Illovo Sugar Malawi secures US$45M loan to boost production, stabilize market prices 

MALAWI – Illovo Sugar Malawi (ISM) Plc has announced plans to increase sugar production and stabilize market prices after receiving approval from shareholders to secure a US$45 million loan from its majority shareholder, Sucoma Holdings Limited (SHL). 

Board chairperson Jimmy Lipunga revealed the development in Blantyre on Tuesday during an extraordinary general meeting (EGM). He noted that the financing will address persistent foreign exchange shortages that have significantly hindered the company’s operations in recent years. 

“Given these challenges, the Group is unlikely to generate or source adequate foreign currency to service its obligations in the short to medium term,” Lipunga stated.  

“The shareholder loan will ease pressure on internally generated and locally sourced foreign currency, preserving our financial flexibility and allowing us to focus on long-term strategic investments and value creation initiatives.” 

According to the board, the loan will be directed toward settling intercompany payables currently estimated at US$72 million. These debts are owed to subsidiaries and related parties of Associated British Foods (ABF) Plc, including Illovo Sugar Johannesburg and Illovo Group Marketing Services.  

The payables arose from procurement of essential machinery and services on behalf of Illovo Malawi, with balances accumulating over the past four years due to limited forex inflows. 

Lipunga emphasized that the US$45 million financing will provide immediate relief. “Sucoma Holdings has effectively paid US$45 million on behalf of Illovo Sugar Malawi. 

This will ease our pressure, enable us to scale up sugar production, and ultimately stabilize commodity prices. Importantly, there is no set repayment deadline under the agreement,” he added. 

The move was welcomed by minority shareholders. Frank Harawa, Secretary General of the Minority Shareholders of Listed Companies (MISALICO), described the resolution as a progressive step for both the company and consumers.  

“We voted for the loan because it is critical to increasing production and reducing sugar prices, making the commodity more affordable to Malawians,” Harawa said.  

However, he urged Illovo to tighten security measures against sugar smuggling, which undermines supply and pricing in the local market. 

Founded in 1965, Illovo Sugar Malawi remains the country’s oldest sugar producer and continues to play a pivotal role in meeting national demand despite ongoing operational challenges. 

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