Material flow cost accounting practices and resource efficiencies in South African sugar industry.

Doctor of Philosophy in Accounting. University of KwaZulu-Natal, Durban, 2019.Given the backdrop of inefficiencies and declining productivity in the South African sugar industry, this study examined material flow cost accounting (MFCA) as a decision-making toolkit for improving resource efficiency in the industry. This was considered with three distinct objectives, namely: to establish which factors determine the quality of sucrose in sugarcane production; to demonstrate the potential environmental and economic benefits of cleaner production processes and technologies in the sugar milling industry, and to examine the effectiveness of adopting the MFCA framework approach as a decision-making tool in the supply chain to improve overall performance of the sugar industry. Data were collected from a panel of the six sugar milling firms that are operating in the South African sugar milling industry. For the first and second objectives, the panel auto regressive distributive lag (P-ARDL) estimating technique was adopted while models from literature were employed to access the efficiency of the implementation of MFCA as an important alternative to the conventional accounting process in the third objective. A system generalized method of moments (GMM) estimation technique was also used to estimate the impact of sucrose content on profitability. As well, a random effect regression model was employed to examine the relationship between material flow cost accounting and resource efficiency. Besides the aforementioned methods, detailed conceptual issues relating to cleaner production were identified and addressed. Taking the sugar cane industry in South Africa as the study focus, an alternative measure that enhances the quality of sugar, particularly that of sucrose, was investigated. Findings from the study revealed that certain factors, such as transportation and loading delay, not only contribute to losses in sucrose, but also affect the farmers’ yields due to increase in deterioration of cane sugar. Specifically, the result of objective one revealed that, both in the short- and long- runs, most of the variables investigated have the tendency of increasing the sucrose level in sugar cane while an increase in other variables would decrease sucrose level altogether. However, the impact of soil water content (100mm) appears not to be statistically significant on sucrose production in the short- and long-runs. Of special interest is stalk growth (of sugar cane) and average temperature, as their values are more significantly germane as regards to the quantity of sucrose obtained for sugar cane processing in South Africa. The study further used a structural equation model to examine the relationship between cleaner production and firm performance, which was measured by environmental, operational and financial performance. The hypothesis tested supported that cleaner production had a positive and significant influence on the environmental, operational and financial performance of the firms in the sugar industry. Results from the last two objectives of the study provide evidence to support the conclusion that the effective MFCA implementation process supports increased efficiency in the sugar cane industry as well as cleaner production. The study also found that sucrose content has a positive and significant impact on the profitability of the firms. As well, the evidence showed that material flow cost accounting has a positive relationship with resource efficiency. This study, therefore, recommends the proficient use of MFCA among the South African industries as they possess the quality of classifying product cost from waste cost, hence, improving profitability and organizational efficiency. The contribution of this study lies in the researcher’s capability to model the MFCA process for minimizing the applicable costs of the sugar industry for optimal performance

The Effectiveness Of Material Flow Cost Accounting (Mfca) In Identifying Non-Product Output Costs And Its Impact On Environmental Performance In Paper Manufacturing Companies: A Case Study In Kwa-Zulu Natal

This paper analyses the effectiveness of adopting the Material Flow Cost Accounting (MFCA) approach to highlight non-product output costs and assist managers in their strategic decision making processes with regard to implementing cleaner production processes. Manufacturing companies spend large amounts of money investing in end-of-pipe- treatments in order to improve the environmental performance rather than adopting cleaner production technology and techniques. Cleaner production (CP) is perceived by management as a costly strategy that requires innovation with no financial returns to the company in the short-term. Conventional costing systems do not take into consideration the ‘true’ value of non-product outputs. A case study was performed on a paper and pulp manufacturing company in Kwa-Zulu Natal which provides evidence that MFCA technique highlights the value of non-product output costs enabling managers to assess the financial and environmental benefits of adopting CP techniques and technologies.   The scope of this research was limited to the steam production process which generates large amounts of boiler ash containing approximately 20% of unburned coal. It had been concluded that the company should integrate MFCA with the current EMS system to ensure their future sustainability

The effect of COVID-19 in estimating the South African real spot-rate curve

This study investigates the dynamism of different mathematical term-structure models during COVID-19 to estimate the South African real spot-rate curve. The study is based on term-structure models following Nelson-Siegel framework; and  further incorporates the recalibration process on static term-structure models over different economic environments. It was found that the recalibration methodology resulted in no improvements on Linear-parametric and Cubic-splines term-structure models. However, the recalibration effect on Nelson-Siegel and Svensson models resulted in an improved fit for South African inflation-indexed spot rates even in periods of heightened market risk

The role and perception of accountants on environmental management accounting in an emerging market: Study on South Africa’s companies.

This research explores the role and views of accountants in environmental management accounting (EMA) and environmental performance. The study relied on a survey of 86 chief finance officers, accountants and finance managers from the top 40 listed South African companies. The chief finance officers, accountants and finance managers confess that they lack understanding on in what way environmental issues can be incorporated into EMA. In addition, the professionals disclose that EMA has not had an ample consideration by their companies. This suggests that a limited involvement by the accountants in EMA in South Africa exists. Hence, the sampled chief finance officers, accountants and finance managers indicated that they are not sure of their potential responsibility. This shows that South African accountants are noticeably absent from participating in EMA. This has been ascribed to EMA being a new branch of accounting, their little aptitude in environmental issues and also the voluntary nature bestowed on EMA practices. Therefore, this paper will increase literature on the views of accountants on EMA from a developing country’s perspective

South African Sucrose Quality in Sugar: Determinants and its Empirical Implications

The study investigates which factors determine sucrose quality in the South African sugar cane production process. Though South Africa is the 8th largest producer of sugar cane in the world and the highest in Africa, a decline has been observed in the production of high quality sugar in the country. The study adopts the Auto Regressive Distributive Lags (ARDL) technique to analyze sugar cane production time series data from 1980 to 2016 in South Africa. Ten variables were tested, including Average Temperature, Stalk growth, Evaporation, and Soil Water Content (100mm). Our findings revealed that on both the short and long run, some of the variables investigated have the tendency of increasing sucrose level in sugar cane while an increase in other variables would decrease sucrose level altogether. However, the impact of Soil Water Content (100mm) appears not to be statistically significant on sucrose production in our regression model in the short and long run. Of special interest are Stalk growth (Reference sugar cane) and average temperature, as their values are more significantly germane as regards the quantity of sucrose obtained during sugar cane processing in South Africa.&nbsp

Using DuPont analysis to assess the financial performance of the top 3 JSE listed companies in the food industry

This study attempts to measure the financial performance of the food industry taking the top three JSE listed companies Pioneer Foods, Tiger Brands and RCI for the period of 2013-2014. In order to achieve the objectives of this research, ratios such as return on equity (ROE), return on assets (ROA) have been calculated by applying the DuPont analysis. The DuPont analysis is an important tool to measure the operating performance of a firm (Sheela and Karthikeyan, 2012). The volatility of the stock market makes investment decisions a controversial issue for most investors. Investments of huge amounts of money need proper analysis in order to make an informed decision. Financial statements are indicators of the profitability and financial sustainability of the business. Ratios are tools used to quantify the risk element before making any strategic decisions, more especially, investment decisions. It has been reported to be one of the most important financial ratios, because it provides investors with a more comprehensive measure of performance (Demmer, 2015). A detailed financial analysis of all three companies using the DuPont system shows that investing in Tiger Brands would generate a higher return to shareholders than Pioneer Foods or RC