There is one thing the Durban Chamber of Commerce and Industry and other agriculture organisations agree on is that if Tongaat Hullet’s business rescue fails, it will have dire consequences for South Africa.
The success of the business rescue is vital to ensure farmer livelihoods, thousands of jobs, food security, the sugar sector, stability in KwaZulu-Natal with economic ramifications for South Africa.
This is what stakeholders had to say:
Durban Chamber of Commerce and Industry:
If Tongaat Hulett’s business rescue failed the Sugar Master Plan could be derailed, South Africa could experience an influx of imports leading to an estimated 700 000 jobs being lost, thereby, making the local market less competitive, the Durban Chamber of Commerce and Industry, which represents approximately 3 000 businesses, said on Friday.
“As one of the major sugar providers, its failure to deliver sugar to its customers will result in devastating consequences that can prove detrimental for South Africa,” it warned.
The chamber called on all stakeholders to work together for the interest of the economy and the country.
“We remain committed to working with Tongaat Hulett to help recover and restore their business operations. Tongaat Hulett is one of the country’s largest sugar producers in the country, supplying roughly one-third of the sugar and 50 percent of white sugar in the country,” it added.
South African Cane Growers Association:
The South African Cane Growers Association said on Friday that it was deeply concerned about Tongaat going into business rescue, which could have catastrophic consequences for South African sugar cane growers and the entire sugar cane value chain.
“This move means that Tongaat Hulett has lost access to its bank accounts, which in the immediate term means that over R401 million that was due to be paid to growers at the end of October 2022 will likely not be transferred on time,” said Andrew Russell, SA Cane Growers chairperson.
Russell said the unbundling of Tongaat would have dire financial consequences for growers as well as the farm workers they supported.
This situation could plunge thousands of growers and workers into destitution and raised the risk of unrest in KwaZulu-Natal’s rural cane-growing communities, he said.
“The payments due at the end of this month are for sugar cane delivered in September 2022. For a number of small-scale growers, September marked their first deliveries of the season, and any default on these payments will have devastating impacts on their livelihoods, as well as the communities they support,” Russell said.
Questions also remain about how payments will be made for deliveries in October, November and December 2022, which means the impact on growers is likely to worsen if the mills do not remain operational.
“Although the sugar industry has been aware of Tongaat Hulett’s financial woes, the decision to enter into business rescue at this time has come without warning. As the surrounding mills in the province lack the ability to take on Tongaat Hulett’s deliveries, the decision also has serious short- and long-term implications for the supply of sugar to the local market,” he said.
South African Farmers Development Association
South African Farmers Development Association (Safda) executive chairman Dr Siyabonga Madlala on Friday said Tongaat Hulett’s business rescue announcement had created uncertainty with regards to jobs and the continuation of operations in the sugar sub-sector.
“Tongaat Hulett is a business that cannot just collapse because even commercial farmers need it operational. It is a vital cog in the economy of the KwaZulu-Natal,” he said, adding that it would be premature of Safda to pronounce on the matter until they had met with the respective role-players and the business rescue practitioners.
"This has created some chaos on the ground and uncertainty with regards to our cane deliveries and future operations. The farmers are already panicking. Some are ceasing their operations until further clarity,” Madlala added.
The Department of Agriculture
The department by the time of publication and despite further request for comment, remained mum.
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