Sour end to SA sugar icon

The potential liquidation of Tongaat Hulett is about more than just the company – there’s a broader economic implication that makes this ‘a very difficult and potentially explosive situation that requires calm heads’: Independent analyst Dave Woollam. JIMMY MOYAHA:We move on to the Tongaat conversation, which has been a story we’ve been keeping an eye on for the longest time. Sadly we are heading down a path we have been trying to avoid – and that is the path of liquidation.

We’re going to look at this in a little more detail with independent analyst Dave Woollam – who we’ve previously had on the show – to look at the tangled conversation. Dave, lovely to have you back. Thanks so much for taking the time.

The last time you and I spoke, we were in the thick of business rescue. There were moving parts. We were trying to make sense of where we end up, and we were looking at things like the sugar tax, the rebates and all manner of conversations around Tongaat Hulett.

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It looks as though we have finally concluded what would be the business-rescue proceedings and liquidation. The undesirable outcome is where we stand. DAVE WOOLLAM:Good evening, Jimmy.

Thank you for having me. Yes, it is a very sad day that some nearly seven years after the first, I guess, cracks within the Tongaat group were exposed, we’ve got to this point – two years into the business rescue and there doesn’t appear to have been a solution found. I think it’s a very risky situation, because the broader economic implication for the region as a whole, some R5 billion worth of sugar has been paid – or R5 billion has been paid – to the farmers in the North Coast region that falls under the Tongaat Mills for their cane.

And cane is just not a product that can be transported. So it either gets crushed and milled and refined into sugar or it gets ploughed back into the ground. I don’t believe that’s an outcome that will happen, but we seem to have got ourselves into a very difficult and potentially explosive situation now that really requires calm heads.

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