The voices in government expressing concern about the potential liquidation of the sugar milling giant Tongaat Hulett keep growing. The Department of Trade, Industry and Competition (DTIC) believes liquidating the company should only be considered if all other avenues of business rescue have been exhausted.
By Lloyd Phillips, senior journalist at African Farming and Landbouweekblad
Parks Tau, the Minister of the DTIC, says his department and other organs of state will oppose efforts to have Tongaat Hulett placed under provisional liquidation. The DTIC will, instead, “support all lawful efforts aimed at finding a viable and durable resolution” to keep the long financially beleaguered company operational.
Tongaat Hulett has been in voluntary business rescue since 27 October 2022. There was light on the horizon when, on 11 January 2024, an acquisition plan by the Vision Consortium (Vision), comprising a multinational group of investors, was approved by Tongaat Hulett’s creditors and other stakeholders.
Also read: Sugar industry faces devastating crisis: Tongaat Hulett heads for liquidation as Vision Deal collapses
However, this plan subsequently officially fell through on 7 February 2026. Key factors that reportedly led to this include Vision and the Industrial Development Corporation (IDC) being unable to reach an agreement on refinancing the latter’s original R2.3 billion post-commencement funding loan to the former, the unresolved legal dispute over the approximately R517 million that Tongaat Hulett reportedly still owes to the South African Sugar Association (SASA) and the sale agreement with Vision lapsing on 7 February.
Vision reportedly subsequently issued a letter of demand to Tongaat Hulett’s business rescue practitioners for immediate repayment of approximately R11.7 billion in debt that Vision had accumulated during its efforts to acquire Tongaat Hulett. This prompted the business rescue practitioners to apply to the Durban High Court in KwaZulu-Natal for Tongaat Hulett to be placed under provisional liquidation.
The court is scheduled to hear the application on 27 February.
Government to Intensify Engagements
African Farming recently reported that the application for Tongaat Hulett’s provisional liquidation has created rapidly growing consternation throughout South Africa’s sugarcane value chain and up to the highest levels of government.
Tongaat Hulett has three sugar mills and one sugar refinery that reportedly employ more than 2 600 people in KwaZulu-Natal. The company can process up to 4.8 million tonnes of South Africa’s approximately 17 million tonnes of sugarcane harvested annually. This sugarcane is collectively supplied by as many as 15 000 of the country’s more than 25 000 sugarcane growers, most of whom are at small scale.
If the company were to shut down, the cascading socioeconomic impacts on the tens of thousands of direct and indirect jobs, and on the hundreds of thousands of dependants of these workers, would be catastrophic.
Also watch: Sugar industry in crisis – KZN’s premier pushing to save Tongaat Hulett
The DTIC says: “The collapse of this ecosystem would deepen economic distress in already vulnerable communities and undermine years of investment in transformation, industrial capability and agricultural development.
“The DTIC believes that Tongaat Hulett remains capable of being stabilised and restructured through a sustainable solution that balances the interests of workers, growers, communities, creditors and the country. Government will intensify its engagements with all stakeholders, including the IDC […], financiers [and] investors to explore solutions that ensure the survival of the company and the long-term sustainability of the sugar sector.”
Minister of Agriculture John Steenhuisen, KwaZulu-Natal Premier Thami Ntuli and Reverend Thulasizwe Buthelezi, MEC for Cooperative Governance and Traditional Affairs in this province, have also called for Tongaat Hulett to be saved.
Buthelezi has personally called on the business rescue practitioners, investors and all other stakeholders in Tongaat Hulett “to prioritise dialogue and place the welfare of workers, farming communities and traditional leadership areas at the centre of all decisions”.
Also read and watch: Steenhuisen ‘seriously concerned’ about provisional liquidation application for Tongaat Hulett
