Time is running out to save 134-year-old South African business from liquidation

With the liquidation hearing for Tongaat Hulett fast approaching, calls for certainty continue to grow with regard to the sugar producer’s future.

Tongaat Hulett is the largest producer of refined white sugar in South Africa, and its liquidation would severely cripple the country’s already struggling sugar industry.

The company was initially set to have its liquidation hearing on 16 April, but this was postponed to 17 and 18 June after a R200 million deal was secured for its continued operations.

Now, with the new liquidation hearing less than two weeks away, groups such as SA Canegrowers have asked for clarity around what is being done to save the company.

In a statement, SA Canegrowers Chairman Higgins Mdluli said Tongaat Hulett’s liquidation would impact not just the sugar industry, but that of soft drinks, snacks and confections as well.

“We urgently call upon the Department of Trade, Industry and Competition (DTIC), business rescue practitioners (BRPs), Metis Strategic Advisors, and the Industrial Development Corporation (IDC),” Mdluli said.

“Take all necessary measures to avert liquidation. If liquidation is unavoidable, we advocate for a funded liquidation, in which funds are provided to allow the mills to continue operating.”

Approximately 18,000 of the country’s 28,000 registered sugarcane growers across Mpumalanga and KwaZulu-Natal use Tongaat Hulett’s mills to process their sugar.

Of these, Mdluli said 17,500 of these are small-scale growers who are completely dependent on sugar production for their continued operations and the livelihood of their staff.

The closing of Tongaat Hulett’s mills would force these growers to transport their sugarcane further for processing, driving their input costs up to potentially unaffordable levels.

This in turn could force many of these growers to close down, putting over 15,000 jobs at risk across the sector and threatening the livelihoods of more than 40,000 people.

“SA Canegrowers has written to Deputy Minister Zuko Godlimpi to ask that the DTIC step in and do all that is necessary to ensure Tongaat Hulett is saved,” Mdluli said.

“The potential collapse of Tongaat Hulett poses a significant threat to the entire KwaZulu-Natal and Mpumalanga sugar industry.”

Sugar imports are on the rise

The financial collapse of Tongaat Hulett and its impact on the local sugar industry have allowed sugar imports to increase rapidly over the past few years.

According to Mdluli, approximately 213,322 tonnes of sugar were imported into South Africa between April 2025 and March 2026.

This is more than double the 98,860 tonnes of sugar imported into the country the year prior, with much of this coming from countries such as Brazil, India and Thailand.

Here, sugar producers are heavily subsidised by their governments, allowing them to sell their sugar at unsustainably low prices for South African growers who are not subsidised.

Mdluli warned that the liquidation of Tongaat Hulett would drive demand for white sugar even further offshore, resulting in a reduced demand for locally produced sugar.

“To protect our sugar industry effectively, South Africa needs a robust tariff regime that shields it from imports, with tariffs adjusted timeously in response to fluctuations in global sugar prices,” Mdluli said.

“A stronger tariff is also urgently needed to reduce the incentive to import sugar, something the International Trade Administration Commission is investigating.”

Tongaat Hulett’s financial troubles stem from the uncovering of an accounting scandal at the company in 2018, which destroyed over R12 billion in shareholder value.

The company entered voluntary business rescue in October 2022, with its BRPs filing for liquidation in January 2026 after the business rescue plan with the Vision Consortium subsequently failed.

Sugar industry stakeholders are hopeful that the company can still be rescued, with SA Canegrowers set to oppose its liquidation in the upcoming hearing alongside the DTIC and the IDC.

DTIC Deputy Minister Zuko Godlimpi said his department remains positive that Tongaat Hulett will stay in operation and will make a case against its liquidation.

The department hopes to replicate the success of similar business rescue proceedings across the sugar industry at Tongaat Hulett, such as the recent turnaround of the Gledhow Sugar Company.

Meanwhile, the group GrowerCo was recently established to secure funding for the company’s continued operations, appointing small and larger-scale growers as equity holders in Tongaat Hulett.