The Riversbend Estate had been an ongoing problem for the group, with poor soils, the long distance to the mill and the lateness of the citrus crop making it marginal for both cane and citrus.

The sale of the group’s Komatipoort Estate to the government remains an unresolved issue. Although contracts have been concluded, payment has not been forthcoming and legal action has been taken to enforce our rights.

On the expansion front, a 438 ha cane farm was acquired in Zambia as the first phase of a plan to establish a larger operation in that country to take advantage of the excellent environmental and market conditions prevailing there. Our Mthayiza joint venture in Mpumalanga enjoyed a successful first year of operation and a joint venture was initiated with the KwaCele community on the Langespruit Estate previously sold to the Department of Land Affairs.

Despite the current depressed conditions prevailing in many global agricultural markets, international commentators are still generally of the opinion that the prospects for world agriculture are sound, as is evidenced by continued international interest in agricultural development in sub-
Saharan Africa. The consensus appears to be that the global economic crisis has been a temporary setback to a market driven by rising demand from an increasing population, diminishing natural resources, environmental change and the quest for renewable energy resources. All of these positive factors impact directly on the sugar industry, although short-term supply-demand fluctuations will continue to affect world spot markets.

The South African agricultural industry remains unsettled. On the political front land restitution, empowerment issues, crime and weak state delivery offer little incentive for long-term investment. In terms of economics the strong Rand, volatile markets, water issues, the rising cost of electricity and other inputs make many farming ventures increasingly marginal, a factor which the state appears yet to fully incorporate in its planning.

Predictably these factors have had an impact on the sugar industry, particularly in KwaZulu-Natal, where dryland cane farming has become increasingly marginal over the years. The result has been declining cane supply and mills operating well below capacity, further aggravating the situation. Despite potential for co-generation and other value-adding opportunities, there is no short-term solution in sight.

The group’s strategy has largely been defined by these forces over the past few years, with a focus on settling land claims, supporting the state’s land restitution programme, developing a management services business, exiting from under performing assets, reducing exposure to land ownership in South Africa and further developing our interests in SADC countries outside of South Africa.

As for longer-term strategy, it is the group’s goal to become a major player in the agricultural economy of Southern Africa. In addition to the expansion of its farming operations the group aims to explore value-adding opportunities to increase earnings and reduce volatility. It is our intention also to continue to leverage our expertise in farm management and farm systems to optimise the return from assets under our control.

The implementation of certain key strategic initiatives has been hampered by the delay in the state finalising the purchase of the Komati Estate. This has had a material impact on the earnings for the year, and introduced capital constraints to our investment plans.

It is our goal to establish the group as a preferred employer, not only by offering competitive remuneration and benefits, but also by establishing a supportive and caring culture throughout our operations. In this regard living conditions on our estates, training and management practices are the subject of ongoing attention. We have also recently embarked on a branding exercise aimed at entrenching the group’s values throughout the organisation and confirming a strong “Crookes” culture in our employees at all levels.

The roll-out of company supported clinic services on all estates is continuing, but is constrained by financial limitations, especially such as that experienced in the 2010 financial year. The group’s involvement in corporate social investment activities is ongoing, but is also limited by financial constraints and the dispersion of its operations throughout Southern Africa.