Illovo’s fortunes, as an integrated agriculture entity, are greatly affected by yields from the farm, efficiencies at the sugarcane milling plant, and the price of sugar in the market. The company’s sugarcane estates score highly, with yields per hectare of 98 to 100 tonnes in recent times, against a world average of 70-80 tonnes and sucrose
content of 14.10% which is very competitive. Total production from the company’s estates has grown by 30% from the low point of 230 000 tonnes in 2018 to 279 000
tonnes in 2021.
Illovo is also an acknowledged low-cost producer, thanks to irrigation facilities, good climatic conditions, and high cane yields. This low-cost status will allow Illovo to remain competitive in the export markets even during soft commodity price periods. As well, the company is Malawi’s biggest of the two sugar producers and thus, can control its margins without comprising demand. At the same time, the demand for sugar is generally inelastic.
