10 October 2014

Rainfallin the South African cane catchment areas has been well below the long-termmean and this topic has received substantial coverage over the past few months.

Giventhe lower rainfall during the season, it is projected that sugar production, bythe Tongaat Hulett South African sugar operations will be below that of the2013/14 year of 634 000 tons, which was a very good sugar production year. The latest estimate shows a drop in sugarproduction ranging between 5 and 17 percent compared to last year’s sugar production.Tongaat Hulett’s 4 South African sugar mills will commence the annual off-cropshut down at the end of the normal milling season.

Thepoor rainfall season, has been mitigated by an additional 11 554 hectaresof newly planted cane which has been harvested for the first time thisyear. While there is a drop in sugarproduction this is still well above the two seasons prior to 2013/14 when sugarproduction levels were 486 000tons.

Therainy season has commenced and good summer rains, accompanied by normalsunshine levels will contribute to yields returning to normal levels for the2015/16 season. The business will benefit from a further 4 738 hectares ofnewly planted cane which will be harvested for the first time.

TheSouth African Sugar industry’s 2014/15 season estimate (in August 2014) oftotal sugar production is 2,222 million tons compared to 2,344 million tons inthe 2013/14 season, a 5 percent drop off in production. Further updates will be madeby the industry in due course. The drop in production will result in reducedexposure of the industry to the World market.

Measuresto protect the local market against unfair import competition remain importantand the overall increase in the reference price used in the import dutycalculation over the last 6 months has been beneficial.

Thefocus in Tongaat Hulett on achieving substantial cost reductions has continued.

Tongaat, KwaZulu-Natal

10 October 2014

Issued by: Tongaat Hulett
Michelle Jean-Louis
Communications Executive
Telephone: 032 4394101