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THE SUGAR INDUSTRY AT A GLANCE

THE SUGAR INDUSTRY AT A GLANCE. 26 600 growers 25 200 small scale growers 1 400 commercial growers including 323 black growers 14 sugar mills 90 000 Jobs 2,2 million tons of sugar p/a 12 billion rand annual income Estimated 1 Million livelihoods. COST COMPETIVENESS.

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THE SUGAR INDUSTRY AT A GLANCE

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  1. THE SUGAR INDUSTRY AT A GLANCE • 26 600 growers • 25 200 small scale growers • 1 400 commercial growers • including 323 black growers • 14 sugar mills • 90 000 Jobs • 2,2 million tons of sugar p/a • 12 billion rand annual income • Estimated 1 Million livelihoods

  2. COST COMPETIVENESS Source: LMC International; Worldwide survey of sugar and HFCS Production Costs; 2012 Report

  3. LAND AND AGRARIAN REFORM • An increase from 5% in 1994 to 21% of freehold transferred • Black growers produce 2.5 million tons of cane • Settlement of claims will see 50% of land ownership in hands of black growers • Land reform in sugar leading the way

  4. RENEWABLE ENERGY DEVELOPMENTS FROM SUGARCANE • Globally more sugar industries are transforming to co-produce sugar, ethanol and electricity • World’s two largest cane producers, Brazil and India, have access to sugar, regulated electricity and ethanol markets • South African sugarcane value chain is cost but not revenue competitive

  5. RENEWABLE ENERGY DEVELOPMENTS FROM SUGARCANE • South Africa - urgent need for additional power generation • Renewable energy as electricity and ethanol part of dti sugar industry strategy

  6. SUGAR INDUSTRY COGENERATION VALUE PROPOSITION • All 14 sugar mills match fuel supply with own energy use • 100% cogeneration implemented at all 14 mills • Generic Sugar Industry Proposal • New Power Island • Medium to High pressure power island • Develop additional area under cane • Develop additional fibre sources • Mill Energy Efficiency and Agricultural Yield Improvements • Cogeneration supplies steam to sugar mill • Sugar mill procures electricity from grid • Power station critical to operation of sugar mill • Tariff based on capital return, operating and fuel cost

  7. POTENTIAL IN SUGARCANE AGRICULTURE AND PROCESSING Electricity & Steam • Currently fuel supply to match own energy use • At high efficiency 2 to 7 times more electricity Other Products: Animal feed, paper, chemicals • Future – cellulosic ethanol Tops and leaves not currently utilized, is about equal to sugarcane fibre Fibre Sugarcane 15% Fibre Global trends • Diversify product offering • Improves revenue & cost effectiveness • Brazil leading in ethanol • India leading in electricity 15% Sugar Sugar to market Sugarcane – one of most efficient plants to convert sunlight to energy Season – ethanol could extend existing 8 months Molasses Water free (blend to E10) Water containing (Fuel Flex Vehicles) Sugars to fuel ethanol

  8. SUGAR INDUSTRY COGENERATION VALUE PROPOSITION • Project timing • Extensive economic and social development • Agriculture and rural development • Jobs and skills development • Green – renewable – emission reduction • Industrialisation • Biomass competitive advantage of KZN and southern Mpumalanga • All 14 mills in this area - no RE projects to date in these areas • Sustainable land reform • Socio-economic development build on and expand existing programs and initiatives

  9. SUGAR INDUSTRY COGENERATION VALUE PROPOSITION

  10. SUGAR INDUSTRY COGENERATION VALUE PROPOSITION

  11. Quality and quantity of jobs • 32 786 jobs • Construction – 7 023 • Operation – 437 • Agriculture – 25 326

  12. COMPARATIVE ASSESSMENT ACROSS RENEWABLE TECHNOLOGIES • Consolidated industry impact • Level of development at different stages

  13. WAY FORWARD • Members of the SA sugar have responded to Request for Registration and Information (RFRI) – 12 July • Require an enabling procurement programme fulfilling both the electricity (Department of Energy) and sugar industry (dti) objectives • Contractual agreements • Procurement approach and timing • Process to engage on low hanging fruit projects • Inclusion of biomass cogeneration in long term energy plans e.g. IRP and IEP

  14. Thank You

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