Tongaat Hulett Liquidation Shock: Sugar Industry Warns of Job Losses and Rural Collapse as Growers Urge Rescue

Industry leaders and a sugar farmer say that the provisional liquidation of Tongaat Hulett is a major blow to the industry and have called for Tongaat to be saved.

Tongaat Hulett said in a statement last week that after an extensive and exhaustive Business Rescue process the Business Rescue Practitioners (BRPs) have now filed an application to the High Court seeking to discontinue business rescue proceedings and place Tongaat Hulett's South African operations into provisional liquidation.

Thandokwakhe Sibiya, Chief Operating Officer at South African Farmers Development Association (SAFDA), said that moving from Business Rescue to provisional liquidation is quite scary. When SAFDA's leaders heard about the provisional liquidation on Thursday, they took a plane to Cape Town so that they could speak to decision makers on the sidelines of the State of the Nation Address.

"We are concerned that if the provisional liquidation becomes full scale it means all the three Tongaat Hulett sugar mills will be closed down and sold off," Sibiya said.

Sibiya added that it would mean that 1,500 small scale farmers that supply Tongaat Hulett catchment would have nowhere to deliver their cane.

“There is not enough spare capacity in the existing sugar mills to take on the additional cane. It will spell disaster for livelihoods for rural areas, for local towns and the South African economy. Tongaat Hulett supplies about 27 percent of the local market so it will be a disaster. Our major concern is that this will open the flood gates for more imported sugar to flood South Africa. We are working tirelessly day and night to make sure there is a solution table,” Sibiya said.

Pratish Sharma, a KwaZulu-Natal Sugarcane grower, said that the announcement of Tongaat Hulett going into liquidation is a big concern.

“Should these mills not be able to operate in the future, we are looking at high scale closure of many sugarcane businesses. The businesses employ hundreds of thousands of people and hundreds of thousands of families will be affected by the closure. The impact and closure of Tongaat Hulett will be widespread. There are so many places that are built on the back of sugarcane production and if there was a closure of these towns that are supported by this ecosystem it will slowly collapse,” Sharma said. 

Dr Thomas Funke, the CEO of SA Canegrowers, if liquidation goes wrong, growers and the mills close, growers won't be able to deliver their crops.

“They won't get paid and they won't be able to pay their farm workers or sustain business or keep their doors open. This affects the thousands of workers and growers and could result in massive job losses in rural KZN. We are calling affected parties to sit around the table and find a conclusion and solution to the impasse,” Funke said.

Harold Maistry, President of the Tongaat Civic Association, said the Tongaat Hulett Group is deeply rooted in the KwaZulu-Natal North Coast and has historically functioned as the economic, social, and industrial backbone of the town of Tongaat. “As an agricultural and agri-processing giant, the company has operated for over 130 years, deeply influencing the local community through employment, land development, rural and agricultural support.”

Maistry added that the Maidstone Mill in Tongaat is a major hub, with the Group employing thousands directly and supporting tens of thousands of jobs indirectly in the region.

“The entire South African sugar value chain, starting with growers and flowing through to workers, transporters and downstream industries, will be severely destabilised. The securing of the 15,000+ small-scale growers supplying the mills who face immediate non-payment and potential ruin,” he said.

Maistry said the employees who would be impacted by this liquidation should be protected.

“We support SA Canegrowers' call for the government to fast-track amendments to the Sugar Industry Agreement to protect local producers from foreign competition. The Department of Trade and Industry (DTI) must immediately implement measures against cheap sugar imports, which have severely damaged sales volumes and compounded the crisis. Key actions include securing small-scale farmer payments, facilitating immediate operational continuity at mills to prevent crop rot, and lobbying for urgent import restrictions to protect livelihoods,” Maistry said.

Department of Economic Development, Tourism and Environmental Affairs (EDTEA) MEC Rev Musa Zondi said that the province cannot afford further erosion of one of its core economic sectors.

“KwaZulu-Natal is largely an agricultural province with a diversified industrial base, and the sugar industry is deeply embedded in our rural economy. Tongaat Hulett has long been a backbone of this sector. Any disruption of this scale carries serious consequences for workers, small scale growers and households across our districts,” Zondi said.

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