In his State of the Nation Address, following the general election in 2019, President Cyril Ramaphosa committed to a `reimagined industrial strategy’ that will be one of the centre-pieces of rebuilding the economy.

To support the reimagined industrial strategy, the President announced that Government will develop a number of masterplans to help create conducive conditions for industries to grow. This will include assisting companies to improve their industrial capacities and sophistication, focusing more on export orientation, and reclaiming domestic market space lost to imports.

The sugar industry was identified as an important agriculture sector, supporting a large number of jobs, and contributing to the livelihoods of large numbers of South Africans in important regions of the country.

As announced in my budget vote speech in the National Assembly on 11 July 2019, the Department of Trade, Industry and Competition and the Department of Agriculture, Land Reform and Rural Development, have together with industry stakeholders, commenced engagement on the development of a Masterplan for the South African Sugarcane value-chain (‘the Sugar Masterplan’). The process to produce the Sugar Masterplan was co-chaired by the Minister of Agriculture, Land reform and Rural Development, Minister Thoko Didiza.

A proposed Sugar Masterplan has now been developed. It requires a set of collaborative actions by stakeholders in the industry, which in turns require an appropriate exemption from certain provisions of the Competition Act, given that collaboration between competitors is not ordinarily allowed in terms of the Act.

The Sugar Masterplan is the result of the process of extensive engagement and consultation amongst sugar industry stakeholders and social partners, particularly small and large cane growers, millers and refiners, retailers, industrial users of sugar and sugar-derived products, as well as workers and government.

The Masterplan seeks to create a diversified and globally competitive, sustainable and transformed sugarcane-based value chain that actively contributes to South Africa’s economic and social development, creating prosperity for stakeholders in the sugarcane value chain, the wider bio-economy, society and the environment.

Phase 1 of the Sugarcane-based value chain Masterplan will run for three years and is focused on key actions with the following objectives:

During Phase 1 of the Masterplan, which will run for three years, industrial users and retailers of sugar have committed to minimum levels of South African grown and produced sugar, equal to no less than 80% of need during Year 1, and increasing to 95% by Year 3. To support this undertaking, sugar producers have equally committed to price restraint during this period. Over the three-year Phase 1 period, the sugar industry will commence a stabilisation and restructuring plan which will include, inter alia, development of diversified revenue sources for the industry, small-scale grower retention, support and transformation.

Phase 1 will be implemented through seven (7) short-term action commitments aimed at stabilising and restructuring the industry.

To support re-balancing of industry capacity, and improve efficiency and restore profitability, and consider ways to maximise employment and transformation in the industry in line with the Masterplan, exemption of the sugar industry for a period of one year from certain sections of the Competition Act, 1998 (Act No. 89 of 1998), is required to enable the industry to develop the industry restructuring plan.

Within one year of exemption being granted, a detailed sugar industry restructuring plan must be developed and put into operation, that will include detailed plans to: