SA Canegrowers hopes Vision Consortium will honour Tongaat R526m obligations

SA Canegrowers says it notes the Competition Commission’s recommendation that Vision Consortium’s bid for Tongaat Hulett be approved. Picture: Simphiwe Mbokazi Independent Newspapers

SA Canegrowers says it notes the Competition Commission’s recommendation that Vision Consortium’s bid for Tongaat Hulett be approved. Picture: Simphiwe Mbokazi Independent Newspapers

Published Jun 26, 2024


SA Canegrowers has expressed hope that the Vision Consortium would commit to honouring the close to R526 million in outstanding obligations to the sugar industry following recommendations by the Competition Commission that its bid for Tongaat Hulett be approved.

In May this year, the Durban High Court confirmed that the outstanding levies were due to be paid by Tongaat Hulett to the sugar industry.

SA Canegrowers yesterday said the overdue payments of these obligations were putting all cane growers and many livelihoods in the sugar industry at risk as the industry supports the livelihoods of one million people.

The Vision Consortium is made up of entrepreneurial families led by both South African and Zimbabwean Robert Gumede and Rute Moyo, and international businessmen Amre Youness and Nauman Khan.

In order to get approval for the Tongaat deal, the consortium agreed to buy cane from historically disadvantaged individuals and increase the land under sugar cane cultivation within six years.

Higgins Mdluli, the chairperson of SA Canegrowers, said the consortium’s commitment to procure cane from small-scale growers, as well as provide financial support for such growers, would bring welcomed stability.

“But the industry also hopes that the new owners will honour the outstanding levies and put the matter to rest,” Mdluli said.

The South African Farmers Development Association (Safda) works with about 22 000 small-scale farmers who operate on the land held under communal tenure in areas that are part of the Ingonyama Trust and traditional leaders.

The highest concentration of these farmers is in areas that are within Tongaat Hulett’s catchments.

The levies form part of the obligations that were due under the sugar legislation which was legally binding on all members of the industry and that serves to ensure that growers, millers and refiners each receive equitable treatment under the law, such as the provisions that determine the sharing of the proceeds from sugar production.

During 2022 and 2023, Tongaat suspended paying the statutory levies for a few months up until March last year, claiming that it did not have to pay while in business rescue.

It applied to the courts to have the payment of the levies suspended under the Companies Act, but the Durban High Court in 2023 confirmed that the Sugar Industry Agreement must be honoured and that the Companies Act did not override the sugar legislation.

This means payments due under the provisions of this legislation must be honoured by the millers even if they find them in business rescue.

In May, the Durban High Court dismissed the leave to appeal brought by Tongaat’s business rescue practitioners.

Dr Siyabonga Madlala, executive chairperson of Safda, said the Competition Commission’s consideration and approval was one of the key hurdles that the transaction needed to jump to pave a way for a conclusive process.

Madlala said they could not wait for the transition to meet all conditions and for the Tongaat Hulett business to come out of business rescue and end the dispensation of uncertainty and anxiety.

“We understand that there are other matters which are still pending are subject to judicial processes that we wait to see how they will be concluded before we can comment, that includes the issue of levies owned by the Tongaat Hulett business to the sugar industry,” Madlala said.

“It is encouraging to get such a pledge from the new owners to continue to support small-scale farmers who are victims of disproportionate and skewed land ownership patterns in our in the South African sugar industry.”