By Nicholas Bariyo
Special to DOW JONES NEWSWIRES
KAMPALA--Output at Zambia's largest sugar producer, Zambia Sugar
PLC (ZSUG.ZM), has been paralyzed following a workers' strike over
a wage dispute, the company announced Wednesday.
The company, a unit of South Africa-based Illovu Sugar Ltd.
(ILV.JO), Africa's largest sugar producer, said around 3,000
workers went on strike Tuesday after weeks of bickering over wages,
with a company spokesman warning that striking working could be
dismissed.
"This is an illegal strike because the dispute is before court
and there is no ruling yet," he said.
Tensions have been growing at the plant following the collapse
of labor talks in May. The workers are demanding a 35% pay rise
which management has rejected. Management referred the matter to
the industrial court of Zambia in May and the court is yet to make
a ruling.
Union representatives addressed the workers Wednesday and urged
them to end the strike, but their appeals fell on deaf ears,
according to company officials. Union representatives could not be
reached for an immediate comment.
The plant exports 50% of its output to destinations including
the E.U., with sugar and corn Zambia's main foreign revenue earners
after copper and cobalt. Zambia's domestic sugar consumption is
estimated at 150,000 tons and the country's sugar industry is self
reliant.
Last week, workers placed notices around the plant advising
unionized workers not to report for work this week.
The Zambian police said last week said that suspected
disgruntled workers set ablaze a section of Zambia Sugar PLC
plantation, damaging around 50 hectares of cane plantations.
In 2010, the company commissioned a plant and farmland expansion
project at a cost of $174 million, which doubled mill capacity and
increased plantation area by 9,000 hectares.
The company said in March that its 2012 output would rise to
around 400,000 metric tons from 375,000 tons produced last
year.
Write to Nicholas Bariyo at Nicholas.Bariyo@dowjones.com