Business
Parks Tau leads push to save Tongaat Hulett from liquidation
A high-level push to prevent the collapse of Tongaat Hulett is gaining momentum as government leaders and industry stakeholders scramble to keep one of South Africa’s most important sugar producers alive.
Trade, Industry and Competition Minister Parks Tau has stepped into the crisis alongside his deputy Zuko Godlimpi, holding urgent discussions with industry players to find a path forward for the troubled company. The intervention comes after the Durban High Court delayed a hearing on an application to place Tongaat Hulett into provisional liquidation.
For many in the sugar sector, that delay offers something rare in recent months: a window of hope.
Why Tongaat Hulett matters far beyond one company
Tongaat Hulett has long been a central pillar of the sugar industry in South Africa, particularly in KwaZulu-Natal, where sugarcane farming supports thousands of rural families and small businesses.
The company entered business rescue in October 2022 as it struggled with financial challenges. A restructuring plan backed by the Vision Group was later approved by creditors in early 2024, raising hopes that the business could stabilise. However, the rescue practitioners announced in February that the plan had become impossible to implement, bringing the threat of liquidation back into focus.
The potential fallout is enormous.
Industry representatives say Tongaat Hulett’s mills and refinery play a critical role in the sugar value chain. For roughly 18,000 small-scale growers, the company is the only viable milling partner available. Without those facilities operating, farmers would have nowhere to process their crops.
That is why the stakes reach far beyond a single company’s balance sheet.
Thousands of jobs and rural livelihoods at risk
According to SA Canegrowers, the organisation representing about 27,000 small-scale growers and more than 1,000 large-scale producers, the collapse of Tongaat Hulett could trigger widespread economic disruption.
The growers who rely on the company collectively support tens of thousands of workers. If the mills were forced to close, an estimated 40 000 people directly employed in cane production could face unemployment. Rural communities across KwaZulu-Natal and Mpumalanga would be among the hardest hit.
For these communities, sugar farming is not just an industry. It is often the main driver of local economic activity.
Industry leaders have warned that losing Tongaat Hulett’s operations could also weaken South Africa’s food and beverage supply chain and increase the country’s dependence on imported sugar. That could expose consumers and businesses to unpredictable global prices and currency fluctuations.
Government says liquidation must be the last resort
Officials in the Department of Trade, Industry and Competition believe the company still has a chance to recover if a sustainable solution can be found.
The government has described Tongaat Hulett as a systemically important player in the national sugar value chain. Liquidation, it says, would have devastating consequences for the broader sector and the many livelihoods tied to it.
The department’s leadership recently met with industry stakeholders, including representatives from SA Canegrowers and the Industrial Development Corporation. According to officials, the discussions were constructive and explored ways to stabilise the business while protecting workers, growers, and creditors.
For now, the company continues operating under the supervision of business rescue practitioners while negotiations continue.
A brief pause that could reshape the sugar industry
Vision Group leader Robert Gumede welcomed the government’s intervention, describing Tongaat Hulett as far more than a single company. In his view, the group represents a key economic anchor for rural regions and an employer supporting thousands of families.
Industry leaders are hoping that the court postponement gives all parties enough time to find a workable solution.
Meanwhile, SA Canegrowers has escalated the issue to the highest levels of government. The organisation has written to President Cyril Ramaphosa and several ministers calling for coordinated action to stabilise the sugar sector.
Their warning is stark: allowing Tongaat Hulett to collapse could set off a chain reaction across farming communities, rural economies, and the wider food system.
A wider industry under pressure
The crisis facing Tongaat Hulett also reflects deeper pressures within South Africa’s sugar industry.
Growers have struggled with rising imports, changing consumer trends, and the ongoing impact of the health promotion levy introduced in 2018. Industry groups argue the tax has weakened demand for locally produced sugar while doing little to reduce obesity rates.
At the same time, stakeholders believe the sector still holds long-term opportunities. Sugar cane could play a role in emerging industries such as biofuels if the right policy support and investment are put in place.
For now, though, the immediate priority is clear: keeping Tongaat Hulett operational.
With government, creditors, and industry bodies now engaged in urgent talks, the coming weeks could determine whether the company survives and what the future of South Africa’s sugar economy looks like.
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Source: The Mail & Guardian
Featured Image: Gauteng
