SA Canegrowers warns the KwaZulu-Natal High Court hearing on the potential liquidation of Tongaat Hulett will mark a key moment for the sugar cane industry.
Image: Simphiwe Mbokazi/Independent Newspapers
The looming KwaZulu-Natal High Court hearing on the potential liquidation of Tongaat Hulett is being described as a defining moment for South Africa’s sugar cane industry, with thousands of livelihoods hanging in the balance.
SA Canegrowers on Thursday raised serious concerns ahead of the hearing, scheduled for Thursday and Friday, warning that the outcome could have devastating consequences for rural economies.
The company’s business rescue practitioners filed for provisional liquidation in February after a proposed sale agreement with the Vision consortium fell through.
Key stakeholders, including SA Canegrowers, the Department of Trade, Industry and Competition, the Industrial Development Corporation (IDC), and Trade and Industry Minister Parks Tau, are opposing the liquidation application.
At the heart of the concern is the heavy reliance of sugarcane growers on Tongaat Hulett’s milling operations. SA Canegrowers estimates that more than 18,000 growers—most of them small-scale farmers—depend exclusively on Tongaat’s mills to process their crops.
“This year’s milling season has already opened for sugarcane growers in other regions, but growers who are served by Tongaat Hulett mills are still waiting to hear when the mills will reopen,” said SA Canegrowers.
SA Canegrowers added that Tongaat Hulett has been in business since October 2022 and has remained operational throughout.
Earlier this year, the company’s business rescue practitioners filed for provisional liquidation after the sale agreement with the Vision consortium lapsed.
Among those opposing the provisional liquidation are: SA Canegrowers, representing almost 30,000 sugarcane growers, the IDC, which provided over R2.3 billion in funding during the business rescue process, and Minister Tau.
Higgins Mdluli, chairman of SA Canegrowers, said that the liquidation of Tongaat Hulett affects the entire sugar industry and is a direct threat to tens of thousands of rural jobs and livelihoods.
“For SA Canegrowers, safeguarding these communities must come first,” he said. “The cost of preserving these operations is far lower than the long-term economic and social damage of allowing a viable milling business to collapse.”
Mdluli added that Tongaat Hulett is a key contributor to South Africa’s economy and to the stability of rural communities.
“Tongaat Hulett operates three sugar mills and is the country’s only standalone refiner of white sugar. White sugar is used in beverages, biscuits, and confectionery,” he said.
“As such, it is a cornerstone of the national sugar value chain, which supports more than one million livelihoods – from small-scale and large-scale growers to mill workers, transporters, and food and beverage manufacturers.”
SA Canegrowers said that should Tongaat Hulett enter unfunded liquidation, it would force the large commercial beverage and snack manufacturers to rely solely on imported white sugar, exposing the local economy even more to the instability of global sugar prices and severely threatening the viability of the entire local sugar industry.
SA Canegrowers noted that Tongaat Hulett has not yet entered formal liquidation.
“Stakeholders, including SA Canegrowers, are actively engaged in discussions to explore options that may prevent liquidation entirely. But, if liquidation becomes unavoidable, SA Canegrowers believe that a funded liquidation.”
BUSINESS REPORT