Fighting to alleviate the plight of small-scale farmers within the sugarcane industry is close to Freddie Willis’s heart. As a newly elected board member of the SA Canegrowers Association, he believes that by unifying the industry and fighting for better prices, a win-win solution will be created for all sugar farmers.
When Freddie Willis left a career of criminal investigation in the South African Police Services, he envisioned his retirement as a peaceful endeavour. But when presented with an opportunity to farm, he decided to put his retirement on ice.
Freddie Willis
“My father farmed sugarcane close to the Driekoppies Dam in Nkomazi and as a young boy I would help him in the field. So farming has always been in my blood. The sugar industry also provided me with my first job as I worked in the RCL, previously TSB, extraction plant boiling sugar,” Willis explained.
But it would be decades before he would return to the family farm, as a more adventurous career beckoned: he joined the police force in 1970, spending 26 years in the criminal investigations department. During that time he also fought in what was then South-West Africa and Rhodesia, as there was a shortage of soldiers in South Africa.
His retirement was therefore well deserved, but instead, he recognised the value in farming sugar and acquired a 7ha piece of land. “I was lucky, because when I came back home to Nkomazi from Middleburg after retiring, we were given a crash course on sugarcane farming by government. There were also many more subsequent workshops offered by the SA Canegrowers Association so I was able to learn how to farm, looking at the financial side of things and business principles.
“I really enjoy farming. I loved working in the police force but it was dangerous, so farming is far more enjoyable. Sugar farming has good prospects despite the slump in the industry. If you follow your crop programme correctly you will get a good yield and everything can be sent to the mill. Nothing has to be marketed yourself,” he said.
He added that the biggest challenges, and those on which SA Canegrowers was focusing, are the low price and unifying the growers. “The price has sunk very low, mostly due to cheaper imports. There needs to be better control of imports to improve the prices. Government needs to come on board with the industry and provide better regulation that will see our farmers succeed.”
While sugar farming was relatively easy, there were many small-scale growers who were struggling to survive because of limited capacity to expand their farms. “The income obtained from a small farm is often too little on which to survive. For these farmers the only option is to expand but there is no land available. With the low prices being paid, the need for bigger farms is all the more pressing. People are just getting by.
“As a board member I would like to concentrate efforts on small-scale farmers who are struggling. They need business plans, grants and some kind of support. The price needs to improve for the cane, overall, which will also improve the situation for these small growers.”
On his retirement plans, Willis laughed, saying there could be a chance for rest “some time soon”. “My children are interested in taking over from me, and hopefully, then I will finally be able to retire.”
Photo Caption: Güdco’s Ruan Coetzee and staff at one of the creches where they have supplied new lavatories and continue to supply toilet paper for the children on an ongoing basis.
For nearly forty years forestry giant Sappi Southern Africa has produced paper from sugarcane, but it’s taking a young and determined Cape Town entrepreneur to bring a by-product of the country’s embattled sugar industry into the era of “feel-good, do-good” consumption.
Across the planet the climate change and pollution crisis is top of mind as scientists and activists rightly call on politicians and world leaders to do more to mitigate the rising global temperatures and to end the production of single use plastics to curb the wave of pollution in our river and oceans.
While it is true that both sugarcane and timber plantations are mono-crops that bring into question the sustainability of their production, in a balanced argument both create employment and socio-economic stability in some of South Africa’s most remote rural regions.
Other paper and pulp products made from the sugarcane fibre and the gum from timber are not only bio-degradable but carbon neutral as well.
And it is this fact that has led to the production and marketing of Güdsheet Toilet Paper, which Güdco’s Ruan Coetzee describes as South Africa’s only “feel-good, do-good” product of its kind.
“Güdsheet is made using 60% sugarcane fibre and 40% FSC-approved wood pulp to ensure sustainable afforestation. This hybrid blend of sustainable fibres produces a very soft paper which is a lot softer than most recycled paper products, and it’s strong too! Not to mention that it’s 100% biodegradable and produced from certified sustainable raw materials. Sugarcane fibres quickly dissolve back into the earth, so it’s safe for all disposal systems,” Coetzee said.
Each roll is individually hand-wrapped with love, in eco-friendly paper to promote hygiene, before being packed in recycled boxes.
Virgin fibres
And because sugarcane is made up of virgin fibres, they don’t require heavy bleaching of inks and dyes as in recycled paper products. “In fact, it doesn’t require any chlorine, acids, inks or dyes. It is bleached using an elemental chlorine-free (ECF) process that’s good for your bum and the environment,” he said.
Sappi Forests KZN spokesman Zelda Schwalbach said the group’s Stanger paper and pulp mill on the KwaZulu-Natal north coast was bought way back in 1979 from Reed International and the CG Smith Sugar Group. The facility produced mainly high-end paper from sugarcane bagasse and gum extracted from commercially produced timber; one of only a few mills in the world that uses bagasse (sugar cane waste) as its primary source of pulp.
Most of the bagasse is supplied from the nearby Gledhow sugar mill.
“The Stanger mill used to produce only fine papers for publishing purposes, but our operations have changed over time, which means it now produces only tissue paper and the Typek paper that you will find in offices across the country. Our customer base of tissue converters deal in various end-use markets in both the retail sector and industrial sector, with the majority being in toilet tissue, but also producing the likes of serviettes and wipes. It really is one of the best kept secrets and it is important that when the general public buys paper or tissue products, that they question where it is manufactured and how,” Schwalbach said.
“From a communications perspective, it remains one of our biggest challenges: to slay some of the myths around wood fibre. There are many misperceptions relating to forestry – the most popular one being that we should ‘save the trees’ and use less paper. The fact is our forests are being developed according to strict sustainability standards in accordance with international certification and of course, the trees are absorbing tons of carbon from the atmosphere,” she said.
Taking toilet paper to the next level
And while that all sounds environmentally good and sound, Coetzee and his Cape Town team have taken their “environment and bum friendly” toilet paper product to the next level.
“Unfortunately our product is still more expensive that the usual toilet paper bought in retail stores. Moving away from plastic is not cheap, let’s be honest, but we are working towards an economy of scale that will eventually tip in the planet’s favour. We really do believe it is very important to market and produce great products that serve both people and the environment. Güdsheet also helps provide toilets and toilet paper to underprivileged schools and crèches in need. And many might argue that this doesn’t seem a very glamorous contribution to society, but having access to toilet paper and a proper toilet provides dignity, health and an improved quality of life,” he said.
Each roll is individually hand-wrapped with love, in eco-friendly paper to promote hygiene, before being packed in recycled boxes.
“I believe it is time to start giving a sheet about toilet tissue. Güdsheet is here to help prevent the planet from getting wiped out. Being made from sustainable resources, this eco-friendly toilet paper has a much lower carbon footprint than conventional toilet paper. Each roll is individually hand-wrapped with love, in eco-friendly paper to promote hygiene, and packed in recycled boxes to replace plastic.”
November 19 was World Toilet Day.
For more info, visit www.gudco.co.za
Despite the massive challenges facing South Africa’s sugarcane farmers, Kwanalu’s Young Farmer of the Year for 2019 remains true to his vision of improved land use, and an ethical and supportive relationship with his staff and neighbouring community.
KwaZulu-Natal’s 2019 Kwanalu Young Farmer of the Year Simon D’Aubrey is quintessentially a new generation farmer.
He is young, well-travelled and educated, and feels deeply about the part he can play in promoting socio-economic justice in farming while shouldering the responsibility he believes he holds to promote best practice in agricultural production.
Daily, he questions his role in making sure he is able to balance running a viable and ethical agri-business, while paying a fair wage and supporting the villagers and communities bordering his Zululand property.
Equally, since taking over the Arcadia Estate in the rolling hills of Entumeni, west of Eshowe, D’Aubrey has made remarkable progress in aligning his operation with the industry’s sustainable farming benchmarking system, SUSFARMS. Just one aspect of the evidence is the return of wetlands, riverine forests and species of animals and birds that are endemic to the region.
And while the young farmer may have returned five years ago to the farm that has remained in his mother’s family for three generations, he and his American-born wife Emily and their two children have walked a tough road to get where they are today.
“The plan was that I would return home from the States where I was working. My uncle, who was farming the land at that time, would be my mentor with the idea that a management company would be formed to allow me, over time, to acquire a stake in the business. But it didn’t work out like that. Just three years into the mentorship period my uncle said he and my aunt wanted to sell up and retire to Ballito. We had a big decision to make,” D’Aubrey said.
Award-winning farmer Simon D’Aubrey and neighbouring community farmer John Gumede discuss sugarcane awaiting transport to the Amatikulu mill.
The couple used their Christmas break visiting Emily’s family in the United States to think through their options.
“I remember arriving back in South Africa from the snow and cold in the US to a blistering January in Zululand. I can’t say we were optimistic, we had no doubt the challenge ahead was huge. I had spoken to many people, rehashed the budget several times to make sure it worked, and then the support of the community and my neighbours was just incredible during that time. We had managed to raise the sale price through the help of family and a loan from the Land Bank. The sugar price was really good. The rainfall had been above average. The worst drought in living memory had come and gone, I thought it would be easy.”
But, it was 2016: the slide to the lowest world sugar price in more than a decade was looming, and the arrival of thousands of tons of cheap sugar into South African ports on the back of an inadequate import tariff was under way. As if that weren’t enough, the South African government then instituted its Health Promotion Levy on sugary drinks, precipitating a crisis in the sector.
It is these very circumstances that bring into relief the extraordinary commitment and dedication by this young family, who have taken a farm in need of fresh energy and turned it into a model more than worthy of the Kwanalu accolade.
Before taking over the operation, D’Aubrey, who has a B-Tech degree in agriculture and a degree in property development, with honours in construction management, worked on some major development projects in KwaZulu-Natal.
“The years that I worked in the industry really served me well as I learned how to manage big projects that required an eye for detail and precision. I also learned to work with teams. These skills have served me well here on the farm,” he said.
While describing himself as “not your typical farmer” and someone who questions every day whether he is doing enough for his community and his land, D’Aubrey is bringing new thinking to the operation.
The test plot where Simon D’Aubrey has planted organic lemons as part of his plan to diversify away from sugarcane.
“We have fantastic soils and an average of 1 200ml of rain a year in a good season – during the drought we averaged 700ml a year. So I am working on diversifying our income stream away from sugarcane to alternate crops such as organic lemons, avocadoes and hemp – although sugarcane will remain the primary crop for the next decade while we wait for the alternatives to show true promise. I also run an indigenous tree nursery with my brother, a landscaper in Durban. At the moment 90% of the farm is planted to sugarcane with 8% dedicated to timber and 1% to contracting and bottled water, firewood and cash crops on fallow land.”
While he waits for his license to produce hemp on a commercial scale, D’Aubrey has planted up a test site to establish the feasibility of the crop in the prevailing conditions and has a plan to grow his avocado orchard to 50ha over the next five years.
“My philosophy is to be kind to the land, honour my employees and be open to change. I am trying to work with our eco-systems and in time, to improve them. My aim is to use fewer harmful insecticides and weedicides and to remove the alien vegetation. I am planting indigenous trees and all replant cane fields are currently being pulled back 5m from the water courses. The wetlands in the valley areas are under rehabilitation. I believe that the new generation of farmers will have to be innovative to maintain yields and be able to provide food to a market that is very aware of what it eats, where it comes from and how it is grown and processed,” he said.
And while this is the theme running through D’Aubrey’s conversation as he points out the different aspects of his fields, the depth and quality of the soils, while checking the leaves on the organic lemon trees for disease and explains why some fields are fallow after the discovery of the sugarcane longhorn stemborer – a relatively new pest in South Africa’s sugar crop – it’s in conversation with the neighbouring smallholder farmers that his attitude to transformation and socio-economic investment becomes apparent.
Small-scale sugarcane farmer John Gumede stops weeding his field of madumbi or yam plants to greet D’Aubrey. The two immediately start discussing the matter of some harvested sugarcane waiting to be loaded and transported to the mill on a nearby loading zone.
“I was born here,” Gumede said. “My father and grandfather were also born here. The vegetables we grow put the daily food on our table and the sugarcane brings in extra income, which is very important to us. Lo mlimi osemusha usebenza kanye nathi, uyasisiza (this young farmer is supporting us). We really appreciate his help.”
In return, D’Aubrey said he focuses on his role in transformation the farming sector by helping to prepare and maintain the sugarcane fields, while during the harvest he assists with hauling and in the off-crop, he ploughs and cuts the grass for eight smallholder farmers.
“I also assist with water supply in the drier months and firewood. I maintain the road, which we share, and provide advice on farming techniques.”
D’Aubrey serves as vice-chairman of the Eshowe/Entumeni Farmers’ Association, is the vice-chairman of the district pest and disease committee, and represents the farmers’ association at SA Canegrower meetings.
A lone Kiepersol tree stands sentinel in a newly planted sugarcane field on Arcadia Estate.
Growers with Tongaat Hulett supply agreements are using the ‘best brains’ in the business to conduct due diligence on a recently announced deal allowing commercial, land reform beneficiaries, and small-scale growers a stake in the company’s milling and refining operations.
A further plan by South Africa’s sugar company Tongaat Hulett to diversify its agri-business by offering growers a minority stake in its milling, refining and distribution operations is now under scrutiny by a group of sugarcane farmers, with the hope of a resolution by Christmas.
The offer comes on the back of the sugar industry facing a number of challenges over the past few years, compounded by a forensic audit which revealed accounting irregularities at the company over a number of years and a request earlier this year to suspend trading on the Johannesburg Stock Exchange. The company also delayed the release of its annual financial statements.
In a bid to shore up the business while simultaneously answering the South African government’s directive for improved and increased land reform in the sector, two deals have been launched by the company’s CEO Gavin Hudson.
Tongaat Hulett CEO Gavin Hudson.
The first – already at an advanced stage – has resulted in the establishment of FarmCo, which aims to “transition” the farming of the South African sugar operation’s land with future development potential to mostly previously disadvantaged growers. The second offers growers a minority stake in their milling, refining and distribution operations.
Phase one of the FarmCo setup was the establishment of Uzinzo Sugar Farming to allow designated shareholders to lease 3 900ha of prime land at a below market-related rental, producing 160 000 tons of sugarcane.
The entity is headed by three existing growers who have a 65% shareholding, with a 15% stake allocated to employees and the remaining 20% going to Tongaat Hulett. And it is also here that the company hopes some of the thousands of staff retrenched over the period will have an opportunity for re-employment.
Explaining the second initiative, Hudson said in a statement released on 25 October that strategic assets owned by the company’s South African sugar operations would form the initial assets in the business, which included four Tongaat Hulett-owned mills, its stand-alone refinery and its animal feed business. The entity would include the production of sugar related products, such as speciality sugars, syrups and liquids.
“For many years, growers have called for equity participation in the milling and refining business, which would allow for their increased participation in the sugar industry value chain. The initiative is providing this opportunity, which is revolutionary for the industry,” he said.
It was envisaged the transaction would be completed by December 2019, he added.
Responding to the offer, growers who attended the launch of the mill deal said despite the challenges facing the sugar industry, it was critically important that an agreement was reached that would not only protect employment but also the sector’s contribution to both the national and regional economies.
“It’s a case of being ‘damned if you do, and damned if you don’t’,” one grower said.
Tongaat Hulett’s Felixton mill which will be included in the sugar group’s new plan to include growers in the company’s milling and refining business.
“If we all walk away and allow the industry to collapse, that means massive job losses and an impact on the agricultural economy, from which it would be very hard to recover. Many of us would not be able to farm anymore. There is no way that all the land under sugarcane in KwaZulu-Natal can be converted to macadamia orchards, there is not enough water for that and not all of the land is suitable for growing the crop.”
The impact on the livelihoods of thousands of rural people who depend on the income from sugarcane to pay their household expenses, including school and university fees, he added, would be far-reaching.
“The fact is 119 000ha of sugarcane is grown in Tongaat’s catchments in KwaZulu-Natal. You can’t just decide that production is not important to the economy. We can’t let that go without a fight and we can’t just sit back and say it is not our problem. It is our problem and all growers are being consulted on the proposed deal. We are in the due diligence process now. We are investigating the proposal using some of the brightest minds we can find both here in South Africa and abroad. We won’t settle for something we believe will fail, but rather, we want to make sure we come up with a deal that is destined for success and has the potential to build our economy and the agricultural sector in the country,” he said.
An Australian sugar industry study on diversification has shown that growers and millers alike are waiting for opportunities to present themselves before they act. At the same time the sector agrees that ownership and operation of any new technologies or products are likely to remain within the industry itself, rather than attract outside investors.
In line with the dilemma facing South Africa’s sugar producers, a study into diversification opportunities by the Australian industry has revealed there are few short-term solutions or an appetite for strategic investment, despite a raft of bio-refining options from the crop.
David Rynne, director of Trade, Policy and Economics at the Australian Sugar Milling Council (ASMC).
In short, the study suggests a “market watch” approach – in the hope of improved trading conditions. At the same time the report encourages growers to keep an eye on technological advances able to improve on-farm cost efficiencies and higher yields per hectare.
“The (Australian) industry has, as a whole, investigated numerous opportunities in the past with very little actually being confirmed as viable, and no game changers identified,” the study concluded.
With the title Industry Priorities for Value Add and Diversification Opportunities in the (Australian) Sugar Industry, the study was undertaken by that country’s Lazuli Consulting to assist Sugar Research Australia to better understand industry views on value adding and product diversification.
It also aimed to develop a list of “agreed prioritised diversification opportunities that may require further research and development activity or market analysis” as a roadmap towards improved industry returns and sustainability.
The research was concluded in November 2018 and the final report was released earlier this year.
Obstacles and possibilities
The methodology used for the research included consultation with “key industry figures”, as well as 27 consultation sessions held with representatives from the cane grower association CANEGROWERS, milling companies and experts both within and outside the sector.
Director of Trade, Policy and Economics at the Australian Sugar Milling Council (ASMC) David Rynne said while the report demonstrated an array of possibilities to shore up the viability of the sugar industry, it also demonstrated just as many obstacles, with inconsistent and uncertain government policies topping the list.
“Our major competitors in Thailand and Brazil are currently adding significant value via electricity cogeneration and biofuel production, in no small part due to the fact that both countries benefit from supportive government policy frameworks and have well-articulated diversification strategies in place,” Rynne said.
Value add and diversification has been a goal for the Australian industry for decades with the following schematic showing the various known categories of opportunities and how they relate to the supply chain.
The “high level” options to improve sustainability included in the study were to:
- Increase yields on farms to reduce the long run marginal cost per unit of sugar sold.
- Reduce costs for growers, for example, lower irrigation costs through the use of solar power, reduced fertiliser and pesticide costs, reduced labour costs by using autonomous vehicles and other new data-driven technologies.
- Reduce in-system losses such as harvest losses of cane juice, improved mill process yields, selectively harvesting the highest CCS – the basis of payment in the Australian sugarcane industry, which rather than a direct measure of sucrose content is an estimate of total sugar (%) (Brix) adjusted for purity (Pol) and stalk fibre content.
- Increase economies of scale for growers.
- Increase asset utilisation – examples include 24/7 harvesting, supplementary crops to extend mill operation into the non-crush and re-use of farming/harvest/transport assets for non-sugar crops, and finally;
- To find value adds and diversification.
In the study, both growers and millers agreed that reducing harvest, transport and milling losses could be done almost immediately. However, the limited budget available to optimise the existing value chain saw others saying bigger gains could be made in new revenue streams such as cogeneration, ethanol and other new products.
There was also a strong call for both millers and growers to work together, with consensus that it would be premature to revisit the cane payment formula until opportunities became a reality.
However, unanswered questions included:
- What happens if there is a move to more fibre, such as energy cane?
- What happens if a third party establishes a biorefinery at (a) mill?
While the study gives South African growers and millers a window into the difficulties facing their peers Down Under, there are some unique challenges facing the domestic industry, which include the Health Promotions Levy and the flood of cheap imports, particularly from neighbouring countries such as Eswatini (free of import tariff), and an inadequate deep sea import tariff, which has resulted in product dumping, particularly in 2018.
However, what both industries face is the lowest world sugar price in a decade and a glut on the world market that could see below-production-cost prices at least until 2021 or 2022.
Also, the current worldwide trend against sugar consumption for health reasons against the desire by consumers for the same taste, but with lower calories, is a shared challenge.
At the start of the Australian study it was assumed that certain diversification strategies and value add products and chemicals would be chosen as priorities for industry focus. Instead, what emerged was a request for a “market watch” service based on the premise that the main barrier to value add and diversification was “greater certainty on the market, prices and volume demand”.
And while enhanced cogeneration was cited as an option for diversification, regulatory uncertainty and a preference for solar power by the Australian Government was listed as a “market risk”.
High ethanol export market
In the case of ethanol production, a large export market was cited as a plus, however, the cost of shipping the product was high, and contracts were usually only on a short-term basis due to growing competition in the market.
Diverting cane juice from the sugar production processes to ethanol production processes, the participants said, had the potential to adversely affect sugar production costs.
Densified biomass made from cane tops and trash was viewed as a possible income earner because the Australian steel industry, for example, was “potentially” interested in using renewable alternatives to coal.
Participants in the study suggested biomass could be made available using energy cane, sweet sorghum or other crops. “Also, potentially of interest could be blends of sugarcane-derived product with other crops, e.g. wood.”
And despite the fact that speciality chemicals produced for sugar required “deep pockets”, this aspect of diversification was “overwhelmingly” supported in preference of pursuing the production of chemicals from biomass.
The production of rum was given the thumbs up by the Australians as the study showed 3 076 million litres of distilled spirits – 50% ethanol based – was bottled in the United States alone in 2017, with some 160 million litres imported. Brazil was believed to dedicate at least 36 million tons of cane a year to the production of rum from molasses and cane juice, making about 1 500 million litres of the spirit per year.
And despite the cane payment system cited as a “potential future hurdle”, growing high fibre cane was raised by a “few parties” as a possible diversification resolution.
Deep pockets needed for commercialisation
Of particular interest was the “surprisingly” low number of requests for Sugar Research Australia to investigate new products, as participants in the study said there was already “a lot” of research happening domestically, and globally, hundreds of companies were trying to commercialise their intellectual property. It could take many years, and deep pockets, to commercialise any single product without any guarantee of success.
“Many technologies are effectively stuck in the laboratory. They achieve good technical results at that scale but fail to make it to a pilot scale. Buyers and financiers typically require at least one commercial scale reference plant before buying or investing in a technology, and many of the technologies already at commercial scale have failed to work commercially; the yields are too low,” the participants said.
In short, Australia’s sugar industry is adopting a watch and wait attitude to diversification. And on whether or not they want outside investment or ownership of technology or production shifts, they were clear any investment would most likely be owned and developed by the industry itself.
About Australian Sugar Industry
Australia has 377 000ha under cane and its 24 sugar mills produce around 4.4mt raw sugar per year, of which 85% is exported. More than 487 megawatts of cogenerated electricity is used to power mill operations and an equivalent amount is exported to the national grid (enough to power 70,000 homes). The Queensland industry uses 4 000km of rail and 250 diesel-hydraulic locomotives to transport cane from the fields to the mills. Other mills, including in the New South Wales region, use trucks to haul cane. The country has six sugar storage and export terminals at ports along the Queensland coast.
In 2017 Australia’s growers averaged around 88.4 tons-a-ha or 33.34 mt cane, and more than 90% mill revenue was derived from sales of raw sugar.
Sugar mills produce some molasses sold for animal feed or for export, and one mill produces a small volume of bioethanol.
In comparison, South Africa has 361 210ha under cane, with 90% of the crop transported from field to mill using road transport, and the energy produced is used only by the 14 individual mills.
Over the same period, South African growers produced 68.99 tons-a-ha or 17.38mt and almost 2 million tons gross of white and brown sugar, of which 40% was exported through the single terminal at the Durban port. The country’s millers produced 784 627 tons of molasses sold on to the domestic market, with a limited amount of ethanol produced from molasses and about 5% used for yeast production.
