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Sugar crisis: 14 600 jobs on the line


Estimated reading time: 3 minutes

SA Canegrowers will meet with the business rescue practitioners appointed in the Tongaat Hulett Limited (THL) matter. This follows a meeting between the business rescue practitioners and representatives of the growers impacted by the THL board’s decision to enter voluntary business rescue, which has placed the entire sugar industry and the jobs it sustains in a perilous position, with thousands of jobs and livelihoods hanging in the balance.

As of 1 November 2022, THL and the business rescue practitioners have officially missed the deadline to make payment to growers for sugarcane delivered in September. This puts the livelihoods of thousands of growers and workers delivering cane to the Felixton, Amatikulu, and Maidstone mills in KwaZulu-Natal at risk. 

Read more about Tongaat Hulett’s business rescue here.

This includes around 4 300 growers who delivered almost 600 000 tons of sugarcane to THL mills in September and were due to be paid more than R400 million by the end of October. More than 4 000 of these are small-scale growers who are especially vulnerable.

Yet it is also important to stress that the viability of the sugar industry depends on the survival of both large- and small-scale growers, as the larger producers provide the bulk of the cane tonnage that is required to keep the mills running at 350 tons an hour and cross-subsidise small-scale growers through a variety of financial support mechanisms.

Read more about sugar tax here.

Livelihoods of farmworkers at risk

The non-payment also places the livelihoods of an estimated 14 642 permanent and seasonal farmworkers employed by these growers at risk. Notably, this figure excludes contractors, haulier companies, input suppliers, millworkers and other service providers throughout the value chain who will also be impacted. 

The number of jobs at risk is likely to increase as uncertainty rises about whether growers who delivered cane in October will be paid on time. An estimated R345 million will become due for payment at the end of November to cover these sugarcane deliveries.

Read more about the KwaZulu-Natal floods’ effect on the sugar industry here.

The impact of the current situation is far reaching and will be devastating. Affected communities will include the rural areas of Empangeni, Eshowe, Gingindlovu, Amatikulu, Darnall, KwaDukuza, Shakaskraal, Tongaat, Ndwedwe, Isinembe, Nyoni, Entumeni, Kwambonambi, Nseleni, Melmoth, and Heatonville, Jozini, and the Makhathini Flats, which already suffer from high levels of unemployment and poverty.

While the current situation is dire, the sugar industry can still recover. But before this happens, it is essential that THL secures the funding necessary to maintain its operations. 

SA Canegrowers is committed to working with THL, the business rescue practitioners, banks, government, and other industry stakeholders to ensure that we reverse the current crisis and mitigate the impact on the workers and the rural economies that rely on the sugar industry for their livelihoods. This will be the focus of the upcoming meeting between SA Canegrowers and the business rescue practitioners so that a speedy solution to the current situation can be found. – Press release, SA Canegrowers

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