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

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COST COMPETIVENESS

Rank Total F.O.B. Stowed Costs

1 Nicaragua2 Guatemala3 Thailand4 Brazil (C.S.)5 Colombia6 Honduras7 El Salvador8 South Africa9 Zimbabwe10 Swaziland

Rank Total Ex-Factory Costs

1 Nicaragua 8 Zambia

2 Guatemala 9 Swaziland

3 Brazil (C.S.) 10 Honduras

4 Colombia 11 El Salvador

5 Malawi 12 Bolivia

6 Thailand 13 South Africa

7 Zimbabwe 14 Sudan

Source: LMC International; Worldwide survey of sugar and HFCS Production Costs; 2012 Report

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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

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

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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

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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

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Global trends• Diversify product offering• Improves revenue & cost

effectiveness• Brazil leading in ethanol• India leading in electricity

Electricity & Steam• Currently fuel supply to match

own energy use• At high efficiency 2 to 7 times

more electricityOther Products: Animal feed, paper, chemicals

Future – cellulosic ethanol

15% Fibre

15% Sugar

Tops and leavesnot currently utilized, is

about equal to sugarcane fibre

Fibre

Sugar to market

Sugars to fuel ethanol

Water free (blend to E10)

Water containing (Fuel Flex Vehicles)

Sugarcane – one of most efficient plants to convert sunlight to energy

Season – ethanol could extend existing 8 months

Sugarcane

Molasses

POTENTIAL IN SUGARCANE AGRICULTURE AND PROCESSING

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SUGAR INDUSTRY COGENERATION

VALUE PROPOSITION

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SUGAR INDUSTRY COGENERATION VALUE PROPOSITION

SUGAR INDUSTRY COGENERATION VALUE PROPOSITION

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Quality and quantity of jobs

32 786 jobs

• Construction – 7 023

• Operation – 437

• Agriculture – 25 326

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COMPARATIVE ASSESSMENT ACROSS RENEWABLE TECHNOLOGIES

TECHNOLOGY SOLAR WIND HYDRO CSP SUGARWindow(s) 1+2 1+2 2 1+2 proposedMW Allocation 1049 1 197 14 200 712Total project cost (Rm) 33 985 23 621 631 15 848 20 402

Local content value – construction (Rm) 11 988 6 767 421 4 029 12 690

Local content % (construction) 35.3% 28.6% 66.7% 25.4% 68%

Job creation (construction) 14 943 3 448 261 1 827 7 023

Job creation (operations) 415 193 7 120 437

Job creation (fuel) N/A N/A N/A N/A 25 326TOTAL JOBS 15 358 3 641 268 1 947 32 786

• 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

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Thank You

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