The Zimbabwe unit of Tongaat Hulett is navigating operating challenges but has benefited from stronger demand and a stabilising exchange rate.
Tongaat Hulett controls Zimbabwe-listed Hippo Valley Estates, which manufactures sugar for domestic and export markets. Hippo Valley has sugar estates and milling operations.
It said this week that the Zimbabwean business environment for its 2026 financial year had been “characterised by stable exchange rates in the face of tightened monetary policy aimed at controlling liquidity and sustaining the stability” of the local currency.
Zimbabwe has recently battled currency and exchange-rate volatility, with formal businesses suffering pricing distortions and a loss of purchasing value in the local currency.
Notwithstanding the reduced price volatility, Tongaat Hulett’s Zimbabwe unit “saw a significant rise in the price of fuel due to global oil supply-chain disruptions” linked to the Iran-Israel-US conflict.
The Zimbabwean government sought to dilute the impact of higher fuel prices on locally manufactured goods through interventions such as lowering levies and taxes to minimise the negative impact on prices. Hippo Valley Estates expects the pressure on prices “to spread across other commodities in the event that the price escalations” are not contained.
Hippo Valley increased its profit for the year ended March 31 2026 by 79% to $24.1 million (R393.7m), as it benefited from growth in sales, including the contribution of carry-over stocks released during the year.
Operating cash flow for the same period, after interest, tax and working-capital changes, increased by $21m (R343m) to $29.7m (R485m). This was attributable to a strong recovery in sales, particularly in the local market, which generated better margins than exports.
“Consumer spending was strong, with household incomes having improved from the prior year. This was supported by the positive outturn in other industry sectors, which include the tobacco sector, coupled with increased returns from the mining sector following a massive resurgence in the prices of gold, platinum, silver and chrome,” said Hippo Valley Estates CEO Tendai Masawi.
He added that liquidity had generally improved in the economy, although it was dominated by deliberate monetary tightening as the Zimbabwean central bank took a position to support local-currency stability in a market characterised by widespread use of the US dollar as the dominant unit of exchange.
To navigate this environment, Hippo Valley maintained “win-win arrangements with suppliers of goods and services to ensure the business is not short-changed on key” requirements. These include rail logistics for sugar transportation, power supply, critical spare parts and agricultural inputs.
Hippo Valley’s local sugar sales strengthened on the back of a high-volume pipeline, consistent growth in recurring revenues and strong customer retention. Local sales also generated higher margins compared with low-priced exports, the company said.
Tongaat Hulett’s units in Zimbabwe control more than 90% of the domestic sugar market. It engaged in campaigns with government authorities against smuggled and counterfeit products, which resulted in a “visible decrease in non-conforming products” on the domestic market.
“The regulatory interventions positively contributed to stabilising market dynamics against previous price distortions,” said Masawi.
The export market, mainly into Mozambique, was affected by logistical challenges, including limited rail wagons, flooding caused by rainfall that impaired rail infrastructure, and intermittent truck supplies.
Nonetheless, Hippo Valley’s sugar exports exceeded the previous year’s performance by 114%, although some contracted export volumes could not be delivered and were deferred because of challenges moving sugar exports to Mozambique.
THE NATIONAL