Zimbabwean Hippo Valley applies to supply local ethanol market

Hippo Valley Estates, a sugar producer based in Chiredzi, Zimbabwe, has announced it has reached an ethanol production capacity of 41 million litres per month and is now applying for a licence to supply the local market.

Zimbabwe requires a monthly supply of 50 million litres of petro, of which 7,5 million litres is ethanol under the country’s E15 blending mandate.

Hippo Valley is looking to supply specific market segments, but the unavailability of cash in the economy is constraining the uptake of its products.

The lack of funding has lead the company to look into producing ethanol, a by-product of sugar cane, as a way to generate additional revenya.

According to managing director Sydney Mtsambiwa the only remaining hurdle in the plan is getting the necessary regulatory approval to produce ethanol for the domestic Zimbabwean market.

‘As soon as we can get our way around the regulatory side of issues, then we will be able to ramp up operations to meet specific demand,’ Mtsambiwa says.

In the last financial year, which ended on 31 March, Hippo Valley reported an operating profit and net profit of $16.2 million (€14.3 million) and $7.3 million respectively.

This was down from $19.1 million and $9 million respectively in the prior period in 2014.

The loss in revenue is largely due to the significant recovery in the local market sales volumes at higher returns when compared to realisations from the depressed EU exports.

Sugar production decreased by 5% to 228,000 tonnes from 239,000 tonnes in 2014 as a consequence of no cane deliveries from Green Fuel, an independent ethanol producer in Chisumbanje.