Staff Writer 
THE Zimbabwean sugar industry is grappling with significant challenges as escalating operational costs and unfavourable policy decisions jeopardise its viability.
This has led companies like Triangle Limited (Triangle) to undertake drastic measures, including a three-phased staff rationalisation exercise, to stay afloat amidst mounting pressures.
Triangle, wholly owned by South African sugar giant Tongaat Huletts, announced the retrenchment exercise this week, which will begin in February and proceed in phases through May and August.
While the number of employees affected remains undisclosed, the move underscores the severity of the challenges the local sugar sector faces.
Since 2022, the industry has been plagued by a 55 percent contraction in profit margins, a 133 percent increase in manpower costs as a proportion of revenue, and unsustainable debt levels.
Rising costs in key areas such as fertiliser, fuel, and maintenance, coupled with inflationary pressures and currency instability, have significantly impacted operations.
Additionally, changes to VAT policies and competition from low-cost, duty-free sugar imports have exacerbated the crisis.
“Escalating operational costs, particularly in areas such as fertiliser, fuel, maintenance costs, and imported goods/services, combined with inflationary pressures, currency losses, and the inability to claim VAT on inputs after sugar was exempted from VAT, have severely impacted our ability to sustain current levels of operation,” said Triangle managing director Tendai Masawi.
Masawi emphasised that the retrenchment decision is part of the broader “Project Zambuko” strategy aimed at restructuring and stabilising the business. He stated that the move was necessary to protect the long-term sustainability of the organisation and generate sufficient cash flows to reduce debt and reinvest in the future.
The local sugar industry’s troubles are not isolated to Triangle. Hippo Valley Estates, another major player, reported a 65 percent drop in profit before tax to US$11,5 million for the six months ending September 30, 2024, despite a 24 percent increase in revenue compared to the previous year. Rising operational costs and policy changes have significantly eroded profitability.
Star Africa Corporation, a local sugar producer, also flagged similar concerns in its interim results for the six months ending September 30, 2024.
“The proposed 2025 National Budget’s failure to categorize industrial granulated white sugar to standard rating for VAT purposes poses a significant threat to the local sugar industry,” the company stated.
“The current status quo translates to higher costs and selling prices, making the industry vulnerable to sugar dumping by regional producers.”
Economists and industry analysts have highlighted the urgent need for comprehensive solutions to safeguard the sugar sector.
Economic analyst, Vince Musewe, pointed out that the challenges facing the sugar industry reflect the broader economic struggles in Zimbabwe.
“The viability of business operations is under extreme pressure, reflecting an economy that has become highly informalised and unstable,” Musewe said.
“High production costs and competition from cheap imports are key issues.
This is a time for self-evaluation and reflection, particularly by political leaders.
Urgent solutions are needed, but there seems to be an unwillingness to face the truth and consult those with the competence to advise.”
The Zimbabwe Sugar Association has continued to engage authorities to address these challenges, advocating for policies that protect the local sugar value chain from dumping and ensure the industry’s sustainability.
FBC Securities, in its 2025 economic outlook, predicted more job cuts across industries, signalling a difficult road ahead for the country’s economy. By Kudzanai Gerede
Companies and Markets Editor
newsdesk@fingaz.co.zw
