Another Workers Strike Brews In South Africa’s Sugar Sector

Another Workers Strike Brews In South Africa’s Sugar Sector

Written by Kevin Crowley | From Bloomberg

About 5,500 sugar workers in South Africa plan to strike tomorrow demanding an 11 percent increase in pay, a 40-hour working week and a monthly housing subsidy of 800 rand ($77).

Employers including Illovo Sugar Ltd. and Tongaat Hulett Ltd., Africa’s two biggest producers, have offered raises of 8.5 percent meaning the two sides are “relatively close,” Tongaat Chief Executive Officer Peter Staude said in an interview today. Inflation was 6.1 percent in April, according to the statistics agency.

South Africa is already beset by its longest and most costly mining strike, which began four months ago when platinum workers downed tools at Anglo American Platinum Ltd. , Impala Platinum Holdings Ltd. (IMP) and Lonmin Plc, the world’s biggest producers of the metal. The strike is hampering economic growth, Gill Marcus, governor of South Africa’s central bank, said last week.

Tongaat will mitigate the effect of the strike by running its mills longer at the end of the year if needed, Staude said.

“The mills actually shut down in November normally,” he said. “You always have the possibility later in the year to run a little bit longer. We are constrained by cane rather than milling capacity so that also helps.”

The rand weakened 0.3 percent against the dollar to 10.3257, the first decline in four days.

Illovo’s net income increased 6.5 percent to 916 million rand ($88.7 million) in the year through March as production climbed, while Tongaat’s earnings rose 7 percent to 1.16 billion rand after a boost from land sales in Kwa-Zulu Natal province, the companies said in separate statements today.

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