Following the Competition Commission recommendation that the Competition Commission approve Vision consortium’s proposed takeover of embattled sugar producer Tongaat Hulett, industry body SA Canegrowers hopes the consortium will honour the R526-million in outstanding levies owed by Tongaat to the sugar industry.

The overdue payment of industry levies has put canegrowers and other sugar industry members, particularly small-scale farmers, at risk.

The levies form part of the obligations that are due under the sugar legislation which is legally binding on all members of the industry and that serve to ensure that growers, millers and refiners each receive equitable treatment under the law, such as the provisions that determine the sharing of the proceeds from sugar production. 

Tongaat did not pay the due statutory levies during 2022 and into 2023, claiming it did not have to pay the levies while in business rescue.

The Durban High Court in May this year, however, confirmed that the outstanding obligations need to be paid by Tongaat to the South African Sugar Association.  

Further, also among the consortium’s responsibilities is to buy sugarcane from previously disadvantaged farmers and increase the land under sugarcane cultivation within six years.

SA Canegrowers chairperson Higgins Mdluli comments that the consortium’s commitment to procure cane from small-scale growers, as well as provide financial support for such growers, will bring stability to the industry.

The Vision consortium comprises South African and international partners including South Africa-based Guma Agri and Food Security, Pakistan-based Almoiz Holdings, and Mauritius-based Remoggo and Terris AgriPro. The consortium is led by businesspeople Robert Gumede and Rute Moyo.

The Competition Tribunal will make its final decision on the takeover, which will involve Vision taking over Tongaat’s R8-billion debt through a partial debt-for-equity swap arrangement.

Vision confirmed in January this year that Tongaat would remain listed on the JSE and that new jobs may be created as the business grows under its leadership.

Tongaat employs about 40 000 people and works with more than 250 000 small-scale canegrowers across its operations in South Africa, Mozambique, Zimbabwe and Botswana.