SA Canegrowers welcomes lifeline deal to save Tongaat Hulett from liquidation

The South African sugar industry has welcomed a breakthrough agreement between the Industrial Development Corporation (IDC) and the Vision consortium that is set to keep struggling sugar producer Tongaat Hulett operating while its business rescue process continues.

In a statement on Wednesday, SA Canegrowers described the agreement as a significant step towards securing the future of one of South Africa’s most important agricultural and industrial businesses.

Under the deal, the Vision consortium and the IDC have agreed on a funding pathway that will support Tongaat Hulett’s ongoing business rescue process. As a result, the company’s business rescue practitioners have agreed to withdraw the liquidation application that had threatened the future of the century-old sugar giant.

The agreement provides immediate funding to ensure Tongaat Hulett continues operating in the short term while creating a pathway for the implementation of the approved business rescue plan, the transfer of ownership of the company’s assets to Vision, and its eventual exit from business rescue.

SA Canegrowers Chairman, Higgins Mdluli, said the agreement brings relief to thousands of growers, workers and communities that depend on the company.

“This agreement is 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,” said Mdluli.

Tongaat Hulett remains a key player in South Africa’s sugar sector, operating three sugar mills and the country’s largest standalone white sugar refinery. The company has been a cornerstone of the local sugar industry for more than 130 years and forms part of a value chain that supports over one million livelihoods.

Mdluli also thanked government stakeholders, particularly the Department of Trade, Industry and Competition and the IDC, for their intervention and support during a critical period for the business.

He noted that Tongaat Hulett’s operations had continued despite the looming liquidation threat, partly due to bridging finance provided by the IDC.

While welcoming the agreement, SA Canegrowers said the industry still faces significant challenges, including the continued influx of imported sugar into the South African market.

Mdluli said that the subsidised sugar imports from countries such as Brazil and Thailand continue to displace locally produced sugar from retailers and food and beverage manufacturers, placing pressure on growers and millers across the industry.

SA Canegrowers said it looks forward to working with all stakeholders to ensure a stable and sustainable future for South Africa’s sugar industry while addressing the challenges threatening local production.