After years in business rescue, the provisional liquidation of Tongaat Hulett Limited has thrown South Africa’s sugar industry into uncertainty, with cane growers warning that its closure would be disastrous for the local industry.
The chief operating officer of the South African Farmers Development Association, Thandokwakhe Sibiya, told Sunday World leadership had met with Robert Gumede of the Vision Group, the consortium that was set to acquire the assets of the South African sugar producer as part of a 2024-approved business rescue plan.
“Mr Gumede has assured us that he is doing everything in his power, as a leader of the Vision Group, to ensure that we find a solution.
The concept is that we move to a business rescue process, which is far better than liquidation,” he said.
He said that if Tongaat Hulett closes, it would be disastrous.
“That would mean the industry is unable to supply the local market. It would open the door for imports, with cheap sugar coming into the market. Once that happens, it becomes a downward slope because poverty and unemployment would rise, towns could become ghost towns, KwaZulu-Natal would be economically destabilised, and even South Africa would feel the impact. We do not want that outcome,” he said.
Dr Thomas Funke, CEO of SA Canegrowers, said farmers are alarmed that the business rescue process has ended in what appears to be a funding deadlock between the Vision Consortium and the Industrial Development Corporation (IDC).
He warned: If the mills don’t open, farmers won’t be able to deliver their crop, and they won’t get paid. That means farm labourers, small-scale growers and farming families will be severely affected. Job losses will be massive in this industry.”
Tongaat Hulett was placed in business rescue in October 2022, triggered by severe accounting irregularities and governance failures under its former management, which destroyed approximately R12-billion in shareholder value and left the company with a massively weakened balance sheet.
This resulted in a total debt burden that swelled to around R13-billion, owed to roughly 1 000 creditors. The company’s assets were all pledged as security, and it became insolvent and unable to meet its liabilities.
A rescue plan proposed by the Vision Consortium was approved by creditors in January 2024. This plan was contingent on the refinancing of the IDC post-commencement funding facility of R2.3-billion, and paying what was due to the Sugar Association (Sasa).
After shareholders rejected a debt-to-equity swap, the plan shifted to an asset sale, with Vision agreeing to acquire Tongaat’s operating assets and assume responsibility for funding and stabilising the business.
After Vision acquired the lender group’s claims in May 2025, negotiations with the IDC to refinance the critical R2.3-billion facility became protracted.
The business rescue practitioners (BRPs) reported that Vision introduced new, material demands beyond the original plan’s scope, complicating talks.
With the agreement having lapsed, Vision declined to grant an extension without additional conditions. Subsequently, Vision demanded immediate payment of about R11.7-billion, forcing the BRPs to file for provisional liquidation.
Sifiso Mhlaba, Sasa CEO, said, “We were hoping for a successful rescue, but we know that the rescue practitioners have now filed for provisional liquidation. We are concerned about the growers who supplied the mills.”
Amid Tongaat’s crisis, the sugar industry is already under severe strain from depressed global prices, rising input costs and a surge of cheap imports, according to Khulani Siweya, national market and trade policy executive at Sasa.
“Countries such as Brazil, India and Thailand are heavily subsidised, so they take the excess sugar they produce and export it at prices well below the cost of production,” he said.
Between April and December 2025 alone, sugar imports displaced local production to the value of R1.2-billion, with operations shrinking by about 7.25%.
The sector supports around 65 000 direct jobs and 1-million livelihoods.
