,” Mhlaba said.
In a media engagement in Cape Town last week, SASA said the industry has pursued alternate revenue streams, focusing on renewable energy, to move away from only producing sugar and molasses.
This includes decades of research being undertaken to investigate various renewable energy opportunities, such as bio-ethanol for fuel blending, co-generation to export power to the grid, and biogas production for on-farm energy requirements.
SASA said the studies included a cost-benefit analysis of sugarcane co-generated electricity, the development of sugar to bio-ethanol models, and an analysis of biogas
The association said that although the socio-economic and environmental benefits of investigated opportunities were evident, the large capital investment required had been the main prohibiting factor.
“As a result, the industry has been using policy and regulatory means to enable product diversification, including advocacy to government and making submissions on required regulatory changes (such as the Biofuels Regulatory Framework, mandatory blending regulations, and national and municipal integrated resource plans, among others).”
Mhlaba said government had been supporting the industry since phase one of the Sugarcane Master Plan.
He said this had been through the investigation of the different products in pre-feasibility studies.
“We now need to move toward implementation and ensure that we move with our government as partners. We now need them to come on board and support us and create that enabling environment through creation of a blending mandate, the exploration or subsidy or incentives that would enable the industry to go into the millers, and industry to go into these and produce these diversified products,” Mhlaba said.
“It cannot be done without government and that is why the Sugarcane Master Plan is a collaborative effort. We are working together and will continue to walk the path so that we could have a sustainable industry into the future.”
SASA asked the government to keep the current moratorium regarding the HPL levy, commonly known as sugar tax, be kept in place until diversification takes place. It also urged government to ensure comprehensive consultation before any changes were made.
“Any changes to the HPL must consider the outcomes of the SEIAS being undertaken by the Presidency and the results of the dietary intake study. Product diversification is key to industry’s sustainability. The master plan processes around product certainty must be allowed to reach finalisation.”
It said increases in the HPL would undo the strides achieved through phase 1. Increases to the HPL were detrimental to transformation, and there continued to be no credible studies linking the tax to positive public health outcomes.
BUSINESS REPORT