The Sugarcane Value Chain Master Plan 2030 aims to prevent the sugar industry from collapsing, following its decline in recent years.

The industry depends on government to create viable measures to assist with industry growth, but a potential lack of trust between government and the industry needs to be addressed, says nonprofit trade movement FairPlay founder Francois Baird.

The Master Plan also aims to work urgently on a new restructuring plan to restore the industry to profitability – this will protect rural jobs, livelihoods and businesses.

Consequently, the plan aims to cut down on dumped sugar imports, increase the consumption of locally produced sugar, and find additional ways of earning revenue from sugar cane.

Baird attributes the current crisis that the industry faces to South Africa’s largest sugar producer Tongaat Hulett’s having to be saved from collapse, which he says was seemingly caused by the producer’s own financial problems.

The Master Plan is, thus, essential to rescue Tongaat and its many employees, as well as to set the sugar industry firmly on a growth path.

“The Master Plan pointed out that the sugar industry’s future depended on its finding additional income streams – it has to use sugar cane to produce more than just sugar. These include electricity and, until recently, ethanol for blending into petrol and aviation fuel,” he adds.

Baird says the Department of Trade, Industry and Competition (DTIC) called the objective of diversified revenue streams and new job opportunities “a bold new ambition for the future”.

A key component of these revenue streams is the production of biofuels for vehicles and aircraft.

He explains that ethanol blending has been used in sugar-producing countries such as Brazil, India and the US, noting that with most of the US ethanol coming from maize, this presented fuel ethanol as a good option for South Africa.

However, since the Master Plan was signed, the outlook for ethanol blending has changed because large parts of the world, including Europe and America, have committed to phasing out internal combustion engines, adds Baird.

“Cars could, in future be mandated to run on renewable energy – initially hybrid and then only by electricity or ‘green’ power such as hydrogen.”

He says South Africa has looked at ethanol production and blending for more than a decade, and even had a legislative framework gazetted in 2020 – the same year the Master Plan was signed.

However, this has not produced the large ethanol plants the planners believed would rescue the sugar industry.

In response to this, FairPlay calls for an urgent investigation into the viability of ethanol blending in view of changes to come.

If it is viable, then urgent action is necessary because the fuel ethanol timeframe may be limited. If not, then urgent assessment is needed of alternative uses for biofuels, and for sugar, as the industry’s future depends on diversification.

“It is all urgent, and it is going to require rapid action, investment, trust and cooperation between government, the sugar industry, labour unions and communities.“

He adds that master plans are driven by the DTIC and Minister Ebrahim Patel.

However, Baird says Patel has already “shaken the trust” of the poultry industry through his decision to delay the implementation of anti-dumping duties against Brazil and four European Union countries for a year.

This conflicts with the aim of the Poultry Sector Master Plan – which was signed a year before the sugar master plan– to encourage government to commit to “act decisively” against dumping.

Dumping has also affected the local sugar industry. Therefore, Patel’s decision to delay the implementation of anti-dumping duties in the poultry industry brings similar commitment to the sugar industry into question.

“Essential for the success of both master plans is a high level of trust between government and the industries concerned,” he declares.

The sugar industry will also rely on Patel’s commitments to address alternative revenue streams and plans to save Tongaat Hulett.

“FairPlay has been a strong supporter of both master plans, but we have been concerned about the implications of the anti-dumping delay for wider issues relating to the implementation of those plans.”