c) Processor and Grower Margins
With
millers’ and growers’ shares of the sales proceeds defined, it is possible to
confront their revenues with their respective costs and to examine the
resulting margins. All net distributable proceeds are passed to the miller,
who, according to the sucrose price and amount delivered, pays the grower his
share. This then becomes the miller’s raw materials cost. The remainder after
subtracting his direct and indirect manufacturing costs from the manufacturing
margin gives an indication of his profits before interest and taxes. In spite
of the limitations on time and detail, the information in Table 17 shows this margin to be very narrow, indeed. To further
illustrate the point, sugar costs are given in national and international
units.
Table 17: Pro-Forma P&L in Cane Processing 2005/2006, Swaziland Millers
|
|
|
|
|
|
#1 |
#2 |
||||||
|
|
Cane Crushed |
|
3,114,372 |
|
|
1,923,959 |
|
|||||
|
|
Sugar Made, ttq, t |
|
387,745 |
|
|
231,986 |
|
|||||
|
|
|
|
|
|
|
|
per |
per t |
|
|
per |
per t |
|
|
|
|
|
|
Amount, E 1000 |
t |
total |
Amount, E 1000 |
t |
Total |
||
|
|
|
|
|
|
|
|
cane |
sugar |
|
|
cane |
Sugar |
|
Sales Revenues |
|
918,287 |
0.295 |
2.368 |
|
647,235 |
0.336 |
2.790 |
||||
|
|
Raw Sugar |
875,142 |
|
|
|
|
|
|
|
|||
|
Other Rev. (Ref. Allow.) |
41,657 |
|
|
|
|
|
|
|
||||
|
GROSS REVENUE |
|
918,287 |
0.295 |
2.368 |
|
647,235 |
0.336 |
2.790 |
||||
|
Sales Charges |
|
|
0.000 |
0.000 |
|
100,534 |
0.052 |
0.433 |
||||
|
|
Marktg & Dist. Costs |
|
|
|
|
84,794 |
|
|
|
|||
|
|
Stock Adjustments |
|
|
|
|
-7,611 |
|
|
|
|||
|
|
Levy, Exports to EU |
|
|
|
|
23,351 |
|
|
|
|||
|
NET REVENUE |
|
918,287 |
0.295 |
2.368 |
|
546,701 |
0.284 |
2.357 |
||||
|
Raw Materials Cost |
|
582,586 |
0.187 |
1.502 |
|
346,870 |
0.180 |
1.495 |
||||
|
|
Growers' Sucrose |
582,586 |
|
|
|
346,870 |
|
|
|
|||
|
Manufacturing Margin |
|
335,701 |
0.108 |
0.866 |
|
199,831 |
0.104 |
0.861 |
||||
|
Total Manufact. Cost |
|
238,471 |
0.077 |
0.615 |
|
150,318 |
0.078 |
0.648 |
||||
|
Direct Cost of Sugar |
167,131 |
|
|
|
106,168 |
|
|
|
||||
|
Indirect Costs of Sugar |
71,340 |
|
|
|
44,150 |
|
|
|
||||
|
PROFIT 1/ |
|
|
97,230 |
0.031 |
0.251 |
|
49,513 |
0.026 |
0.213 |
|||
|
Cost of Sugar, E/MT |
|
|
|
2,118 |
|
|
|
2,143 |
||||
|
Cost of Sugar, ˘/lb (US) |
|
|
|
15.7 |
|
|
|
15.9 |
||||
|
1/ Before interest and tax |
Source: RSSC and Ubombo |
|||||||||||
The sucrose payment received from the miller
constitutes the cane grower’s revenue. In Table 18, three examples of actual large cane growers
are followed through. On a turnover of around E20,000/ha, the cane grower
receives a margin of only between E 1,000 and E3,000.
|
Table 18:
Pro-Forma P&L, Cane Production 2005/2006, Selected Swaziland
Growers |
|||||||||||
|
|
|
|
#1 |
#2 |
#3 |
||||||
|
Area Harv., ha |
19,350 |
|
|
7,656 |
|
|
2,208 |
|
|
||
|
Cane Deliv., t |
1,954,325 |
|
|
802,030 |
|
|
228,469 |
|
|
||
|
Sucrose, % |
14.28 |
|
|
14.21 |
|
|
14.11 |
|
|
||
|
Sucrose, t |
279,078 |
|
|
113,968 |
|
|
32,237 |
|
|
||
|
Sucr. Price, E/t* |
1,300 |
|
|
1,300 |
|
|
1,300 |
|
|
||
|
|
|
|
Amount |
per |
per t |
Amount |
per |
per t |
Amount |
per |
Per t |
|
|
|
|
E 1000 |
ha |
cane |
E 1000 |
ha |
cane |
E 1000 |
ha |
cane |
|
Sucrose Revenue |
362,801 |
|
|
148,159 |
|
|
41,908 |
|
|
||
|
Other Revenues |
11,654 |
|
|
20,061 |
|
|
6,139 |
|
|
||
|
Gross Revenue |
374,455 |
19.352 |
|
168,220 |
21.972 |
|
48,047 |
21.760 |
|
||
|
Tot. Cost of Cane |
352,456 |
18.215 |
0.180 |
146,710 |
19.163 |
0.183 |
42,994 |
19.472 |
0.188 |
||
|
Dir. Cost of Cane |
226,680 |
11.715 |
0.116 |
118,168 |
15.435 |
0.147 |
40,447 |
18.318 |
0.177 |
||
|
Indir. C. of Cane |
125,776 |
6.500 |
0.064 |
28,542 |
3.728 |
0.036 |
2,547 |
1.154 |
0.011 |
||
|
PROFIT |
|
21,999 |
1.137 |
0.011 |
21,510 |
2.809 |
0.027 |
5,053 |
2.288 |
0.022 |
|
* Intermediate Source: RSSC and Ubombo