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Impact of multi-billion move from sugar to corn syrup

Genesis was appointed to evaluate the economic pros and cons of a multi-billion-rand mega-transaction in the FMCG sector.

Two of the world’s biggest consumer goods brands wanted to build a new multi-billion-rand production plant and switch from using sugar to corn syrup produced from maize.

The transaction was one of the biggest BEE deals in history and would also source one third of maize from emerging farmers.

Genesis was appointed to undertake an independent assessment of the economic costs and benefits of the new project, measured in a net contribution to GDP and employment.

Genesis was also asked to evaluate whether the deal would be good for transformation of the economy and what impact it would have on food security.

Our work found that the project would create a net positive growth of the economy, and would be a net positive for transformation. This had to be balanced, however, by harm done to the sugar industry. It was net neutral for food security.

The independent report was used to present the pros and cons of the project to the policy-makers to secure government and regulator support for the transaction.

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