As South Africa edges closer to the 2026 sugarcane milling season, the future of Tongaat Hulett Limited remains uncertain.
With the Vision Consortium’s 2024 business rescue plan having expired and a liquidation application now before the courts, industry stakeholders are calling for an inclusive, well-funded solution that safeguards both growers and the broader sugar value chain.
Growers push for inclusion
Nkosinathi Msweli, a sugarcane farmer from Kearsney near Stanger, emphasises the importance of growers being part of any rescue plan.
“We will welcome any plan that will rescue Tongaat Hulett. If the plan includes growers, that would be a great plan, as we would be part of it. It is important for us to be part of the value chain, not just suppliers of cane,” he said.
Small-scale farmers like Msweli see the proposed plan not only as a lifeline for the company but as critical for sustaining their livelihoods.
SAFDA calls for timely action
Dr Siyabonga Madlala, Executive Chairman of the South African Farmers Development Association (SAFDA), underscored the need for a timely, inclusive plan.
“We are aware that there is a stop on the implementation of the rescue plan. That is why there is an application for liquidation.”
“We are hoping the parties will find each other before the court hearing, so that if the plan continues, we will support it fully. The plan must include all farmers, especially black farmers, and whoever the partner is must have enough funding to stabilise the company and take it forward,” he explained.
For SAFDA, the stakes are clear that a successful plan must preserve the livelihoods of small-scale farmers and protect the SMEs operating across the sugar value chain, from cane cutters and contractors to haulage operators.
Canegrowers SA highlights systemic risk
Dr Thomas Funke, CEO of SA Canegrowers, warned that an unfunded liquidation could be disastrous.
“Should an unfunded liquidation occur, Tongaat Hulett’s assets would immediately cease production, leaving 18,000 of South Africa’s 28,000 sugarcane growers without functioning mills. Two-thirds of growers would earn nothing for their cane as the 2026 milling season approaches,” Funke told Vutivi Business News.
Higgins Mdluli, chairman of SA Canegrowers, elaborated on the broader implications.
“Tongaat Hulett’s mills are critical infrastructure. Their collapse would immediately affect 40,000 directly employed workers, rural communities, and the broader food and beverage system. Allowing operational continuity to fail would accelerate dependence on sugar imports, exposing South Africa to volatile global prices and exchange rate risks.”
Both Funke and Mdluli argued that a funded, inclusive plan is far more cost-effective than the long-term social, fiscal, and industrial costs of rebuilding a collapsed sugar value chain.
Government and private sector role
The Industrial Development Corporation (IDC) has invested over R2.3 billion since 2022 to keep Tongaat operational. Parties, including the Minister of Trade, Industry, and Competition, Parks Tau, are opposing liquidation, highlighting the systemic importance of Tongaat Hulett.
“The Vision Consortium was the only plan on the table. If another plan emerges that saves Tongaat Hulett, keeps mills open, and ensures farmers are paid, we will support it,” Mdluli said.
Industry voices emphasise that urgent, coordinated intervention is necessary to prevent cascading economic consequences across KwaZulu-Natal, Mpumalanga, and the national food and beverage sector.
The path forward
With the next court date set for April, all eyes are on whether a new or revived rescue plan can stabilise Tongaat Hulett and protect South Africa’s sugar industry. For growers, small-scale farmers, and SMEs reliant on the value chain, time is of the essence.
“We call on the president to coordinate a response to save rural jobs and livelihoods,” Mdluli concluded.
The coming weeks will determine whether Tongaat Hulett can continue as a cornerstone of South Africa’s sugar industry or whether its collapse will trigger far-reaching economic repercussions.
news@vutivibusiness.co.za
