Tau leads drive to save Tongaat Hulett

Trade, Industry and Competition Minister Parks Tau and his deputy, Zuko Godlimpi, are pushing to rescue giant sugar producer Tongaat Hulett after the Durban High Court postponed a hearing on an application for its provisional liquidation last week. South Africa’s leading sugar producerwas placed under business rescuein October 2022. However, last month the practitioners said the plan to save the company, involving the Vision Group, had“become unimplementable”, raising the prospect of thousands of job losses.

SA Canegrowers said Tongaat Hulett was also the only milling company available to 18 000 small-scale growers who had no other economically viable option. The plan had been approved and adopted by the requisite majority of creditors in early 2024 but in anoticeon 12 February this year, the business rescue practitioners said the plan had fallen through. The Durban high court postponed the hearing on the business rescuers’ application for liquidation in order to allow for those opposing the move to file affidavits, among them SA Canegrowers, the Industrial Development Corporation and the department of trade, industry and competition.

The department said Tongaat Hulett was a systemically important player in South Africa’s sugar value chain and its liquidation “would have far-reaching and devastating consequences for the sugar sector, particularly in KwaZulu-Natal, where the industry underpins thousands of jobs, small-scale farming livelihoods, rural economies and related downstream industries”. “The government remains firmly of the view that liquidation should be a measure of last resort, particularly where there are reasonable prospects of rescuing a strategically important enterprise in a manner that protects jobs, sustains productive capacity and preserves value for the broader economy,”it said recently. It said it believed Tongaat Hulett could be stabilised and restructured through a sustainable solution that balanced the interests of workers, growers, communities and creditors.

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This week, accompanied by his deputy Godlimpi and the department’s director-general Simphiwe Hamilton, Tau held discussions with all stakeholders on how to avert Tongaat Hulett’s liquidation. The meeting was “very constructive”, department spokesperson Kaamil Alli said. “While discussions centred on Tongaat Hulett, broader industry-related matters were covered,” Alli said.

“The outcomes of the meeting provided an effective way forward, addressing concerns raised by industry, leading to the future sustainability of the business. “The minister and the deputy will continue to engage industry as issues relating to Tongaat unfold.”

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