Zimbabwe Sugar Industry Expresses Concern Over New Blending Law

Chisumbanje Ethanol plant re-opened in Zimbabwe on March 25, 2013. The Southern African nation has a policy of indigenization and Look East., a photo by Pan-African News Wire File Photos on Flickr.

‘New blending law shuts out competition’

January 8, 2014

THE Zimbabwe sugar industry has expressed concern over the recently gazetted ethanol blending law as it inhibits private sector participation in the lucrative business.

Zimbabwe Sugar Sales General Manager, Mr Steve Frampton said the new law effectively shuts out private sector players, thereby preserving the monopoly of Green Fuel, the sole supplier of ethanol in the country.

“The current legislation hinders private sector firms like Tongaat Hulett, or any other private company that has no links to Government from actively participating in the sector.

These companies are left to source for external markets while Green Fuel remains the sole player in the sector. I am, however, confident that Green Fuel will be able to satisfy the demand of ethanol in the country,” he said.

TH which wholly owns Triangle Limited and has a 50,3 percent shareholding in Hippo Valley Estates is currently producing 740 000 litres of fuel grade ethanol per week and an average of 24 million litres per annum, depending on the availability of molasses which is the main raw material in the production of ethanol.

TH has the capacity to produce 27 million litres of ethanol annually and exports 75 percent of its ethanol and to South Africa and is looking for alternative markets to export the balance.

The firm had its fingers crossed from as long back as 2010/11 for a favourable blending policy that would encourage private sector participation in the industry.

TH started ethanol production at Triangle in 1980 before operations were halted by the 1992 drought.

TH re-commissioned its plant in 2010 with hopes of supplying the local market.

Analysts said the policy was crafted to protect the interests of Green Fuel, thereby killing competition in the bud as TH has the potential to sell ethanol at a much lower price as compared to current price which is due for review.

— FinX.