The Gledhow Sugar Mill in KwaDukuza has entered voluntary business rescue proceedings, signalling an uncertain future for the entire North Coast sugar industry.

Quietly announced on March 10, the decision follows sugar giant Tongaat Hulett’s decision to enter their own business rescue process in October last year.

Together, the two companies control all four sugar mills still operational in Northern KwaZulu-Natal – the Gledhow Mill, Maidstone Mill, Felixton Mill and Amatikulu Mill.

The previously operational Darnall Mill was mothballed in 2020.

Gledhow’s business rescue follows a difficult few years at the facility, which was forced to temporarily close during the July 2021 unrest and suffered equipment and infrastructure damage from the April 2022 floods.

This has been compounded by the associated inflationary costs of inputs and coal, caused as a result of the ongoing war in Ukraine, the company said in a statement posted on their website.

“These challenges have resulted in the company becoming “financially distressed” as defined in section 128 of the Companies Act, 2008.

“As a result, the board of directors believe that initiating business rescue proceedings is in the best interests of the company and has agreed that a solid business turnaround plan will be developed over the coming months to ensure the company’s sustainable operations,” said the company.

Gledhow said they would continue to crush and process cane as efficiently as possible given the circumstances.

“The board of directors has assured all affected persons, including the staff, that paying staff salaries and allowing the business to keep producing sugar is a top priority. Cane payments, production, and maintenance costs are also the highest priority to be covered,” they said.

Per the Gledhow Sugar Mill website, the mill directly employs 374 people, while South African Canegrowers Association figures indicate that more than 245 growers sell their crop to the mill.

“These growers employ more than 3 400 workers from surrounding communities.”

“Together they produce more than 1.1 milion tonnes of sugarcane per year – 6% of the South African industry’s total output,” said SA Canegrowers chairperson, Andrew Russell.

He noted grave concerns with the business rescue announcement, again calling for urgent intervention to prevent the crisis from getting out of control.

“The Tongaat Hulett business rescue caused an acute crisis in the industry, delays in grower payments, and uncertainty as to the future of sugar milling operations on the North Coast of KwaZulu-Natal.”

“As the new season commences on 1 April 2023, Gledhow’s supplying growers now face similar uncertainty as to whether the mill will operate normally and whether it will be able to make payment for sugarcane delivered and meet its financial obligations to the industry,” said Russell.

When the Courier visited the mill this morning, it appeared operational, but there remains uncertainty about whether the company can facilitate the 2023 growing season.

The Union Association of South Africa (UASA) raised concerns about potential job losses amid the country’s current unemployment crisis.

“Unemployment remains a significant threat to South Africa’s economic growth, and we cannot afford the extra pressure of liquidations or business closures.

“UASA is pleased that Gledhow’s management has taken steps to ameliorate the financial challenges and save the company from further distress,” said UASA spokesperson, Abigail Moyo.

She urged mill employees to keep faith in the management of the process, calling on workers to wait until further detail about the business rescue plan emerges.

The Gledhow Sugar Mill has serviced the KwaDukuza community since 1879, growing to become one of the largest in the province.

Originally privately owned, the mill was bought by Illovo Sugar in 1975 and later sold to the Sokhela Family Trust in 2004.

Additional shareholders came on board in 2009 and the company is owned jointly by Ushukela Milling (fomerly the Sokhela Trust, 34.9%), Illovo Sugar (30%), Sappi (10%) and growers supplying the mill (25.1%).

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