FEATURE | Tongaat Hulett liquidation threat shakes KwaZulu-Natal cane belt

The uncertainty unleashed by Tongaat Hulett’s provisional liquidation has rippled through KwaZulu-Natal’s lush cane belt, from small-scale farmers tending a few hard-won hectares to commercial operators leasing vast tracts from the distressed sugar giant near Tongaat.

That burden extends beyond the town’s outskirts into the Midlands and down the coast, unsettling rural communities long attuned to the steady hum of the mills.

The concern is that sugarcane cannot travel far. It must be crushed close to where it is grown and cannot be transported over long distances without compromising quality. If nearby mills shut down, farmers would be left with no viable market.

“The milling capacity has dropped from 14 mills to 12 mills over the years, and the remaining ones are already full. Cane from Tongaat mills will probably struggle to find another home because those mills are allocated,” said Thomas Funke, the CEO of the South African Canegrowers Association.

“Only those within about 60km of alternative mills — near Umfolozi or Pongola in the north — might manage, but for growers in the centre of the area, transport costs are simply too high."

Read: Inside the scramble to save sugar producer Tongaat Hulett

From the industry’s 25,653 small-scale farmers, about 60% are concentrated in the Tongaat Hulett catchment area, supplying sugarcane to its three mills located in northern KwaZulu-Natal — in Tongaat at Maidstone Mill on the north coast; in Gingindlovu at Amatikulu Mill along the inland north coast belt; and in Empangeni at Felixton Mill in the far north of the province.

“If you wipe out Tongaat’s three mills, it means there will be cane floating around. Right now, farmers in Jozini are already forced to transport their cane more than 200km to the nearest mill in Empangeni because Pongola and Dube-Dube have no spare capacity. The cane ends up having to find a home in Felixton instead.

“It’s a challenge we’re already struggling with, and if the Felixton mill were to close, all 250,000 tonnes from Jozini farmers would have nowhere to go,” said Thandokwakhe Sibiya, COO of the South African Farmers Development Association (SAFDA).

Tongaat’s business rescue failed last week when its turnaround specialists applied for provisional liquidation after sale agreements with Robert Gumede’s Vision lapsed, turning an abstract financing dispute into an urgent social crisis for the KwaZulu-Natal sugar economy.

It’s a challenge we’re already struggling with, and if the Felixton mill were to close, all 250,000 tonnes from Jozini farmers would have nowhere to go.

—  Thandokwakhe Sibiya, COO of the South African Farmers Development Association

The assets at stake extend beyond mills and include vast tracts of agricultural land. Large-scale commercial farmers such as Uzinzo Sugar Farming, which farms about 3,900 hectares of leased cane land, rank among Tongaat’s five largest supplying growers, producing an estimated 160,000 tonnes of cane annually.

For Uzinzo Sugar Farming, which has been operating for almost six years, the threat posed by the possible liquidation of Tongaat Hulett is existential. The company sells all of its sugar to Tongaat and works on land leased from the group. Should liquidation proceed, Uzinzo could lose both its only buyer and the land that sustains its operations, which is leased from Tongaat.

‘Disastrous’

“The impact could be disastrous. We are not only talking about the livelihoods of small-scale farmers — commercial farmers, who often employ significantly larger workforces, could be affected as well,“ said Midlands sugarcane farmer and co-owner and founder of Sugar Baron Craft Distillery, Brad O’Neill.

“In many cases, they employ ten times more workers, meaning the potential job losses could be substantial,” O’Neill said.

“What’s going to happen to all the growers supplying Tongaat’s mills, particularly those delivering to Felixton in the far north? They’re simply too far to send cane to mills like Maidstone. While some growers may be able to divert to Illovo’s Noodsberg mill, many others don’t have viable alternatives. That’s a major concern. The knock-on effects could be severely negative for the entire sugarcane industry,” he said.

Commercial farmers produce 80% of South Africa’s sugarcane crop, anchoring an industry already under strain. From the roadside, the cane fields look calm and orderly. Hidden within them during harvest are hundreds of workers cutting and burning cane in thick heat and smoke — unseen hands whose toil sustains the mills and their own families.

One such farmer from Isinembe near Tongaat is Pratish Sharma, a fourth-generation sugarcane grower who employs about 60 workers during peak season. The prospect of liquidation, he says, has shifted his focus from crop yields to the livelihoods tied to his fields.

“When the news of the possible liquidation arrived, I had to go and talk to the people and tell them that our business was shutting down. It’s a very difficult conversation to have,” Sharma said.

The provisional liquidation of Tongaat Hulett comes at a fragile moment for South Africa’s sugar industry, already under pressure from a surge of cheaper imports that have further squeezed domestic producers. According to the South African Sugar Association (Sasa), imports this season (2025/26) have displaced more than R1bn worth of local sugar.

The broader sugar industry is now moving into phase two of its master plan, a long strategy to stabilise and future-proof the sector.

After phase one, which ran until March 2023, government and industry stakeholders moved in August last year to implement phase 2 of the sugarcane value chain master plan to 2030.

According to Sasa, just over half — 51% — of the planned outputs were achieved between January 2021, when the industry task teams began functioning, and March 2023, when phase one of the master plan formally concluded.

It remains unclear how the implementation of phase two will proceed with a major player like Tongaat Hulett in liquidation.

Tongaat accounts for about 27% of total sugar production in South Africa, and its uncertainty casts a long shadow over the industry, raising questions about whether the carefully laid plans for pricing, grower support and value-chain reforms can stay on track.