Thulaganyo Sethibe|Published
An estimated 250,000 livelihoods are at risk as sugar giant Tongaat Hulett faces a funding crisis.
KwaZulu-Natal police commissioner Lieutenant General Nhlanhla Mkhwanazi called a private meeting on Friday with the Tongaat Hulett management, Industrial Development Corporation, Zulu Royal Household representatives and sugarcane growers to discuss the company's salary cliff and November 3 JSE delisting date.
According to KZN SAPS spokesperson Colonel Robert Netshiunda, the meeting was prompted by fears that October's salaries would be the last paid out to staff members, with 250,000 jobs on the line.
Tongaat Hulett directly employs about 3,000 people in South Africa, but its value chain is vast. South Africa's sugar industry supports about 65,000 small-scale growers and 270,000 indirect jobs, mostly in KwaZulu-Natal.
When mills stop, growers cannot deliver cane, transporters stop, and rural towns collapse. The 250,000 figure cited by police reflects this entire ecosystem. The immediate trigger is funding. Tongaat Hulett has been operating on IDC post-commencement finance of R2.75 billion since 2023.
That facility was due to expire on September 30 and it has been operating on an unconfirmed extension since. Without it, the business rescue practitioners cannot meet payroll or pay growers for cane delivered.
Tongaat Hulett will be delisted from the JSE on November 3, ending a 74-year listing that began in 1952 as J.L. Hulett & Sons. It merged with Tongaat Group in 1982 to become South Africa's sugar giant, owning over 500,000 hectares under cane across Southern Africa at its peak.
Its decline was accelerated by a 2019 accounting fraud scandal involving seven of the company's executives, followed by Covid-19, floods in KZN in 2022 that damaged crops, and soaring debt. At its peak, Tongaat Hulett owed banks over R6.6bn. After entering business rescue in October 2022, its shares were suspended and have not traded since.
The IDC stepped in as lender of last resort to prevent liquidation after government opposed liquidation in February 2026, warning of severe consequences for workers and farmers. In June, the IDC, Vision Group and practitioners signed a binding rescue agreement that halted immediate liquidation.
Under Vision's plan, presented to King Misuzulu kaZwelithini on August 30 in Durban, the company would diversify beyond sugar. Robert Gumede told the king that Tongaat Hulett would produce ethanol for petrol blending, generate electricity from bagasse for Eskom and eThekwini, and convert carbon dioxide into medical oxygen.
He said the company spends R7bn a year, with 40% going to the king's subjects, and promised to grow the grower base from 17,500 to over 30,000, and to double jobs. The plan relies on South Africa's Sugar Master Plan signed in April, which targets a 4.5% ethanol blend in petrol using a 300,000-tonne sugar surplus.
The model is used in Brazil and India where mills are power producers. However, the Royal Household has since expressed concern. A letter from the king's private office to Trade Minister Parks Tau questioned whether promises would materialise and demanded transparency on the IDC's 25% transaction and promised worker and community shares approved by the Competition Commission.
thulaganyo.sethibe@iol.co.za
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