2. THE SUGAR INDUSTRY AT A GLANCE
growers
small scale growers
1 400 commercial growers
including 323 black growers
14 sugar mills
Jobs
2,2 million tons of sugar p/a
12 billion rand annual income
Estimated 1 Million livelihoods

3. Total Ex-Factory Costs
COST COMPETIVENESS
Rank
Total F.O.B. Stowed Costs 1
Nicaragua 2
Guatemala 3
Thailand 4
Brazil (C.S.) 5
Colombia 6
Honduras 7
El Salvador 8
South Africa 9
Zimbabwe 10
Swaziland
Rank
Total Ex-Factory Costs 1
Nicaragua 8
Zambia 2
Guatemala 9
Swaziland 3
Brazil (C.S.) 10
Honduras 4
Colombia 11
El Salvador 5
Malawi 12
Bolivia 6
Thailand 13
South Africa 7
Zimbabwe 14
Sudan
Source: LMC International; Worldwide survey of sugar and HFCS Production Costs; 2012 Report

4. LAND AND AGRARIAN REFORM
An increase from 5% in 1994 to 21% of freehold transferred
Black growers produce 2.5 million tons of cane
Settlement of claims will see 50% of land ownership in hands of black growers
Land reform in sugar leading the way

5. DEVELOPMENTS FROM SUGARCANE
RENEWABLE ENERGY
DEVELOPMENTS FROM SUGARCANE
Globally more sugar industries are transforming to co-produce sugar, ethanol and electricity
World’s two largest cane producers, Brazil and India, have access to sugar, regulated electricity and ethanol markets
South African sugarcane value chain is cost but not revenue competitive

6. DEVELOPMENTS FROM SUGARCANE
RENEWABLE ENERGY
DEVELOPMENTS FROM SUGARCANE
South Africa - urgent need for additional power generation
Renewable energy as electricity and ethanol part of dti sugar industry strategy

7. SUGAR INDUSTRY COGENERATION VALUE PROPOSITION
All 14 sugar mills match fuel supply with own energy use
100% cogeneration implemented at all 14 mills
Generic Sugar Industry Proposal
New Power Island
Medium to High pressure power island
Develop additional area under cane
Develop additional fibre sources
Mill Energy Efficiency and Agricultural Yield Improvements
Cogeneration supplies steam to sugar mill
Sugar mill procures electricity from grid
Power station critical to operation of sugar mill
Tariff based on capital return, operating and fuel cost

8. POTENTIAL IN SUGARCANE AGRICULTURE AND PROCESSING
Global trends
Diversify product offering
Improves revenue & cost effectiveness
Brazil leading in ethanol
India leading in electricity
Electricity & Steam
Currently fuel supply to match own energy use
At high efficiency 2 to 7 times more electricity
Other Products:
Animal feed, paper, chemicals
Future – cellulosic ethanol
15% Fibre
15% Sugar
Tops and leaves
not currently utilized, is about equal to sugarcane fibre
Fibre
Sugar to market
Sugars to fuel ethanol
Water free
(blend to E10)
Water containing
(Fuel Flex Vehicles)
Sugarcane – one of most efficient plants to convert sunlight to energy
Season – ethanol could extend existing 8 months
Sugarcane
Molasses

9. SUGAR INDUSTRY COGENERATION VALUE PROPOSITION
Project timing
Biomass competitive advantage of KZN and southern Mpumalanga
Extensive economic and social development
All 14 mills in this area - no RE projects to date in these areas
Agriculture and rural development
Jobs and skills development
Sustainable land reform
Socio-economic development build on and expand existing programs and initiatives
Green – renewable – emission reduction
Industrialisation

10. SUGAR INDUSTRY COGENERATION VALUE PROPOSITION
DESCRIPTOR
RENEWABLE COGENERATION
SUGARCANE FIBRE
Primary Renewable Fuel
Sugarcane Fibre
(includes bagasse and leaves)
Typical Sugarcane Harvest Season
April – December
Total Planned Electricity Generation Capacity (MW)
712
Commercial Operate Dates
2014 – 2024
No. of projects 15
Locality
KwaZulu-Natal
Mpumalanga

11. SUGAR INDUSTRY COGENERATION VALUE PROPOSITION
DESCRIPTOR
RENEWABLE COGENERATION
SUGARCANE FIBRE
Total Project Cost (ZAR million)
20,402
Project Starting Tariffs
Range of tariffs dependant on the Project specific requirements
Tariff Indexation Approach
Key industry sugar drivers are not CPI linked. A basket indexation proposed (on a project by project basis if required)
Local content value – Construction
(ZAR million)
12,690
Local content % - Construction 68
Job creation - Construction Phase
7023
Job creation - Operations Phase
437
Job creation – Fuel Phase
25 326
Total Jobs
32 786

12. Quality and quantity of jobs
Construction – 7 023
Operation – 437
Agriculture –

13. COMPARATIVE ASSESSMENT ACROSS RENEWABLE TECHNOLOGIES
TECHNOLOGY
SOLAR
WIND
HYDRO
CSP
SUGAR
Window(s)
1+2 2
proposed
MW Allocation
1049
1 197 14
200
712
Total project cost (Rm)
33 985
23 621
631
15 848
20 402
Local content value – construction (Rm)
11 988
6 767
421
4 029
12 690
Local content % (construction)
35.3%
28.6%
66.7%
25.4%
68%
Job creation (construction)
14 943
3 448
261
1 827
7 023
Job creation (operations)
415
193 7
120
437
Job creation (fuel)
N/A
25 326
TOTAL JOBS
15 358
3 641
268
1 947
32 786
Consolidated industry impact
Level of development at different stages

14. WAY FORWARD
Members of the SA sugar have responded to Request for Registration and Information (RFRI) – 12 July
Require an enabling procurement programme fulfilling both the electricity (Department of Energy) and sugar industry (dti) objectives
Contractual agreements
Procurement approach and timing
Process to engage on low hanging fruit projects
Inclusion of biomass cogeneration in long term energy plans e.g. IRP and IEP

15. Thank You