GrowerCo estimates that creditors could realise R3 billion to R4.5bn if Tongaat Hulett is sold and operated as a going concern, against as little as R1bn to R1.5bn in a liquidation, argues the writer.
Image: Supplied
Pratish Sharma
The recent announcement of a grower-led initiative as a possible solution to the Tongaat Hulett liquidation crisis has been more than a decade in the making. And with the court hearing to determine whether the 134-year old company should be liquidated or not, the intent and thinking behind GrowerCo has never been more relevant, or urgent.
Sugarcane grower leaders first conceived and modelled an early iteration of a grower-owned milling vehicle as far back as 2012, but successive shifts in industry and market dynamics meant the moment to implement it never arrived.
After Tongaat Hulett entered business rescue in 2022, it became clear to sugarcane growers that a credible, grower-anchored vehicle could exist to acquire and operate the company as a going concern should other bids fail to deliver. It is a solution that has been envisioned, refined and held in readiness over many years. The current structure and approach, along with the entities formally registered through the Companies and Intellectual Property Commission (CIPC), were constituted in 2023.
In the years since 2022, a structured grower consortium has steadily taken shape, assembling an experienced leadership team, commissioning the necessary legal, regulatory and commercial groundwork, developing an inclusive equity model funded by growers’ own cane feedstock, and engaging funders and stakeholders across the industry. The proposal, now before the KwaZulu-Natal High Court, is the considered product of that long-held vision and sustained, deliberate work.
GrowerCo draws on the organised grower community that supplies Tongaat Hulett’s three mills and refinery on the KwaZulu-Natal north coast -- growers of every scale, from small-scale farmers to large commercial operations. It carries the backing of SA Canegrowers and the South African Farmers’ Development Association (SAFDA), the two industry bodies that together represent the interests of the roughly 17,500 of South Africa’s 28,000 sugarcane growers who deliver to Tongaat Hulett. The GrowerCo proposal carries institutional weight, and is not the wishful thinking of a handful of individuals.
Crucially, GrowerCo is led by people who already run and sustain the sugarcane value chain. Its leadership includes growers who chair Tongaat Hulett mill grower councils, who serve on the industry body boards, and who have spent decades building and governing commercial farming enterprises and the cane-supply system on which the mills depend. They bring governance acumen, financial discipline and deep operational insight into the sugar industry and the wider rural economy. These are not outsiders learning the business; they are the people who supply the cane, work alongside those who operate the mills, and depend on the industry’s survival.
The leadership convened under GrowerCo brings together some of the most experienced figures in the South African sugar industry, including past leadership of industry bodies such as SA Canegrowers and the South African Sugar Association, executives who have built and run major agricultural and milling enterprises, and growers who sit on industry boards and chair Local Grower Councils which represent growers at a mill level. Between them they offer decades of governance, operational and capital-raising experience, in sugar and well beyond it. This is a seasoned, organised leadership advancing a carefully structured proposal, not an ad hoc group reacting to a crisis.
Furthermore, what GrowerCo proposes is, in substance, the continuation of a business that this same grower community has helped keep operating throughout the rescue. Since 2022, growers never stopped delivering cane to Tongaat Hulett, and the mills never stopped running. GrowerCo formalises that reality into ownership through an inclusive stakeholder model: growers of every scale at its core, with deliberate provision for the mill employees on whom daily operations depend. It is the continuation of a going concern by the people who have sustained it, not the arrival of a new and untested operator.
The GrowerCo proposal is built on the long-term sustainability of Tongaat Hulett, with growers as equity partners, and provision for mill employees within an inclusive stakeholder model, rather than an extractive private-equity model. It is focused on maintaining milling operations, safeguarding jobs and preserving economic activity across rural KwaZulu-Natal – a province that accounts for roughly 77% of the sugar industry’s revenue and where Tongaat Hulett underpins between 35,000 and 40,000 direct jobs at farm, mill and refinery level.
The numbers make the case plainly. GrowerCo estimates that creditors could realise R3 billion to R4.5bn if Tongaat Hulett is sold and operated as a going concern, against as little as R1bn to R1.5bn in a liquidation. Under this model, every creditor recovers more. A going concern protects value; a liquidation destroys it.
With the next hearing before the KwaZulu-Natal High Court scheduled for 17 and 18 June 2026, GrowerCo is engaging the business rescue practitioners and the court through the proper legal channels and asks for a fair opportunity to present an implementable, fully governed transaction. We invite the goodwill and support of industry organisations, public and private partners, and the broader community to help secure a future for an asset that is too important to rural South Africa to be dismantled.
Pratish Sharma is a member of GrowerCo and sugarcane grower supplying Maidstone THL mill.
Image: Supplied
* Pratish Sharma is a member of GrowerCo and sugarcane grower supplying Maidstone THL mill.
** The views expressed do not necessarily reflect the views of IOL or Independent Media.
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