Tongaat Hulett creditors are expected to line up tomorrow in a meeting with the Business Rescue Practitioners to chalk their demands from the company in quicksand over its continuity.
Reports confirmed over the weekend by the South African Cane Growers’ Association ( SASA), were that some small-scale growers supplying the Tongaat Hulett mills at Felixton, Amatikulu and Maidstone had received the overdue payment for cane delivered in September 2022.
Sasa said however, commercial growers have not yet been paid, leaving the majority of the imperilled 14 642 jobs at risk.
“There also remain questions about Tongaat Hulett’s ability to make timeous payments of more than R345 million at the end of November, for the more than 570 000 tons of cane delivered in October. If this is not addressed now, the industry may find itself in this same crisis in a few weeks’ time,” according to Sasa chairperson Andrew Russell.
Sasa said about 300 commercial growers supplied more than half of the cane delivered to Tongaat Hulett in September, and they employ the vast majority of the area’s cane farm workers.
It therefore remains critical that the business rescue practitioners prioritise the payment to these growers, which will enable payments to other value chain participants including contractors, haulier companies and input suppliers.
Russell said there are lingering concerns that surrounding mills 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.“
It was also critical that clarity is provided on plans for the remainder of the season, and to try to secure the future of Tongaat for the sake of thousands of livelihoods dependent on cane growing in the north coast of KwaZulu-Natal, Russell said.
Sasa last week, on meeting with the BRPs, resolved to go cap in hand to ask government to salvage the company and it announced it had written to Minister of Agriculture, Land Reform and Rural Development, Thoko Didiza, Minister of Trade, Industry, and Competition, Ebrahim Patel, and President Cyril Ramaphosa, among others, to request urgent engagements on the necessity of government financial intervention, to ensure that the 4 300 growers and 14 642 farm workers affected by Tongaat Hulett’s business rescue can receive the payments they need to support their families.
“Given the magnitude of the challenge at hand, SA Canegrowers does not believe that the industry can withstand the present peril without financial assistance from government. This is why we have requested urgent meetings with the president, Minister Patel, and Minister Didiza to discuss what funding government can make available, in order to ensure that the work done under the auspices of the Sugarcane Value Chain Masterplan over the past two years to position the sugar industry for the future, has not been in vain,” Russell said.
Indications from government were that the State is unlikely to offer financial intervention as sources said there were no available funds. Heidi Geldenhuys, of a public relations firm contracted by the BRP, said that in the interim, the BRPs were focusing on stabilising operations, while seeking the requisite post-commencement funding.
“This is why SA Canegrowers will continue to engage with the business rescue practitioners, government, and other industry stakeholders to ensure that we prevent a similar crisis.”
BUSINESS REPORT