Farmers sweat over uncertainty of Tongaat Hulett’s future

Sugarcane farmers are concerned about what lies ahead as Tongaat Hulett’s future hangs in the balance. Image for illustrative purposes. Picture: iStock Nkosinathi Msweli, who grows sugarcane in Kearney, Stanger in the KwaDukuza area of KwaZulu-Natal, said uncertainty about the embattled Tongaat Hulett’s future has already deepened financial strain across the value chain.

“If it gets to a stage where there is a total collapse it will be a disaster for myself, workers, their dependants and the towns, as well as other businesses that are involved in the sugarcane business. Msweli has been farming since 1996 and his operation spans 123 hectares, with 75 hectares under cane. He employs eight permanent workers and supplements them with seasonal labour during peak periods.

For growers like him, the crisis is about whether cane will be milled in time, whether payments will materialise and whether decades of work can survive a corporate collapse. He said in January their payments were zero due to a poor RV price, which refers to the sugar content in a stick of cane and determines what farmers are paid. “It was also about R200 per ton lower as a result of imported sugar coming into our country and displacing the local market,” Msweli said.

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The looming provisional liquidation has compounded the pressure. The industry is currently in the off-crop season, a period when cane is not being harvested, making planning even more uncertain. “There is a lot of uncertainty about the future.

The crop has a life span. If it is not milled at a particular time, it will be a big loss to everyone and the whole industry will eventually be affected,” he said. Growers are also waiting on retention payments due at the end of March.

Msweli said he is hoping the funds will be paid as promised. Tongaat’s business rescue practitioners have approached the KwaZulu-Natal High Court in Pietermaritzburg for provisional liquidation, arguing that there is no longer a reasonable prospect of rescuing the company after a proposed sale and refinancing deal collapsed.

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