Cape Town – The Department of Trade, Industry and Competition (the dtic) says it will oppose the liquidation of Tongaat Hulett Limited (THL), warning that the collapse of the sugar producer would have “far-reaching and devastating consequences” for the sector, particularly in KwaZulu-Natal.
In a statement on the latest developments, including pending liquidation proceedings before the courts, the department said Minister Parks Tau is “acutely aware that the Sugar Industry remains under pressure due to difficult trading conditions, both domestically and internationally.”
The dtic described Tongaat Hulett as “a systemically important player in South Africa’s sugar value chain” and cautioned that its liquidation would severely impact jobs, small-scale growers and rural economies.
“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,” the department said.
Economic distress
It added that “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.”
Government said liquidation should only be considered as a last resort. “Government remains firmly of the view that 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,” the statement read.
In this context, the dtic said it believes 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.”
The department confirmed that it, 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.”
Broader policy objectives
It said government will intensify engagements with key stakeholders, including the Industrial Development Corporation (IDC), labour, growers, financiers, investors and affected communities to explore solutions to ensure the survival of the company and the long-term sustainability of the sugar sector.
According to the dtic, these engagements are guided by broader policy objectives, including protecting jobs and livelihoods in rural and peri-urban areas, safeguarding small-scale and emerging farmers, preserving industrial and agricultural capacity critical to food security and regional economies, and ensuring accountability and good governance.
The department reiterated that it will respect the independence of the courts and ongoing legal processes, while continuing to facilitate dialogue and support credible rescue initiatives.
“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,” the dtic said, adding that further updates will be provided as engagements progress.
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Compiled by Betha Madhomu
