Wilmar operates an integrated sugar business across the entire value chain from sugarcane in Australia and beet plantations in Morocco to retail products marketed under leading brands such as CSR, Chelsea, Al Kasbah and Madhur. In between, we operate sugar mills, cogeneration plants, ethanol distilleries, and sugar refineries across the globe, linking key origins and destinations through a market-leading merchandising team headquartered in Singapore and supported by key strategic partnerships, such as the joint venture with the leading sugar and ethanol producer, Raízen Energia S.A. in Brazil. We trade over 12.0 million MT of raw and white sugar globally.
In Australia, our sugar business involves sugarcane cultivation, milling and refining to produce white sugar, brown sugar, caster sugar and syrups. We also produce ethanol as well as fertiliser.
We produce around 60% of Australia’s raw sugar and our 75%-owned refinery joint venture supplies about 75% of Australia’s and New Zealand’s refined sugar requirements and also exports to many Asia Pacific markets. We are also Australia’s largest generator of renewable electricity from biomass. We own leading sugar brands CSR in Australia and Chelsea in New Zealand. To complement our diversified product and brand portfolio, we also distribute the Equal range of sweeteners.
In Indonesia, we operate two refineries in Java with a refining capacity of about 700,000 MT.
In Morocco, we own a block of 29.9% (as at December 2019) in Cosumar S.A. (Cosumar) which operates one refinery and seven sugar beet/cane mills as well as the sugar brands Al Kasbah, La Gazelle and El Bellar. Cosumar is the sole sugar producer in Morocco and the third largest in the African continent, with a strong distribution network that includes exporting refined sugar to neighbouring countries around the Mediterranean Sea and West Africa.
In India, we are the majority controlling shareholder with 58% of Shree Renuka Sugars Limited (SRSL), the leading sugar company in India. SRSL’s business comprises seven mills with a total cane crushing capacity of 8.4 million MT per annum, two port-based refineries - one each in Kandla and Haldia - with a combined capacity of 1.8 million MT per annum, a cogeneration capacity of 584 MW as well as the leading sugar brand Madhur.
In Myanmar, we have a majority 55:45 joint venture with Great Wall Food Stuff Industry Company Limited, the leading sugar company. The joint venture operates two sugar mills with a total sugar production of 1.4 million MT, a bio-ethanol plant and an organic compound fertiliser plant.
We have also expanded our sugar operations to Inner Mongolia, China, where our activities include the purchase and processing of sugar beet, the sale of sugar beet and its by-products as well as the production and sale of sugar and sugar products.
| Milling | Refining | |
| Subsidiaries | ||
| Australia | 8 | 2 |
| New Zealand | 0 | 1 |
| Indonesia | 0 | 2 |
| India | 7 | 2 |
| Myanmar | 2 | 0 |
| China | 2 | 0 |
| Total no. of mills/plants | 19 | 7 |
| Total capacity (million MT p.a) |
28 | 4 |
| Associate | ||
| Morocco | 7 | 1 |
| Total no. of mills/plants | 7 | 1 |
| Total capacity (million MT p.a) |
4 | 1 |
In 2019, we consolidated our operations worldwide and improved the integration between refineries and marketing. We set up a white sugar marketing desk in Dubai that centralises white sugar distribution from our refineries.
In Australia, we have integrated our refinery operations and marketing desk with the operations of Goodman Fielder which is now a wholly-owned subsidiary of the Group.
World sugar price was under pressure for most of 2019, trading down to a low of 10.50 US cents per pound and mostly traded below 12.50 US cents per pound due to massive exports from India, which further added to an already oversupplied market. Thailand had another bumper crop and sugar was delivered for the first time in many years against the July New York and August London quotations.
In 2019, the Sugar division reported a pre-tax profit of US$2.6 million compared to a pre-tax loss of US$128.2 million in 2018. The better performance was due to the absence of a non-cash impairment charge of US$138.6 million recognised in 2018 relating to the milling operations in Australia.
Overall sales volume for the segment increased by 16% from 11.7 million MT in 2018 to 13.6 million MT in 2019. Correspondingly, revenue increased by 17% from US$4.01 billion in 2018 to US$4.71 billion in 2019.
The weather in Asia was generally dry in 2019 and this is expected to result in lower crop production across the region in 2020. In Thailand, due to unfavourable weather conditions, cane production could be reduced as much as 40.0 million MT removing about 5.0 million MT of sugar in one year, while China, Indonesia and the Philippines are expected to import larger quantities of sugar. At the same time, US beet and cane crops were negatively affected by bad weather, therefore also increasing its import requirements. The European crop is also down drastically, leaving limited availability for export. However, we can expect a good crop from India with another export quota anticipated.
In 2020, the new Cosumar refinery, named Durrah and located in Yanbu, Saudi Arabia, will start operations with a capacity of 850,000 MT/year.
Our Sugar division is well placed to capture the higher white premium (difference between London white market and New York raw market) and the positive outlook in the Far East business.