As many as 18 000 sugarcane growers are immensely relieved that beleaguered sugar milling giant Tongaat Hulett will soon start milling their harvests for the 2026-’27 season. However, the 134-year-old company’s long-term future still hangs precariously in the balance.
By Lloyd Phillips, senior journalist at African Farming and Landbouweekblad
The Industrial Development Corporation (IDC) came to the rescue at the last minute with a R200 million extension to the already R2.3 billion post-commencement funding facility that it had extended to Tongaat Hulett and its proposed buyer, the Vision Group, during the now failed business rescue process.
According to a statement from Tongaat Hulett, this additional R200 million will enable the company to fund all processes required to get Tongaat Hulett’s Felixton, Maidstone and Amatikulu sugar mills along KwaZulu-Natal’s North Coast fully ready to start accepting and processing sugarcane for the imminent start of the 2026-’27 season.
Also read: ‘Jobs bloodbath’ warning as major players fight Tongaat Hulett liquidation crisis
Application for Provisional Liquidation
After the Vision Group’s acquisition plan for Tongaat Hulett fell through earlier this year, the latter’s business rescue practitioners (BRPs) applied to the Durban High Court for Tongaat Hulett to be placed into provisional liquidation. This caused immense concern all the way from South Africa’s approximately 27 000 sugarcane growers up to the country’s ministries of agriculture and trade, industry and competition.
The Durban High Court was scheduled to sit on 16 and 17 April to hear arguments for and against placing Tongaat Hulett into provisional liquidation.
The South African Farmers Development Association (SAFDA), which represents the interests of small-scale sugarcane growers, says during the first day of the hearings, Judge Rithy Singh was made aware of the R200 million further provided by the IDC and that this would enable Tongaat Hulett to open for the 2026-’27 milling season.
Singh decided to adjourn the hearings regarding Tongaat Hulett’s provisional liquidation, to be heard on 17 and 18 June.
More Time to Hopefully Find a Solution
Tongaat Hulett states: “This adjournment provides additional time for the company, together with its BRPs and stakeholders, to continue engaging constructively with the objective of reaching a longer-term solution that is in the best interests of the business, its employees and all stakeholders.”
SAFDA welcomes the adjournment and points out that Singh said that “it would not be in the best interest of the people of KwaZulu-Natal for Tongaat Hulett to be placed under liquidation.
“The court further recognised the critical role played by Tongaat Hulett, describing the company as a lifeline to the province’s economy.”
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Jobs and Communities at Stake
Dr Thomas Funke, chief executive officer of the South African Canegrowers Association, which represents the interests of all the country’s approximately 27 000 growers, says the R200 million comes “as a massive relief to the 18 000 sugarcane growers in KwaZulu-Natal who rely on Tongaat Hulett to mill their sugarcane.
“Thousands of jobs and entire rural communities depend on these operations, and the agreement helps safeguard that economic lifeline, at least until a sustainable solution to the Tongaat Hulett business rescue process can be negotiated.”
SAFDA is urging all decision-makers and stakeholders in Tongaat Hulett’s future to “prioritise stability” within South Africa’s sugarcane value chain.
African Farming has previously reported that although the Vision Group’s business rescue and acquisition plans for Tongaat Hulett have seemingly fallen through, a previously unsuccessful bidder for the company, namely RGS Group Holdings, is still interested in acquiring Tongaat Hulett out of business rescue.
Whether and by whom Tongaat Hulett is ultimately successfully rescued and acquired remains unknown at this stage.
Also read:
Rejected suitor still determined to secure Tongaat Hulett’s hand
‘Tongaat Hulett liquidation must be last resort’ – government
WATCH | Sugar industry in crisis – KZN’s premier pushing to save Tongaat Hulett
