MIRA INFORM REPORT

 

 

Report Date :

02.08.2007

 

IDENTIFICATION DETAILS

 

Name :

ZAMBIA SUGAR PLC

 

 

Registered Office :

Lobombo Road, Nakambala Estate, P. O. Box 670240, Mazabuka

 

 

Country :

Zambia

 

 

Date of Incorporation :

13 September 1959

 

 

Com. Reg. No.:

2880

 

 

Legal Form :

Limited Liability Company

 

 

Line of Business :

Owners and operators of a sugar plantation and refinery. Subject produces sugar, molasses, jams and syrup.

 

 

RATING & COMMENTS

 

MIRA’s Rating :

Ba

 

RATING

STATUS

PROPOSED CREDIT LINE

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

Satisfactory

 

Maximum Credit Limit :

KWACHA 8,000,000,000

 

 

Status :

Good

 

 

Payment Behaviour :

Regular

 

 

Litigation :

Clear

 

 

COmpany NAME

 

ZAMBIA SUGAR PLC

 

 

ADDRESS

 

Street                           :  Lobombo Road

Area                             :  Nakambala Estate

P.O. Box           :  670240

Town                 :  Mazabuka

Country             :  Zambia

Telephone         :  (260 32) 30666 / 30144 / 31111 / 31109

Fax                   :  (260 32) 30110

 

 

Shortform Name

 

Zambia Sugar (ZS)

 

 

SENIOR COMPANY PERSONNEL

 

Name                                        Position

 

Paul Derolillard                          Managing Director

 

Jeff Blumberg                             Financial Director

 

Rabecca Katowa                        Marketing Director

 

Doreen Kabunda                        Human Resources Manager

 

Lovemore Sievu                          Corporate Affairs Manager

 

 

Total Employees

 

4,000-6,000 (number fluctuates according to the work in hand)

 

 

PAYMENTS

 

No complaints have been heard regarding payments from local suppliers or banks.

 

Subject is the largest sugar producer in Zambia.

 

We consider it is acceptable to deal with subject for LARGE amounts, although it is normal acceptable practice for international suppliers to deal on secured terms with Zambian importers.

 

Opinion on maximum credit        : KWACHA 8,000,000,000

 

Trade risk assessment               : Normal

 

Opinion on the credit figure of RANDS 30,000,000 :

 

The above figure is than normally seen in one amount, however could prove admissible in a short series of transactions provided the total indebtedness is strictly monitored.

 

 

TRADE REFERENCES

 

NAME               : PYRAMID HOLDINGS (PTY) LTD

P.O. Box           : 40381

Town                 : Gaborone

Country             : Botswana

 

NAME               : CAMECO INDUSTRIAL INC

P.O. Box           : 968

Town                 : Thibodaux

State                            : LA 70301

Country             : USA

 

NAME               : EWART CHAIN LTD

Street                           : Colombo Strett

Town                 : Derby DE3 8LX

Country             : UK

 

NAME               : TATE & LYLE PROCESS TECH

Town                 : 21 Delligburn, Greenock PA 15 4TP

Country             : Scotland, UK

 

NAME               : JOHN THOMPSON LTD

Town                 : Cape Town

Country             : South Africa

 

 

PRINCIPAL BANKERS

 

NAME               : BARCLAYS BANK OF ZAMBIA LTD

Branch              : Cairo Road

P.O. Box           : 31936

Town                 : Lusaka

Telephone         : (260 1) 228858

 

 

AUDITORS

 

Deloutte & Touch

Lusaka

 

 

 

 

 

FINANCIAL INFORMATION

 

Abridged Balance sheet as at 31 March 2005 showed :

 

ASSETS

 

Property, plant and

equipment                     : KWACHA  98,131,000,000 - 2004 - exact

: KWACHA 101,921,000,000 - 2005 - exact

 

Cane roots                    : KWACHA  40,413,000,000 - 2004 - exact

: KWACHA  52,900,000,000 - 2005 - exact

 

Current assets               : KWACHA 178,365,000,000 - 2004 - exact

: KWACHA 224,401,000,000 - 2005 - exact

 

Net cash                       : KWACHA  48.412,000,000 - 2004 - exact

: KWACHA  49,765,000,000 - 2005 - exact

 

Total assets                  : KWACHA 365,321,000,000 - 2004 - exact

: KWACHA 428,987,000,000 - 2005 - exact

 

EQUITY AND LIABILITIES

 

Capital and reserves       : KWACHA 237,203,000,000 - 2004 - exact

: KWACHA 260,927,000,000 - 2005 - exact

 

Deferred taxation            : KWACHA  39,766,000,000 - 2004 - exact

: KWACHA  43,343,000,000 - 2005 - exact

 

Deferred employee

liabilities                        : KWACHA   3,778,000,000 - 2004 - exact

: KWACHA   2,887,000,000 - 2005 - exact

 

Current liabilities            : KWACHA  84,574,000,000 - 2004 - exact

: KWACHA 121,830,000,000 - 2005 - exact

 

Total equity and

liabilities                        : KWACHA 365,321,000,000 - 2004 - exact

: KWACHA 428,987,000,000 - 2005 - exact

 

PROFIT AND LOSS ACCOUNT

 

Revenue                        : KWACHA      51,300,000 - 1986 - exact

: KWACHA     262,300,000 - 1987 - exact

: KWACHA     297,400,000 - 1988 - exact

: KWACHA     400,400,000 - 1989 - exact

: KWACHA   1,045,500,000 - 1990 - exact

: KWACHA   1,881,600,000 - 1991 - exact

: KWACHA   4,081,300,000 - 1992 - exact

: KWACHA  13,539,100,000 - 1993 - exact

: KWACHA  29,242,083,000 - 1994 - exact

: KWACHA  43,361,473,000 - 1995 - exact

: KWACHA  63,598,000,000 - 1996 - exact

: KWACHA 101,983,592,000 - 1997 - exact

: KWACHA 114,160,919,000 - 1998 - exact

: KWACHA  68,163,043,000 - 1998 - exact

: KWACHA 158,007,614,000 - 1999 - exact

: KWACHA 165,304,323,000 - 2000 - exact

: KWACHA 127,237,444,000 - 2001 - exact*

: KWACHA 224,041,000,000 - 2001 - exact

: KWACHA 283,244,000,000 - 2002 - exact

: KWACHA 215,936,000,000 - 2003 - exact

: KWACHA 432,357,000,000 - 2004 - exact

: KWACHA 486,083,000,000 - 2005 - exact

: KWACHA 501,833,000,000 - 2006 - exact

 

Profit from operations     : KWACHA 123,394,000,000 - 2004 - exact

: KWACHA 118,856,000,000 - 2005 - exact

           

Net financing costs        : KWACHA  (4,171,000,000)- 2004 - exact

: KWACHA    (843,000,000)- 2005 - exact

 

Dividends received          : KWACHA   1,275,000,000 - 2004 - exact

: KWACHA   1,275,000,000 - 2005 - exact

 

 

Net Profit                        : KWACHA      22,700,000 - 1986 - exact

: KWACHA      12,800,000 - 1987 - exact

Net Loss                       : KWACHA    (16,780,000) - 1988 - exact

Net Profit                       : KWACHA      17,350,000 - 1989 - exact

: KWACHA     224,100,000 - 1990 - exact

: KWACHA      96,100,000 - 1991 - exact

: KWACHA     761,200,000 - 1992 - exact

: KWACHA   4,388,600,000 - 1993 - exact

: KWACHA   8,985,609,000 - 1994 - exact

: KWACHA  12,008,262,000 - 1995 - exact

: KWACHA  15,137,000,000 - 1996 - exact

: KWACHA  20,977,330,000 - 1997 - exact

: KWACHA  11,349,721,000 - 1998 - exact

: KWACHA  20,878,673,000 - 1999 - exact

: KWACHA   2,613,653,000 - 2000 - exact

: KWACHA   9,995,343,000 - 2001 - exact*

: KWACHA  33,490,000,000 - 2001 - exact

: KWACHA  40,641,000,000 - 2002 - exact

: KWACHA  44,136,000,000 - 2003 - exact

: KWACHA 120,498,000,000 - 2004 - exact

: KWACHA 119,288,000,000 - 2005 - exact

: not given              - 2006

 

Financial year ends 31 March.

 

* for six months period (1 October 2000 - 31 March 2001)

 

Previously subject's financial year ended 31 March. In 1998 the company changed its financial year to 30 September. In 2001 and 2002 the company returned to 31 March accounting period and in 2003 changed its financial year to 30 September and in 2004 subject changed ts financial year to 31 March.

 

 

LEGAL STATUS AND HISTORY

 

Date Started      : 13 September 1959

 

History : Originally known as Ndola Sugar Company Limited, the company began operations as a sugar refinery in 1959 in the Ndola area, refining sugar produced at Chirundu, in Zimbabwe. At independence in 1964, the company changed its name to Zambia Sugar Company Limited. The government acquired a 51 % stake in the Zambia Sugar Company Limited in March 1972 through Indeco, a subsidiary of Zimco. In 1975 Indeco increased its ownership to 78 %. Tate & Lyle Technical Services Limited began to provide technical and managerial services via a technical services agreement with the Zambia Sugar Company Limited in 1973. Booker Tate Limited a joint venture of which 50 % is owned by Booker Plc and 50 % by Tate & Lyle Plc, assumed the function in 1988. Also during the 1980's, the Zambia Sugar Company Limited's management decided to transfer its sugar refining operations to Nakambala. The Ndola factory was eventually closed in 1990. On 18 July 1995 the company changed its name to Zambia Sugar Plc, in order to comply with the 1994 companies Act, which requires that corporations with more than fifty shareholders use the designation of Public Limited Company. On 1 August 1995, as part of the Government's privatisation programme, Zimco sold a 40% interest in ZSPlc to Tale & Lyle Plc. ZSPlc is now a subsidiary of Tate & Lyle Plc, which holds approximately 50.9% of the company's ordinary shares. At the same time, CDC acquired 31 % of the shares in ZSPlc and the balance of Zimco's shares not sold to Tate & Lyle Plc and CDC were transferred to the ZPTF (approximately 11%). On 1 April 2001 Tate & Lyle sold their shares to Illovo Sugar (50.86%).

 

C.R. No.                        : 2880

 

Authorised Capital          : KWACHA 2,767,500,000

 

Paid up Capital             : KWACHA 2,713,469,000

 

Limited Liability Company with the following shareholders :

 

Percentage

 

1. Illovo Sugar Ireland                             89.7%

Ultimate parent company :

Illovo Sugar South Africa

 

2. Institutional investors and members of

general public                                        10.3%

 

 

ACTIVITIES

 

The Company is involved in the following activities :

 

Owners and operators of a sugar plantation and refinery. Subject produces sugar, molasses, jams and syrup.

 

Brand Name : "White Spoon"

 

Production Capacity

175,000 tonnes - 1997 - exact

190,000 tonnes - 1998 - exact

191,559 tonnes - 1999 - exact

250,000 tonnes - 2000 - exact

200,000 tonnes - 2001 - exact

200,000 tonnes - 2002 - exact

232,000 tonnes - 2003 - exact

231,000 tonnes - 2004 - exact

247,000 tonnes - 2005 - exact

 

Imports from USA, UK, Germany, South Africa, Zimbabwe and Botswana.

 

Exports to Democratic Republic of Congo, Malawi, Rwanda, Angola, South Africa, Tanzania and EU.

 

Principal overseas suppliers :

 

- John Thompson Ltd, South Africa

 

- Douglas Roberts Company, South Africa

 

 

FACILITIES

 

The Company has the following facilities :

 

Leased*  17,000 hectares sugar plantation and a refinery in Nakambola Estate, Mazabuka as well as two offices elsewhere.

 

* 99 years

 

 

BRANCH OFFICES

 

1. Malambo Road 1646, Endola

PO Box : 30489

Lusaka

Telephone         :  (260 26) 246137 / 241028 / 245714 / 245572

Fax                   :  (260 26) 245009

 

2. Nakambala Road

PO Box : 230032

Ndola

Telephone         :  (260 26) 650541/3

Fax                   :  (260 26) 650671

 

RATING EXPLANATIONS

 

RATING

STATUS

 

 

PROPOSED CREDIT LINE

>86

Aaa

Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums

 

Unlimited

71-85

Aa

Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums

 

Large

56-70

A

Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums

 

Fairly Large

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

 

Satisfactory

26-40

B

Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.

 

Small

11-25

Ca

Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity

 

Limited with full security

<10

C

Absolute credit risk exists. Caution needed to be exercised

 

 

Credit not recommended

NR

In view of the lack of information, we have no basis upon which to recommend credit dealings

No Rating

 

 

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

 

Financial condition (40%)            Ownership background (20%)                 Payment record (10%)

Credit history (10%)                    Market trend (10%)                                Operational size (10%)

 

 

 

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions