Sugarcane business organisation SA Canegrowers will meet with the business rescue practitioners (BRPs) appointed to sugar producer Tongaat Hulett after Tongaat missed the deadline by which to make payment to growers for sugarcane delivered in September, says SA Canegrowers chairperson Andrew Russell.
SA Canegrowers says it is committed to working with Tongaat Hulett, the BRPs, banks, government and other industry stakeholders to ensure the current crisis is reversed and to mitigate the impact on the workers and the rural economies that rely on the sugar industry for their livelihoods.
"This will be the focus of [November 2's] meeting between SA Canegrowers and the BRPs so that a speedy solution to the current situation can be found," Russell says.
The nonpayment also places the livelihoods of an estimated 14 642 permanent and seasonal farm workers employed by these growers at risk. Notably, this figure excludes contractors, haulier companies, input suppliers, mill workers and other service providers throughout the value chain who will also be impacted.
The number of jobs at risk is likely to increase as uncertainty rises about whether growers who delivered cane in October will be paid on time. An estimated R345-million will become due for payment at the end of November to cover these sugarcane deliveries, he said.
About 4 300 growers delivered almost 600 000 t of sugarcane to Tongaat's mills in September and were due to be paid more than R400-million by the end of October. The majority of these are small-scale growers who are especially vulnerable.
However, it is important to stress that the viability of the sugar industry is dependent on the survival of both large and small-scale growers, as the larger producers provide the bulk of the cane tonnage that is required to keep the mills running at 350 t/h and also cross subsidise small-scale growers through a variety of financial support mechanisms, Russell highlights.
SA Canegrowers held a meeting on October 31 between the BRPs and representatives of the growers impacted by the Tongaat board’s decision to enter into voluntary business rescue, which has placed thousands of jobs and livelihoods in a perilous position.
"The impact of the current situation is far-reaching and will be devastating. Affected communities will include the rural areas of Empangeni, Eshowe, Gingindlovu, Amatikulu, Darnall, KwaDukuza, Shakaskraal, Tongaat, Ndwedwe, Isinembe, Nyoni, Entumeni, Kwambonambi, Nseleni, Melmoth, and Heatonville, Jozini and the Makhathini Flats, which already suffer from high levels of unemployment and poverty," he pointed out.
While the current situation is dire, the sugar industry can still recover. But for this to happen, it is essential that Tongaat Hulett secure the funding necessary to maintain its operations, Russell says.