Le­saf­fre, Ton­gaat Hul­lett in mo­lasses im­passe

Chronicle (Zimbabwe) - - Business - Love­more Zi­gara Mid­lands Cor­re­spon­dent

GWERU-BASED yeast man­u­fac­turer Le­saf­fre Zim­babwe will hold a meet­ing with Ton­gaat Hul­lett this week to find com­mon ground af­ter the lat­ter pro­posed to hike the price of mo­lasses by 25 per­cent.

Ton­gaat Hul­lett, the coun­try’s largest sugar pro­ces­sor also in­tends to cut its sup­plies of mo­lasses to the yeast man­u­fac­turer by 40 per­cent.

The in­crease in the price of mo­lasses from $60 per tonne to $85 per tonne comes af­ter a de­pressed pro­duc­tion in sugar cane fol­low­ing a poor sum­mer crop­ping sea­son.

Mo­lasses, a sugar pro­duc­tion by-prod­uct, is a key com­po­nent in the pro­duc­tion of yeast as it pro­vides the sugar source.

An­chor Yeast man­ag­ing di­rec­tor, Mr Bernard La­guerre told Chron­i­cle Busi­ness that an in­crease in the price of mo­lasses will af­fect the com­pany’s com­pet­i­tive­ness.

“We are meet­ing on Tues­day with Ton­gaat Hul­lett so that we agree on how we move for­ward af­ter they an­nounced plans to in­crease the price of mo­lasses. The raw ma­te­rial is a key com­po­nent in the pro­duc­tion of yeast and any in­crease will re­sult in us in­creas­ing our prices, which will af­fect our com­pet­i­tive­ness es­pe­cially in light of im­ports com­ing mainly from South Africa,” he said.

Mr La­guerre said if no so­lu­tion is found Le­saf­fre may be forced to im­port mo­lasses from Mozam­bique.

He said this might af­fect the com­pany’s plans to ex­port into the re­gion should it face chal­lenges as a re­sult of the price hike.

Early this year, Le­saf­fre Group snapped 60 per­cent share­hold­ing of An­chor Yeast to take over man­age­ment con­trol in a deal worth $17 mil­lion.

The com­pany has al­ready an­nounced plans to start ex­port­ing to Zam­bia, Malawi and Mozam­bique next month.

Le­saf­fre Group has pledged to in­ject $5 mil­lion in the next two years into its sub­sidiary Le­saf­fre Zim­babwe as part of ef­forts to in­crease pro­duc­tion at its Gweru fac­tory.

The French con­glom­er­ate, which con­trols 60 per­cent of the world mar­ket and its prod­ucts are sold in more than 180 coun­tries, last year in­jected $3,5 mil­lion into the Gweru busi­ness.

Les­safre Zim­babwe pro­duces 5,000 tonnes of yeast an­nu­ally.

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