Sugar cane industry in SA to shed 35,000 jobs

CAPE TOWN, Jan. 18 (Xinhua): Faced with the possibility of electricity fee hikes, the sugar cane industry in South Africa is expected to shed as many as 35, 000 jobs, furthering worsening high unemployment rate in the country, the SA Cane Growers' Association said yesterday. The association issued the statement amid public hearings on a plan by state-run electricity utility Eskom to increase electricity fees by 16 per cent. Due to the unability to pay electricity fees, four mills would be forced to close, the association's financial affairs director Thomas Funke said at a public hearing held by the National Energy Regulator of SA (NERSA) in Durban. The hikes in electricity fees would hit the sugar cane industry which employs 350,000 people, with an annual profit of 10 billion rand (about 1.2 billion U.S. dollars). There would be a 19.4-per cent loss of income in the industry if the increase was granted, Funka said. An increase higher than inflation was not possible for the association to digest, Funke said. "We believe the increase is not appropriate and not affordable. A double digit increase will have serious impact on net returns." A survey published on Thursday by the South African Press Association shows that for 10 energy intensive companies electricity accounted for 37.04 per cent of their operating costs. The survey reveals that with the proposed electricity price increase, operating costs would increase by on average 6.83 per cent a year, and that as a result, two-thirds of the smelting companies may have to close down. As a result, more people would join the swelling force of the unemployed.