Government believes Tongaat Hulett remains capable of being stabilised and restructured.
Minister of Trade, Industry and Competition, Parks Tau said liquidation should be the last resort for Tongaat Hulett, as he believes the business remains capable of being stabilised and restructured.
This follows as the sugar processor battles mounting financial pressure, with close to 163 000 tonnes of cut-price sugar entering the domestic market, intensifying fears of its downfall.
Tau acknowledged that the Sugar Industry remains under pressure due to difficult trading conditions, both domestically and internationally.
ALSO READ: Tongaat liquidation threat puts thousands of growers at risk
Saving Tongaat Hulett
In a statement on Friday, Tau said the government and other key players will oppose the liquidation of Tongaat Hulett.
“Accordingly, the dtic, together with other organs of state, will oppose the liquidation of Tongaat Hulett and will continue to support all lawful efforts aimed at finding a viable and durable resolution,” read the statement.
“Government will intensify its engagements with all stakeholders, including the Industrial Development Corporation (IDC), labour, growers, financiers, investors and affected communities, to explore solutions that ensure the survival of the company and the long-term sustainability of the sugar sector.”
Liquidation of Tongaat Hulett
He acknowledged that the business is a systemically important player in the country’s sugar value chain.
Tau added that liquidating Tongaat Hulett would have disastrous consequences for the sugar industry, especially in KwaZulu-Natal, as it would result in job losses.
“The liquidation of the company would have far-reaching and devastating consequences for the sugar sector, particularly in KwaZulu-Natal, where the industry underpins thousands of jobs, small-scale farming livelihoods, rural economies and related downstream industries,” he said.
“The collapse of this ecosystem would deepen economic distress in already vulnerable communities and undermine years of investment in transformation, industrial capability and agricultural development.”
ALSO READ: Tongaat Hulett’s collapse began in the boardroom
Business can be saved
Tau said the government believes liquidation should be a measure of last resort, particularly where there are reasonable prospects of rescuing a strategically important enterprise in a manner that protects jobs, sustains productive capacity, and preserves value for the broader economy.
“In this context, the dtic believes that Tongaat Hulett remains capable of being stabilised and restructured through a sustainable solution that balances the interests of workers, growers, communities, creditors and the country.”
Government’s objectives
- Protecting jobs and livelihoods, particularly in rural and peri-urban areas
- Safeguarding small-scale and emerging farmers who depend on the sugar value chain
- Preserving industrial and agricultural capacity critical to food security and regional economies
- Ensuring accountability, transparency and good governance in all processes.
“The dtic reiterates that it will respect the independence of the courts and the legal processes currently under way.
“At the same time, government will continue to play its role in facilitating constructive dialogue, supporting credible rescue initiatives, and ensuring that public interest considerations remain central to the outcome.
“Further updates will be provided as engagements progress.”
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