Government commits to preserving jobs in the sugar industry

Government has committed to supporting the sugar industry in order to diversify and preserve jobs. The commitment was made by the Deputy Minister of Trade, Industry and Competition, Mr Zuko Godlimpi and the Deputy Minister of Agriculture, Rural Development and Land Reform, Ms Zoleka Capa. This was during a meeting between government and the sugar industry stakeholders in Durban, KwaZulu-Natal today.

The meeting discussed the role of the industry as a catalyst to economic development and the creation of jobs in the rural areas of KwaZulu-Natal and Mpumalanga, in particular.

Godlimpi stated that the Department Trade, Industry and Competition, (the dtic) would engage various government departments on the economic impact of the Health Promotion Levy (HPL) on Sugary Beverages, also known as the Sugar Tax.

"Restructuring and rebalancing the industry's capacity to cut costs, boosts competitiveness, lessen dependency on tariff protection, and laying the groundwork for diversification is crucial. The industry also needs to look at a diversification strategy that will enable it to tap into alternative energy sources and renewables such as biofuel that will revive and sustain the sector," he said.

Godlimpi warned that a single-product industry was still a risk whether government increases or decreases the tax. He further encouraged the industry to have a dialogue with different players in the aviation, environmental and energy sectors, for future partnerships .

Speaking at the same meeting, the Chairperson of the South African Sugar Association, Advocate Fay Mukaddam, said the Sugar Tax remained the opposition of the all-important Sugar Value Chain Master Plan as it works against the objectives of the master plan.

"Any increases to it or lowering of the threshold would decimate the industry. Since its introduction in April 2018, the Sugar Tax has led to multi-billion-rand revenue loss, thousands of job losses and permanent closure of two mills in KwaZulu-Natal, with Darnall becoming a ghost town and crime levels skyrocketing due to the closure of the sugar factory in the area," said Mukaddam.

Mukaddam pleaded with government to extend the moratorium to 2030. She said an extension of the current moratorium to be aligned with the Sugar Value Chain Master Plan would ensure that the industry have sufficient time to pursue identified product diversification opportunities, which are currently at scoping and pre-feasibility stages.

"Our intensive research has shown that a two-year moratorium to diversify is grossly insufficient. We need more time to reach the commercialisation phase when it comes to identified product diversification opportunities," she said.

Since the signing of the Sugar Value Chain Master Plan, progress has been made, including a premium price paid to support small scale growers and industry transformation interventions. To date the industry has spent mor than R1.2 billion as part of transformation.

Media enquiries and interview requests
Yamkela Fanisi - Ministerial Spokesperson
Department of Trade, Industry and Competition
E-mail: [email protected]
Cell: 076 034 6551

Bongani Lukhele - Director: Media Relations
Tel: 012 394 1643
Cell: 079 5083 457
WhatsApp: 074 2998 512
E-mail: [email protected]

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