“SUGAR-FREE” VS SUGAR-POWERED FUTURE SHARON DE SOUSA COMMERCIAL DIRECTOR Good Afternoon Ladies & Gentlemen I do hope that you have found our conference insightful thus far I would like us to reflect on all the challenges facing our Sugar Industries i.e. “Sugar-Free” and how Sugar can still be a driving force for our economies.

Traditional Uses of Sugar The Traditional Uses of Sugar have been; Sugar Packaged for table top use Sugar in Sweets In Confectionery In Beverages Do these traditional uses still make sense in the medium to long term in light of the challenges facing the sugar sector regionally and globally (we know it does in the short to medium-term, but what about the medium to long term?)

Sugar Under Attack! I am sure many of you are aware that sugar is under attack Sugar has been ‘claimed’ to be a contributor to overweight and obesity In fact some say sugar has become the ‘new tobacco’ Hence the Anti-Sugar Campaigns

WHO has issued guidelines recommending reduced sugar intake As a result of this some governments have decided to levy a Sugar Tax on certain sugar containing products (although some governments have termed is a health levy to make it attractive to the health lobbyist) Governments

Customers Consumers have becoming very conscious about the sugar content in the products they consume Companies have therefore had to re-think their formulations In this survey conducted by Harris Interactive we can see that 42% of consumers are concerned with sugar content but luckily the flavor remains more important, which limits the extent of reformulation and thus reduction in sugar.

Impact of Anti Sugar Campaigns Reduced Sugar Demand The Sugar Tax (beside consumer preferences) has also been a catalyst for sugar reduction in many soft drinks Meaning sugar requirements from soft drink manufacturers has and is expected to continue reducing

What happens with the sugar market if humanity will reduce their sugar consumption and turn towards alternative sweeteners? All these things shown on the slide are a threat to sugar, i.e. anti-sugar campaign, sugar tax use of alternative sweeteners On the back of this reduced demand for sugar What happens to the sugar market if humanity will reduce their sugar consumption and turn towards alternative sweeteners? Yet sugar sector is so important for many economies and some are even expanding.

TRADE LIBERALISATION VS PROTECTIONISM The Global Trade dynamics continue to evolve, Trade liberalization versus protectionism. Making it difficult for Sugar Industries to have sustainable access to preferential markets. Also making difficult for investment decisions to be made with a long term perspective. TRADE LIBERALISATION VS PROTECTIONISM

THE FUTURE Sugar industry too important to sugar-producing economies. The future of sugar is under threat, but can still be secured. What will it take? So What does the future hold for our Sugar Industries The Sugar Industry is very important to SADC sugar-producing economies. We see sugar coming under threat, but can it still be secured? We feel it can But the question then is what will it take to secure it?

RE-THINK VALUE ADDITION DIVERSIFICATION There is need to rethink our current modus operandi in terms of Value Addition and perhaps diversification within and outside the sugar sector

These are some of the examples of what our various industries are doing – some more than others. But there is opportunity to do more. The question is, whether it is viable to do so given our varying industry and economic profiles.

Securing a Future for the Sugar Sector Diversify and Add Value! Where can we increase value or add value beyond: what we are currently doing, that is, cogeneration from Bagasse Alcohol from molasses Ethanol from molasses Is there enough value addition happening to the product as it stands? And what are we leaving on the ‘stalk of cane’ that could revitalize the industry (given falling global consumption trends and market prices?)

Securing a Future for the Sugar Sector It has become imperative and urgent to prepare a plan to explore sugarcane as a multiple product commodity, in service to all future generations. “a food-feed-fuel-fibre-fodder-fertilizer crop” It is therefore imperative and urgent to prepare a plan to explore sugarcane as a multiple product commodity, in service to all future generations. “a food-feed-fuel-fibre-fodder-fertilizer crop

SECURE FUTURE FOR SUGAR Balanced approach to sugar and health. Research and product development. Enhance intra-regional and intra-Africa sugar trade. Conducive policy environment for investment, research and trade. To Secure the future of Sugar, there needs to be a balanced approach to sugar and health. (The health message should not override the health benefits of sugar, some of which are misinformed) We need to invest in further research and product development to secure the future of sugar such as that done by Nutrition Innovation. Sugar is still a healthier option than many of the alternative sweeteners and a good source of energy . We need to focus on enhancing intra-regional and intra-Africa sugar trade. The one difficulty we continue to face is the commitment and enforceability of regional trade arrangements. As long we do not find a way to deal with this we will find that we have very good Trade Agreements in place, but with no meaningful and beneficial sugar trade. Our governments are also called upon to assist by ensuring a conducive policy environment for the investments required to increase value addition, and to ensure meaningful trade arrangements.

LET US SECURE A SUGAR-POWERED FUTURE THANK YOU! I trust the panel discussion following my presentation will give us some of their thoughts on how we can secure a sugar-powered future.