Bitter prospects for cane growers in local sugar industry
More than 4 000 small-scale growers face financial strain after R400m goes unpaid
EFFORTS continue to secure funding to rescue Tongaat Hulett as the livelihoods of thousands of sugar cane growers and workers remain at risk.
This as the company, which entered into business rescue last week, missed the first deadline for payments to growers who delivered sugar cane in September.
According to the SA Canegrowers Association, around 4 300 growers who delivered almost 600 000 tonnes of sugar cane to Felixton, Amatikulu and Maidstone mills in September were due to be paid more than R400-million by the end of last month.
This places further uncertainty 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 sugar cane deliveries," said SA Canegrowers chairperson Andrew Russell.
"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, eNyoni, Entumeni, KwaMbonambi, eNseleni, Melmoth, Heatonville, Jozini and the Makhathini Flats, all of which already suffer from high levels of unemployment and poverty,” said Russell.
He said the non-payments would also be felt by an estimated 14 642 permanent and seasonal farm workers employed by growers - 4 000 who are small-scale growers.
“Notably, this figure excludes contractors, haulier companies, input suppliers, mill workers and other service providers throughout the value chain who will also be impacted,” he said.
Optimism
Engagement between the business practitioners and representatives of the growers impacted by the Tongaat Hulett board’s decision began on Monday and is set to continue as they map a way forward.
Russell said, although the current situation is dire, the sugar industry can still recover.
"But for this to happen, it is essential that Tongaat Hulett secures the funding necessary to maintain its operations.
“SA Canegrowers is committed to working with Tongaat Hulett, the business rescue practitioners, banks, government, and other industry stakeholders to ensure we can reverse the current crisis and mitigate the impact on the workers and rural economies relying on the sugar industry for their livelihoods,” said Russell.
Tongaat Hulett CEO Gavin Hudson also expressed optimism last week, saying the 'start of business rescue is not the end for Tongaat Hulett’s South African operations'.
“Business rescue provides a legal framework that allows the business rescue practitioners to work with key stakeholders to find optimal solutions to our financial difficulties,” said Hudson.
“We have dedicated people working very hard to find the best way forward, and the leadership team is committed to working closely with the business rescue practitioners to ensure a successful outcome to the restructuring of the company that protects those associated with Tongaat.”