SA Canegrowers has welcomed the agreement reached between the Industrial Development Corporation (IDC) and the Vision consortium, saying the deal removes the immediate threat of liquidation hanging over Tongaat Hulett and provides renewed certainty for thousands of growers, workers and communities linked to the sugar industry.
By Maile Matsimela, digital editor at African Farming
The agreement paves the way for the implementation of Tongaat Hulett’s business rescue plan after Vision and the IDC reached consensus on future funding arrangements. As part of the agreement, the business rescue practitioners have withdrawn the liquidation application against the company.
Also read: Tongaat Hulett avoids liquidation as IDC and Vision strike deal
Relief for growers and workers
According to SA Canegrowers, the agreement provides short-term funding to keep Tongaat Hulett operating while creating a pathway for Vision to assume ownership of the company’s assets and guide its eventual exit from business rescue.
SA Canegrowers chairman Higgins Mdluli said the development was an important milestone for the South African sugar industry.
“This agreement is a significant milestone in securing the future of the modern South African sugar industry. With the liquidation of Tongaat Hulett off the table, we hope that its mills and refinery can now focus on operating without interruption. More than 17 500 supplying sugarcane growers rely on Tongaat,” said Mdluli.
The organisation said the agreement protects jobs and livelihoods across the sugar value chain by averting the immediate risk of liquidation.
Key player in the sugar industry
Tongaat Hulett remains one of South Africa’s most important sugar industry players, operating three sugar mills and the country’s largest standalone white sugar refinery.
The company has been part of the South African sugar sector for more than 130 years and forms a key component of an industry that supports more than one million livelihoods.
SA Canegrowers noted that Tongaat’s continued operation is vital for maintaining stability in rural communities and ensuring uninterrupted processing capacity for growers supplying cane to its mills.
Also read: Tongaat Hulett crisis: Sugarcane growers ask help to save SA’s oldest sugar giant from liquidation
Recognition of the industry’s importance
Mdluli thanked government, particularly the Department of Trade, Industry and Competition and the IDC, for supporting efforts to keep the company operational during the business rescue process.
“We would like to thank the government, especially the Department of Trade, Industry and Competition, and the IDC, for recognising the significance of the sugar industry to the national economy,” he said.
“Tongaat Hulett’s mills have continued to be operational, even as the liquidation hearing was looming, in part owing to bridging funding from the IDC.”
Also read: ‘Massive relief’ as IDC’s R200 million guarantees start to Tongaat Hulett sugarcane milling season
Focus shifts to industry challenges
While welcoming the agreement, SA Canegrowers said the industry must now focus on addressing other pressing challenges affecting local sugar producers.
Mdluli highlighted the continued influx of imported sugar into the South African market as a major concern.
“As a unified industry, we can also address other immediate challenges facing us, especially the still persistent flood of imported sugar into South Africa. Unfairly subsidised sugar from countries such as Brazil and Thailand is currently displacing locally produced sugar from retailers and food and beverage manufacturers. This affects growers and local millers alike – including Tongaat Hulett,” he said.
SA Canegrowers said it looks forward to working with all stakeholders to secure a stable and sustainable future for the South African sugar industry.
Also read: ‘Tongaat Hulett liquidation must be last resort’ – government
