Tongaat Hulett narrowly avoided liquidation this week when the Industrial Development Corporation (IDC) and the Vision Group reached a last-minute funding agreement, providing a lifeline to the embattled sugar producer.
SA Canegrowers welcomed the recent shift, ensuring Tongaat Hulett can continue to operate.
“The agreement provides funding to keep Tongaat Hulett operating in the short term and creates a pathway for the implementation of the business rescue plan, Vision’s ownership of Tongaat Hulett’s assets, and its eventual exit from business rescue.
“For growers, workers and communities that depend on Tongaat Hulett, this agreement averts the immediate threat of liquidation and protects jobs and livelihoods across the sugar value chain,” SA Canegrowers stated.
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Bringing stability to SA’s sugar industry
The chairperson of SA Canegrowers, Higgins Mdluli, said the agreement was a significant milestone in securing the future of the modern South African sugar industry.
“With the liquidation of Tongaat Hulett off the table, we hope that its mills and refinery can now focus on operating without interruption. More than 17 500 supplying sugarcane growers rely on Tongaat,” he said.
Meanwhile, the South African Sugar Association executive director, Sifiso Mhlaba, also welcomed the withdrawal of the liquidation application by the business rescue practitioners.
“This is a great development and a step in the right direction. We now urge all parties to work together towards finding a permanent solution to ensure the continued sustainability of the sugar industry, which is crucial for rural economies of KwaZulu-Natal and Mpumalanga,” Mhlaba said.
According to the agreement, the IDC will become a significant shareholder in Vision, and the IDC will extend post-commencement finance support to Tongaat Hulett to the end of September 2026.
Commitment to protect livelihoods
Mmakgoshi Lekhethe, chief executive officer of the IDC, said the agreement reflects the IDC’s commitment to supporting an outcome that safeguards productive capacity and protects livelihoods across the sugar value chain.
“Our role is aligned to our developmental mandate: to preserve industrial capability, support jobs and enable sustainable economic participation in sectors that are important to South Africa and the region,” Lekhethe said.
Robert Gumede, on behalf of Vision, said he was heartened that the final negotiations and agreement to save the sugar industry had come alive.
“This is a significant milestone for Vision, a black-owned company that is the second biggest employer in Zimbabwe and Mozambique after the government employees.
“Vision is confident to turn the fortunes of the companies and hopes the SA government shall, from now on, protect the jobs and industry from the dumping of foreign-produced sugar from Brazil and Thailand,” Gumede said.
Sugarcane farmer Gugulethu Precious Masuku said the stability of the sugarcane industry in South Africa, especially in KwaZulu-Natal, is of utmost importance as it provides a lifeline to thousands of people who are dependant in the industry.
“As a fourth-generation sugarcane farmer from KZN, I have first-hand experience in the industry sustaining four generations of my family and still continuing to do so currently. So it is very important for the functionality of the industry to continue to sustain the livelihoods of the thousands dependent on it.
“I think we should all commend the interventions from government to avert a disastrous situation such as a collapse of the sugarcane industry, as thousands are dependent on it,” she said.
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