Tongaat Hulett is expected to resume operations at its mills and refinery, and to generate cash flow again soon.

This comes after the SA Canegrowers announced that an agreement on short-term payments has been reached between Tongaat Hulett business rescue practitioners and cane growers on Wednesday.

According to the statement released by the chairperson of the SA Canegrowers, Andrew Russell, growers had required payment prior to any resumption of supplies to Tongaat Hulett.

“The agreement, which covers payments still outstanding to canegrowers and industry service providers as well as the payments that will become due at the end of November for the cane delivered in October, is a critical step to protecting the thousands of livelihoods at stake on the north coast of KwaZulu-Natal.”

Chairperson of SA Canegrowers discusses payments

Russell said most commercial growers have already received the October payments. He said under the agreement, outstanding October payments to commercial growers for sugarcane delivered in September will be made by Friday.

“Payments due to small-scale growers at the end of November 2022 for sugarcane delivered in October will be paid in full, while suitable terms have been agreed for staggered payments to commercial growers.

“Once the outstanding October payments are made, growers will resume deliveries to the mills in Felixton, Maidstone, and Amatikulu, enabling Tongaat Hulett to resume operations at its mills and refinery, and to once again generate cash flow,” said Russell.

He added that although the payment issue seems to have been solved, the crisis is not over.

“It remains to be seen whether Tongaat Hulett will be able to secure the funding needed to complete the off-crop maintenance that is required for its mills to operate next season. The risk remains that Tongaat Hulett will not emerge from business rescue, once again plunging the industry into a crisis,” said Russell.

He called on stakeholders including government and lenders to work with the industry to ensure the success of the business rescue process.

He added that this is why the SA Canegrowers continue to implore Minister of Trade, Industry and Competition Ebrahim Patel and Minister of Agriculture, Land Reform, and Rural Development Thoko Didiza to meet with industry stakeholders to address this situation.