Tongaat Hulett crisis: Sugarcane growers ask help to save SA’s oldest sugar giant from liquidation

A grouping among the 17 500 growers supplying sugarcane to Tongaat Hulett, which is facing possible liquidation, is keen to acquire the company’s milling, refining and value-adding assets to ensure their important operations never cease. Goodwill support from the public and private sector and the state is requested to help achieve this.

By Loyd Phillips, senior journalist at African Farming and Landbouweekblad

GrowerCo comprises numerous growers across all production scales, supplying sugarcane to Tongaat Hulett’s three mills on KwaZulu-Natal’s north coast. It was established in late 2022, immediately after the company went into voluntary business rescue, to possibly acquire Tongaat Hulett should there be no successful alternative bids.

Hope emerged when the Vision Consortium (Vision), led by South African billionaire Robert Gumede, was accepted as the preferred bidder. However, amid legal challenges, Vision’s business rescue plan lapsed earlier this year. Tongaat Hulett’s business rescue practitioners were reportedly obliged to file for provisional liquidation of the 134-year-old company.

From President Cyril Ramaphosa down to grassroots sugarcane growers, are all concerned. Only a recent further R200 million emergency loan from the Industrial Development Corporation (IDC) enabled Tongaat Hulett to finish the off-season maintenance needed to reopen for the 2026-’27 sugarcane milling season.

The Durban High Court is still hearing arguments for and against Tongaat Hulett’s liquidation.

GrowerCo said in a statement: “With the next liquidation hearing of Tongaat Hulett less than a month away and no firm solution to avoid liquidation in sight, GrowerCo intends securing the funding necessary to keep Tongaat Hulett’s mills and refinery operational, without which many parts of the sugar industry would collapse.”

The grouping estimates it could raise or guarantee an initial R3 billion to R4.5 billion towards acquiring Tongaat Hulett Sugar South Africa as a going concern. It also estimates that possibly as little as R1 billion would be recovered from a liquidated Tongaat Hulett.

Also read: ‘Massive relief’ as IDC’s R200 million guarantees start to Tongaat Hulett sugarcane milling season

Opportunity for Own Control

“An acquisition by GrowerCo creates the possibility that a sugarcane grower who today owns and farms their own land, but whose forebears may once have worked as indentured labourers in the province’s sugar fields, could become an owner in one of South Africa’s oldest sugar companies,” says Nicholas Ngobe, a grower supplying sugarcane to Tongaat Hulett’s Amatikulu Mill.

Pratish Sharma is a sugarcane grower, chairperson of the local grower council of Tongaat Hulett’s Maidstone mill, a board member of the South African Canegrowers Association and a member of GrowerCo.

“GrowerCo is a stakeholder-inclusive plan to avoid a liquidation scenario and to ensure that Tongaat Hulett’s South African sugar operations can continue as a going concern,” he says.

“It has been designed by the people who supply the cane, operate the mills and depend on the industry, and is built around patient capital and a model of reinvestment. GrowerCo would also be a beacon of real transformation in South Africa by including small-scale growers at ownership level.”

With the goodwill and support of industry organisations, private and public partners, and ordinary people, GrowerCo hopes to persuade the court and the business rescue practitioners to give it a fighting chance to acquire Tongaat Hulett.