Photo: RCL Foods
Group revenue from continuing operations rose by 1,8% to R26,5 billion, while EBITDA increased by 11,4% to R2,56 billion, supported mainly by the baking and grocery divisions. Baking and groceries improved EBITDA by R285,1 million and R127,9 million, respectively, reflecting resilience despite subdued consumer demand in a low-growth economy.
The sugar division, however, recorded a 0,8% drop in revenue to R11,71 billion, while EBITDA fell by 24,3% to R963,1 million.
RCL CEO Paul Cruickshank said the sugar division performed well operationally but was constrained by external pressures such as lower global sugar prices and increased imports into South Africa.
CFO Rob Field warned that imports were “a grave concern going forward, because [they displace] local production”. He noted that the import tariff had “lost its effectiveness because it has not kept up with inflation. With lower international sugar prices, importers are taking advantage of the low tariff. The industry is not being protected against dumping”.
Field added that longer-term viability required stronger implementation of the Sugar Value Chain Master Plan 2030 (SMP), which aimed to secure 95% local procurement.
“The SMP hasn’t gained the momentum it needs within government. There are incentives and legislation required to see it succeed. Yet tension within government, between the Health Promotion Levy and insufficient action against dumping, undermines the plan’s intent to support sugar producers,” he explained.
Despite these headwinds, Field said RCL’s sugar operations were in good shape, with strong sugar cane yields and efficient milling. He added that the company would continue lobbying for a fairer tariff structure.
“Government has multiple trade distractions at the moment, and the sugar import tariff is not getting the attention it deserves,” he said.
The company is also pursuing legal action against Tongaat Hulett to recover R234,4 million in special levies it paid in 2023. These levies were imposed after Tongaat and Gledhow Sugar Company entered business rescue and stopped paying their statutory levies to the South African Sugar Association, leaving other producers to carry the shortfall.
RCL has already recovered R72,3 million of the R234,4 million and is confident of recouping the rest, especially with Tongaat expected to exit business rescue soon.
Looking ahead, Field expressed cautious optimism: “We seem to be over the worst of the repercussions within the industry in lieu of mills going out of business.
“There are still strong incentives for farmers to keep planting sugar cane, whether for sugar, ethanol, or power generation, either as a standalone crop or part of a diversified strategy. With growing demand, I have no concerns about the long-term viability of sugarcane farmers.”
