The sugar sector needs to continue to focus on diversification amid several headwinds, according to Dr Muhammad Kadwa, president of the South African Sugar Technologists’ Association (Sasta).
In his Sasta congress opening address this week, Kadwa said some other sugar industries internationally had started on this path and others might follow shortly.
This as the local industry faces a decline in world sugar prices, the health promotion levy/sugar tax with its resultant damage to the industry (with possible increases to the levy), exacerbates the uncertainty of sugar giant Tongaat Hulett’s business rescue process, among other issues.
He said, “We don’t want to be left behind and fortunately much research has already taken place. Many of you may say you have been through more than a decade of hearing about topics of diversification, yet industry actions don’t appear much louder than words… It is possibly an opportune time for our industry considering what may come, and how we can influence the new Government of National Unity (GNU),” he said.
The Sasta Council hosted Professor Narendra Mohan this week, through the Sasta International Visitor Grant. Mohan worked in the Indian sugar industry for four decades.
He has played a pivotal role in the diversification efforts of the Indian sugar industry, which now produces biochemicals, other bioproducts and bioenergy. Among other endeavours, Mohan was also involved in developing technologies for production of graphene oxide, vanillin, cosmetic ingredients, biochar and dietary fibre from bagasse.
He told the local sugar sector that sugarcane was valuable and under-appreciated.
Kadwa said South Africa could learn a lot from Mohan and India’s diversification journey.
“Sugarcane is key in South Africa’s KwaZulu-Natal and Mpumalanga provinces and there is so much that we still can learn about the crop, especially with technological advancements to extract enhanced revenue streams, albeit with sugar still being the mainstay of the industry,” he said.
Sasta said this was important for GNU to be reminded of.
Kadwa said the type of government policies and interventions that assisted the Indian industry to expand in bagasse, molasses, filter cake and the sugar juice itself, along with the out-of-the-box thinking were vital lessons that local industry could take on board.
“Change is needed, and we cannot do the same thing every day and expect different results to help direct our industry in its quest for long-term financial sustainability,” he added.
Advocate Fay Mukaddam, chairperson of South African Sugar Association (Sasa) said following the signing of the Industry Master Plan in November, 2020 the task team on product diversification vigorously pursued the agenda of coming up with clearly defined diversified solutions to ensure the industry’s sustainability.
“This allowed the industry to come together with the government as policy enablers to investigate a variety of diversification opportunities that could prove viable. For years now, the industry has been in pursuit of alternate revenue streams to move away from only producing sugar and molasses.
“This includes conducting decades of research to determine the viability of several diversification opportunities, looking to other sugar-producing countries that have diversified their sugar industries successfully. Therefore, the Industry Master Plan has given us renewed hope that there will be light at the end of the tunnel,” Mukaddam said.
Sasa said the sugar industry had identified at least 10 product diversification opportunities earmarked to be progressed to the next stage of project development.
“Identified opportunities included bioethanol for fuel blending, sustainable aviation fuel, cogeneration, bioplastics such as polylactic acid and polyethylene, as well as food additives. Most diversification opportunities are still at scoping and prefeasibility stages and if deemed viable, they will move to bankable feasibility before commercialisation,” Sasa said.
Diversification opportunities investigated had already been commercialised in other parts of the world such as Brazil and India, hence they have proved to be commercially feasible elsewhere, and only need to be localised in South Africa, the association said.
BUSINESS REPORT