Thousands of jobs on the line as Tongaat Hulett misses' payment deadline

On Monday, the Tongaat Hulett Limited and the BRPs missed the deadline to make payment to growers for sugarcane delivered in September, putting the livelihoods of thousands of growers and workers delivering cane to the Felixton, Amatikulu, and Maidstone mills in KwaZulu-Natal at risk.

This includes around 4 300 growers who delivered close to 600 000 tons of sugarcane to THL mills in September and were due to be paid more than R400 million by the end of October. 

The SA Canegrowers says in a statement they are to meet with the Business Rescue Practitioners appointed in the Tongaat Hulett Limited (THL) matter on Wednesday.

"Tomorrow, 2 November 2022, SA Canegrowers will meet with the Business Rescue Practitioners appointed in the Tongaat Hulett Limited (THL) matter. This follows a meeting held yesterday (Monday) between the business rescue practitioners and representatives of the growers impacted by the THL Board’s decision to enter into voluntary business rescue, which has placed the entire sugar industry and the jobs it sustains in a perilous position with thousands of jobs and livelihoods hanging in the balance.

"More than 4 000 of these are small-scale growers who are especially vulnerable. Yet it is also important to stress that the viability of the sugar industry is dependent on the survival of both large and small-scale growers, as the larger producers provide the bulk of the cane tonnage that is required to keep the mills running at 350 tons an hour and also cross subsidise small-scale growers through a variety of financial support mechanisms.

"The non-payment also places the livelihoods of an estimated 14 642 permanent and seasonal farm workers employed by these growers at risk. Notably, this figure excludes contractors, haulier companies, input suppliers, mill workers and other service providers throughout the value chain who will also be impacted."

The statement adds that the number of jobs at risk are likely to increase.

"The number of jobs at risk is likely to increase as uncertainty rises about whether growers who delivered cane in October will be paid on time. An estimated R345 million will become due for payment at the end of November to cover these sugarcane deliveries.

"The impact of the current situation is far-reaching and will be devastating. Affected communities will include the rural areas of Empangeni, Eshowe, Gingindlovu, Amatikulu, Darnall, KwaDukuza, Shakaskraal, Tongaat, Ndwedwe, Isinembe, Nyoni, Entumeni, Kwambonambi, Nseleni, Melmoth, and Heatonville, Jozini and the Makhathini Flats, which already suffer from high levels of unemployment and poverty. While the current situation is dire, the sugar industry can still recover. But for this to happen, it is essential that THL secure the funding necessary to maintain its operations.

"SA Canegrowers is committed to working with THL, the Business Rescue Practitioners, banks, government, and other industry stakeholders to ensure that we can reverse the current crisis and mitigate the impact on the workers and the rural economies that rely on the sugar industry for their livelihoods. This will be the focus of tomorrow’s meeting between SA Canegrowers and the Business Rescue Practitioners so that a speedy solution to the current situation can be found", reads the statement.

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