Illovo Sugar Rejects Calls for Price Reduction Despite Mounting Pressure
BLANTYRE, Malawi - Despite mounting pressure for Illovo Sugar Malawi plc to lower the price of sugar in the country, the company's Managing Director, Lekani Katandula, affirmed that there are no justifications for a price reduction, writes Steven Godfrey Mkweteza.
During a press conference in Blantyre on Monday, Katandula presented the company's financial performance for the half-year ended February 2023, where he said that the current sugar prices in Malawi are comparatively cheaper than those in neighbouring countries, making a reduction unnecessary.
"If our sugar prices are high, then why do cross-border traders buy our sugar in large numbers and resell them to other neighboring countries at a higher margin?" questioned Katandula.
According to Katandula, reducing the price of sugar in Malawi would result in a scarcity of the commodity, as traders would purchase it in bulk and resell it in countries where prices are higher than in Malawi.
Highlighting the company's financial growth, Katandula reported a remarkable increase in profit after tax, rising from MK9.2 billion in 2022 to MK33.7 billion, a 266 percent surge.
The company's total revenue also experienced a significant rise, reaching MK116.7 billion, a 27 percent increase compared to MK92.0 billion in 2022.
However, Katandula acknowledged a decrease in total production during the half-year period, despite the overall positive financial performance.
To further enhance revenue growth, Katandula mentioned ongoing discussions regarding a Power Purchase Agreement with the Electricity Supply Corporation of Malawi (ESCOM) to enable Illovo Sugar Malawi to sell excess power generated.
In response to the company's impressive performance, shareholder Lovemore Tinto expressed satisfaction, noting the increase in share price from 200 to 1000 and the consistent dividend payouts as positive indicators.
Illovo Sugar Malawi plc, listed on the Malawi Stock Exchange, operates in seven different countries worldwide.
The company remains steadfast in its decision to maintain sugar prices and aims to sustain its robust financial performance in the coming months.
As the debate on sugar pricing continues, consumers and industry stakeholders eagerly await developments and potential future adjustments in the market.
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