A grower-led rescue plan has emerged to prevent the liquidation of Tongaat Hulett and protect thousands of jobs across KZN.

The North Coast Courier reports that with the liquidation hearing of the struggling sugar giant less than a month away (June 17) and no clear solution secured, the newly formed GrowerCo aims to raise funding to maintain Tongaat Hulett’s mills and refinery, regarded as critical to the survival of South Africa’s sugar industry.

GrowerCo ownership model

The proposal focuses on long-term sustainability and includes both small- and large-scale growers as equity partners, offering an alternative to what stakeholders describe as an extractive private-equity approach.

“The future of KZN is intricately tied to the future of Tongaat Hulett,” said Pratish Sharma, a grower supplying the Maidstone mill.

“The long-term economic and societal consequences of its liquidation would far exceed the liabilities on the company’s balance sheet.”

According to SA Canegrowers, the 134-year-old company supports almost 40 000 direct jobs across the province. More than 17 500 of South Africa’s 28 000 sugarcane growers supply the company, most of them small-scale operators.

Growers at the centre

GrowerCo’s structure places these farmers at the centre of ownership.

“GrowerCo not only makes sense because it puts Tongaat Hulett under the ownership of people with a long-term commitment to the sugar industry in South Africa, it is also a beacon of what true economic transformation can be,” said Nicholas Ngobe, who supplies the Amatikulu mill.

“Small-scale growers are equity partners in GrowerCo and will earn returns not only on their sugarcane but also through long-term equity growth.

“This creates the possibility that a sugarcane grower whose forebears once worked as indentured labourers in the province’s sugar fields could become an owner in one of South Africa’s oldest sugar companies.”

Financial case for the plan

Financially, GrowerCo argues its plan offers better outcomes for creditors.

It estimates that a sale as a going concern could realise between R3b and R4.5b, compared to as little as R1b in liquidation.

“GrowerCo is a stakeholder-inclusive plan to avoid liquidation and ensure Tongaat Hulett’s South African sugar operations can continue, while also serving as a beacon of real transformation by including small-scale growers at ownership level,” said Sharma.

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