South Africa’s trade ministry said on Friday it would oppose the liquidation of sugar producer Tongaat Hulett (TONJ.J), warning of severe consequences for jobs, farmers, and the country’s sugar industry.
The 134-year-old Tongaat Hulett is one of South Africa’s biggest sugar millers, with the capacity to mill 2 million metric tons. It employs thousands across its operations in South Africa, Zimbabwe, Mozambique, and Eswatini.
The ministry does not have the power to stop the liquidation, but, along with other interested parties, can take part in the hearings and make the case against it.
Vision Group, the company’s lead secured creditor, said last week a process to rescue Tongaat Hulett, which began in 2022 following major accounting irregularities, had failed.
Vision, which has been trying to buy the company for about three years, also said the provisional liquidation would ensure asset protection, operational stability, and safeguard livelihoods tied to the sugar producer.
“The (trade department), together with other organs of state, will oppose the liquidation of Tongaat Hulett and will continue to support all lawful efforts aimed at finding a viable and durable resolution,” Trade and Industry Minister Parks Tau said in a statement.
“Last week, about 250,000 grower and supplier jobs linked to the cane-growing sector in KwaZulu-Natal and Mpumalanga provinces are at risk, as well as 2,600 direct jobs within the company.” Vision said
A provisional liquidation hearing is scheduled for February 27, raising fears over the future of South Africa’s sugar supply chain and the economic pressures faced by rural communities reliant on the company.
Tau described Tongaat Hulett as a “systemically important player” in the sugar value chain and expressed optimism about its potential stabilisation and restructuring.