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2020 Chairmans Report

These are unsettled times. As I write this report under lockdown I am pondering whether we will have the opportunity to present the UCL results for 2019/20 to you in person on 6 August 2020 or whether the Annual General Meeting will be postponed. Either way, as I am sure most of you are doing, we make our preparations as routinely as possible and will adjust as circumstances dictate.

To lament the present difficulties experienced by most of us is not completely unjustified but it would fail to capture some of the positive outcomes that have also ensued. Presented with the odds stacked against us, UCL has managed to find innovative ways to mitigate obstacles and to test new ways of doing things. The result has seen record production levels at both the Sugar Factory and the Sawmill, new markets have been explored and developed while some new products are also under investigation. All of these bode well for the future.

Probably the most talked about concern amongst suppliers has been the threat of carry-over cane. Following the closure of two of the industry’s mills, Darnall and Umzimkulu, UCL was abruptly limited as to where it could send its perennial excess cane. The risk to our cane growers is significant and while various opportunities to limit the harm have since arisen, this threat is poised to reoccur unless a more permanent solution is found. This conundrum was the catalyst for considering expansion options to eliminate the various bottlenecks in the mill. Investigations were initiated and various options deliberated with the aim of finding a solution that offers both an increase in throughput and additional operational flexibility. It is with no small measure of enthusiasm that I announce the approval of a Sugar Mill expansion project to be implemented during the forthcoming off-crop. In preparation for the start of the 2021 season we are aiming to install additional capacity in order to increase our throughput rate to 175t of cane per hour, which is expected to deliver additional crush capacity of up to 200 000t of cane and a total crush in excess of one million tons. Not only will this offer relief to our cane growers but is also expected to significantly increase the profitability of our sugar manufacturing operations. This will be the sugar mill’s third major expansion since 1965 and sets the tone for our future ambition and commitment.

Other projects already approved include the installation of a Bio-furnace in the Extract Factory. This construction, due for completion in June 2020, aims to eliminate all coal consumption in the manufacture of Wattle Extract and has the added advantage of creating demand for the chips produced by the Sawmill. The Board is also pleased to announce the approval of an Avocado planting project on our Redclyff Estate, which when complete, will boast 200Ha of selected varieties of Avocado trees to be phased in over a five year period. In conjunction with other local growers, we also intend to emulate our existing business model by building a central pack-house for the grading, storage, packing and distribution of Avocados, primarily for the export market. Diversity has been the cornerstone of UCL’s past success and staying true to this strategy is expected to sustain our future viability.


In considering a dividend for the 2019/20 financial year, the Board was beset with considerable uncertainty. As per the Shareholder Committee Charter we are required to strike ‘the correct balance between the interests of Shareholders and the interests of the Company and its stakeholders’. In light of the challenges facing each of our divisions as well as the need for significant investment in the coming year, no dividend and supplementary prices have been approved for the past financial year. While this represents a break from our proud record of paying disbursements to Shareholders and suppliers, it also demonstrates our commitment to ensuring the financial security of the company and directing resources in a way that will ultimately create improved long term value. The company has stood firm against the difficulties experienced in recent times. We are finding solutions to problems as they arise and are constantly testing the boundaries of operational performance. I commend the efforts of UCL’s staff and the support demonstrated by our suppliers in delivering a good outcome.

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