Trade, Industry and Competition Minister Parks Tau has welcomed the withdrawal of the liquidation proceedings of sugar milling company Tongaat Hulett and praises stakeholders who worked to secure a viable path forward for one of South Africa's most important agro-industrial companies.

Tongaat Hulett is a strategic asset within South Africa's agricultural and manufacturing sectors. Its operations support thousands of direct and indirect jobs and underpin the economic wellbeing of communities across KwaZulu-Natal and other parts of Southern Africa.

The prospect of liquidation posed serious risks not only to workers and growers, but also to suppliers, transport operators, small businesses and the broader economy, he says.

The withdrawal of the liquidation application represents a significant milestone in safeguarding about 250 000 jobs, protecting rural livelihoods, preserving productive industrial capacity and securing the future of the sugar value chain.

Government welcomes the progress made by stakeholders in reaching an outcome that creates an opportunity for the business to continue operating while longer-term restructuring and stabilisation measures are implemented.

Further, the Portfolio Committee on Trade, Industry and Competition has also welcomed the agreement reached between the Industrial Development Corporation (IDC), the business rescue practitioners of Tongaat Hulett and the Vision Group, for Tongaat Hulett to exit business rescue and maintain its operations.

The committee says it welcomes the role played by the IDC to facilitate a solution that prioritises industrial capacity, economic stability and jobs preservation.

The committee also recognises the role played by the Vision Group in reaching an agreement that provides a credible path towards stabilising and rebuilding one of the oldest and most important companies in the Southern African sugar sector.

However, the committee says those responsible for the events that led to the company’s collapse, including potential fraud and corporate and financial misconduct, must be held accountable.

It further calls on the government to accelerate the implementation of the Sugar Value Chain Master Plan. The progress achieved under the first phase of the Master Plan has demonstrated that coordinated action between government, labour, growers and industry can deliver positive results, the committee states.

Additionally, it says some government interventions remain necessary, including protection against unfair sugar imports, support for small-scale growers, funding certainty and the development of a competitive biofuels industry, as well as securing more investment from the private sector, particularly for industry diversification.

It also calls on the IDC and the Vision Group to ensure broad-based black economic empowerment is embedded in the transaction to facilitate inclusion and real economic transformation.

The participation of sugarcane growers and workers must form an integral part of the future ownership and governance arrangements of the business. The long-term sustainability of the sugar industry depends not only on financial stability, but also on meaningful inclusion of those who daily contribute to the success of the company and the industry as a whole, the committee says.

“Government must continue to work with all stakeholders to secure the future of the industry, expand opportunities for growers and workers, and unlock new avenues for growth and diversification,” says committee chairperson Mzwandile Masina.

The committee will continue exercising oversight over developments at Tongaat Hulett and the implementation of the Sugar Value Chain Master Plan to ensure that jobs and the interests of workers, growers, communities and the broader economy remain protected, he adds.

Additionally, Employment and Labour Minister Nomakhosazana Meth also welcomes the agreement, which she says provides a clear and credible pathway towards stabilising Tongaat Hulett and securing the future of the sugar industry value chain.

“The agreement marks a turning point following a prolonged period of uncertainty. The decision by all parties to pursue a collaborative solution that preserves operations and protects value across the ecosystem is timely,” she says.

Further, the IDC extended post-commencement finance to Tongaat and has committed to restructuring this support into equity, which will strengthen the company’s capital structure and position it for sustainable recovery, she adds.

“The intervention by the IDC supports industrial capacity, safeguards jobs, and fosters inclusive economic participation. This intervention not only protects livelihoods but also ensures continuity in a strategic sector that underpins rural economies and regional trade,” says Meth.

The withdrawal of the liquidation application also clears the way for the implementation of the approved business rescue plan and reinforces the shared objective of stabilising the company and enabling its successful exit from business rescue, she notes.

Government will support initiatives that strengthen industrial resilience, protect jobs and promote investment in key sectors, such as agriculture and agroprocessing.

“The preservation of Tongaat Hulett is not only a corporate turnaround, but it is a critical step towards securing food systems, sustaining rural economies, and advancing economic transformation.”

Government will continue to work closely with all stakeholders to ensure the successful implementation of this agreement and to support the long-term stability and competitiveness of the sugar industry, Meth says.