Tongaat Hulett gears up for a strong 2025/26 sugar season with R460 million infrastructure investment

Tongaat Hulett on Thursday said it was primed for the 2025/26 sugar season, with operations set to commence smoothly in April and early May, following an extensive off-season maintenance programme.

The sugar producer said a significant investment of R460 million has gone into improvements at its Maidstone, Amatikulu, and Felixton mills, its central refinery in Durban, and the Voermol animal feed facility.

It said this financial commitment was a testament to its dedication to operational excellence, ensuring that they can welcome sugarcane deliveries from growers as the season begins.

As the sugar industry faces challenges such as declining global prices, job losses induced by the sugar tax, and insufficient import tariffs that allow for increased sugar imports, Tongaat Hulett said it remained resolute in maintaining a seamless and efficient milling operation.

The company said it not only supports its growers but also plays a vital role in sustaining the surrounding sugar community, which relies heavily on the industry for its livelihood.

"The company’s South African operations contribute around R9.3 billion to the country’s GDP each year and it directly employs over 2 600 people – supporting more than 25 500 jobs in communities surrounding its three mills, refinery and animal feeds plant," it said.

"More than two-fifths (43%) of the sugarcane processed by THL mills is sourced from 15 000 black cane growers and cooperative members with these farmers collectively paid around R500 million each year." 

The company said it was also making strides in its ongoing business rescue process, which is progressing towards successful implementation. Financial support from the Industrial Development Corporation (IDC) has been crucial, allowing Tongaat Hulett to stay operational during this challenging period.

The IDC funding has facilitated essential off-crop maintenance on the mills and refinery, with Tongaat Hulett dedicating R1.425bn to reinforcing its infrastructure over the past three financial years—allocating R472m in 2022/23, R493m in 2023/24, and R460m in 2024/25.

Tongaat Hullet' said this substantial investment underscored its commitment to maintaining world-class facilities and enhancing operational performance for the benefit of growers, employees, and industry stakeholders.

The recent off-season maintenance has led to significant upgrades at the mills, including boiler enhancements, which improve steam efficiency and ensure consistent factory performance while also addressing environmental compliance. Additionally, funds have been directed towards Front-End equipment improvements to optimise sugar extraction and refine Back-End processing at the plants.

In line with a legally binding business rescue plan—which incorporates the transaction with the Vision Parties and gained approval from over 98% of creditors on 11 January 2024—the closure of the South African sale of assets transaction is approaching. Tongaat Hulett said this step was pivotal for securing the long-term sustainability of its operations and effectively implementing the business rescue plan.

"The business rescue process has provided a critical lifeline to all stakeholders invested in the rehabilitation and long-term survival of the business, people and assets of Tongaat Hulett, and avoided the devastation that liquidation in October 2022 would have wrought on local communities, the broader industry and the economy," it said.

"As the 2025/26 sugar season begins, we look forward to working closely with our growers, employees, and industry partners to build a more resilient and competitive sugar sector. With continued investment in infrastructure, operational efficiencies, and strategic partnerships, THL is well-positioned to drive sustainable growth and innovation in the industry."

BUSINESS REPORT