Sugarcane industry organisation SA Canegrowers’ members have accepted a proposal by the business rescue practitioners (BRPs) for Tongaat Hulett that ensures the payment of outstanding payments due to growers for cane delivered to Tongaat Hulett's mills.

The agreement covers payments still outstanding to canegrowers and industry service providers for the cane delivered in October, as well as the payments that will become due at the end of November, and is a critical step to protecting the thousands of livelihoods at stake on the north coast of KwaZulu-Natal, says SA Canegrowers chairperson Andrew Russell.

Under the agreement, outstanding October payments to commercial growers for sugarcane delivered in September will be made by November 11. Payments due to small-scale growers at the end of November for sugarcane delivered in October will be paid in full, while suitable terms have been agreed for staggered payments to commercial growers.

Most commercial growers have already received the October payments, he adds.

Further, SA Canegrowers emphasises the necessity of payments to industry service providers, such as contractors, haulier companies and input suppliers without whom growers cannot operate.

The organisation says the BRPs have confirmed that the outstanding payments to service providers will also be effected this week, together with payments to commercial growers.

“Commercial growers agreed to waive their claim for interest due on delayed payments in recognition of the difficult position Tongaat Hulett finds itself in, and in the interests of other affected stakeholders.

“Growers had required payment prior to any resumption of supplies to Tongaat Hulett. Once the outstanding October payments are effected, growers will resume deliveries to the mills in Felixton, Maidstone and Amatikulu, enabling Tongaat Hulett to resume operations at its mills and refinery, and to once again generate cashflow,” Russell notes.

However, the crisis for the industry is far from over. It remains to be seen whether Tongaat Hulett will be able to secure the funding needed to complete the off-crop maintenance that is required for its mills to operate next season. The risk remains that Tongaat Hulett will not emerge from business rescue, once again plunging the industry into a crisis, he highlights.

“It, therefore, remains essential that critical stakeholders, including government and lenders, work with the industry to ensure the success of the business rescue process. SA Canegrowers continues to implore Trade, Industry and Competition Minister Ebrahim Patel and Agriculture, Land Reform and Rural Development Minister Thoko Didiza to meet with industry stakeholders to address this situation.

“The demise of Tongaat Hulett would undo years of work under the Sugarcane Value Chain Masterplan, reversing efforts to shield the local market from cheap sugar imports and protect the one-million livelihoods that depend on the sugar industry,” he says.

SA Canegrowers welcomes the speedy action of the BRP to ensure the prioritisation of grower payments. This is critical not only for the maintenance of good relations between Tongaat Hulett and its supplying growers, but also for the protection of thousands of vital livelihoods on the north coast of KwaZulu-Natal.