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SA Canegrowers says it welcomes the order issued on 30 November in the High Court of South Africa, Durban Local Division, dismissing with costs the application by Tongaat Hulett and its business rescue practitioners to challenge the financial obligations of the miller in terms of the Sugar Act, 1978 (Act 9 of 1978) and the Sugar Industry Agreement.
This order follows the failure of Tongaat Hulett and Gledhow Sugar Company to pay more than R1,5 billion to the South African Sugar Association (SASA) at the end of March 2023. Because of these defaults, the final recoverable value price for growers in the 2022/23 season dropped by more than R400 per tonne, with significant financial implications to growers and compromising the sustainability of their operations.
Read more about the Gledhow Sugar Company’s business rescue process here.
Legal basis challenged
The business rescue practitioners at Tongaat Hulett subsequently challenged the legal basis for the amounts owed, arguing that the business rescue process took precedence over the industry arrangements. Had Tongaat Hulett succeeded in this argument, it would have released Tongaat Hulett and Gledhow from the legal obligation to honour their financial commitments and fundamentally undermine the structure of the sugar industry.
SA Canegrowers will study the judgement, which will be handed down on Monday, 4 December 2023. “We look forward to future engagements with the business rescue practitioners to resolve this matter and secure the critical outstanding funding due to SASA, growers and the other millers in order to help ensure the industry’s long-term survival and protect the livelihoods it supports.” – Press release, SA Canegrowers
Load shedding could cause major losses in the sugar industry
Data compiled by SA Canegrowers shows that the South African sugar industry is set to lose R723 million in 2023 due to load shedding. With milling giant Tongaat Hulett in business rescue, and the destructive Health Promotion Levy already hampering the industry, these losses are potentially catastrophic for growers and the industry’s workers.
