For the first time in years, sugarcane farmers who are dependent on Tongaat Hulett’s businesses say they feel positive about the future again. This follows a groundbreaking announcement last week that Tanzanian company Kagera Sugar Limited would take over Tongaat’s failing sugar division in South Africa.
A relieved Stanger-based sugarcane farmer, Nkosinathi Msweli, dubbed the news as a huge relief.
Tongaat is Msweli’s only market for sugarcane. When the sugar company entered voluntary business rescue on 27 October 2022, days before payday on Msweli’s farm, he feared for his livelihood and that of his workers.
Desperate times
“The labourers do not know Tongaat Hulett, they know you as an employer. At the end of the month, they want money from you. You cannot tell them about Tongaat Hulett, they won’t understand that,” Msweli explained.
“They know that you hired them, so you must pay. That uncertainty was a big problem and we had to lay off a few people and pay them only when there was money.”
Also, Msweli signed a take-off agreement with Tongaat, which means that he could not look for an alternative market for his sugarcane.
“As a farmer, I am so relieved because there is light at the end of the tunnel. We feel comforted because we know now that we can continue investing in our farms. At least now we know where we stand.”
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Keeping it local
Another Tongaat sugarcane supplier, Swazelihle Ndlovu, said he would have liked to see farmers take over Tongaat’s sugar company.
“We could have at least bought 20%, not the whole thing, because you want to have a voice in the business you’re working with.
“The downside is that it is a foreign company that bought them. Perhaps we could have been happier if they were bought by a South African company.
“As farmers, we could have a say at the millers affecting the value chain. We have a direct interest in what the mill is,” he said.
Feared the worst
Ndlovu is based in Tongaat, one of the largest sugar-producing districts in the world. He said he feared for his farming future when the company entered business rescue, adding that small-scale farmers in rural areas felt it the most.
“The smaller they are, the more they were impacted… Banks and debtors were not willing to look at us. It was tough because if all your income comes from Tongaat, you are [seen] as a risk because you are affiliated. School fees at the beginning of the year were not paid on time and it affected a lot of things. I had to restructure repayments,” he explained.
Ndlovu kept his farm afloat with income generated through other business interests. He also significantly reduced working hours on his farm. Instead of working seven days a week with his 300 farmworkers, workdays on the farm decreased to only three days.
Workers also took salary cuts. “This is only because you don’t want to lose those people or their skills because it takes time to train people.”
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Growing a sweet future
Rodney Mbuyazi, a sugarcane and livestock farmer in Empangeni, said due to the industry uncertainty he had difficulty planning for the future.
He is also relieved. “Now you know that if I put more money into my production, you know where it is going, the future is there.”
Mbuyazi is hopeful that South Africa’s sugarcane industry will soon see positive returns from the latest development. “When we have an opportunity to meet with [Kagera] perhaps they’ll be able to tell us what they have got planned for the farmers.”
He said the fact that someone is investing in Tongaat is welcoming news and he is excited about the future.
Msweli said he hopes that the new owners will bring positive change and fresh ideas.
“The current setup only helps us supply and sell [raw sugarcane]. Perhaps they open opportunities in which we [can] partake in and enjoy benefits from other products because there are many products that come from sugar and we are not part of it,” Msweli explained.
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