Le­saf­fre, Ton­gaat Hulett re­solve mo­lasses im­passe

Chronicle (Zimbabwe) - - Business Chronicle - Love­more Zi­gara

GWERU-BASED yeast man­u­fac­turer, Le­saf­fre Zim­babwe, has re­solved its dif­fer­ences with sugar pro­ces­sor, Ton­gaat Hulett, af­ter the lat­ter pro­posed to hike the price of mo­lasses by 25 per­cent.

Ton­gaat Hulett, the coun­try’s largest sugar pro­ces­sor also in­di­cated that it would cut its sup­plies of mo­lasses to the yeast man­u­fac­turer by 40 per­cent.

A meet­ing be­tween the two par­ties last week saw the sugar pro­ces­sor hik­ing the price of mo­lasses by $9 to $69 per tonne.

Ton­gaat Hulett had ear­lier an­nounced in­ten­tions to in­crease the price of the com­mod­ity from $60 per tonne to $85 per tonne af­ter ar­gu­ing that the com­pany has sub­dued stocks due to the de­pressed pro­duc­tion in sugar cane fol­low­ing a poor sum­mer crop­ping sea­son.

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

An­chor Yeast man­ag­ing di­rec­tor, Mr Be­nard La­guerre, told Busi­ness Chronicle the new pric­ing regime was fair as it would al­low the com­pany to re­main com­pet­i­tive in light of re­gional com­pe­ti­tion.

“We are happy with the new pric­ing model which I be­lieve is fair to both par­ties as this means we re­main com­pet­i­tive es­pe­cially if you com­pare us with other re­gional play­ers. They have ad­vised us that we are as­sured of at least 9 000 tonnes of mo­lasses which is enough for our re­quire­ments,” he said.

Early this year, Le­saf­fre Group snapped 60 per­cent share­hold­ing of An­chor Yeast to take over man­age­ment con­trol in a deal worth $17 mil­lion. Le­saf­fre Zim­babwe an­nounced plans to be­gin ex­ports to Zam­bia, Malawi and Mozam­bique in Septem­ber.

Le­saf­fre Group has pledged to in­ject US$5 mil­lion in the next two years into its sub­sidiary Le­saf­fre Zim­babwe as part of ef­forts to ramp up pro­duc­tion at its Gweru fac­tory by 300 per­cent of cur­rent pro­duc­tion.

Le­saf­fre Zim­babwe pro­duces 5,000 tonnes of yeast an­nu­ally.

The French con­glom­er­ate which con­trols 60 per­cent of the world mar­ket and its prod­ucts are sold in more than 180 coun­tries made an ini­tial cap­i­tal in­jec­tion of US$3,5 mil­lion when it took over con­trol last year.

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