99-year lease for Tongaat Hulett

THE Government is planning to give Lowveld sugar producer Tongaat Hulett Zimbabwe a 99-year lease for its sugar cane growing business as part of measures to guarantee the South Africa-headquartered firm’s investments in the country.

The move is line with President Mnangagwa’s administration confidence building measures under the ongoing drive to promote investment and grow the economy in line with Vision 2030 of achieving an upper middle income economy.

Tongaat is one of Zimbabwe’s biggest private employer, with more than 20 000 permanent and contract employees.

The firm owns cane fields at Hippo Valley and Triangle in Chiredzi, which stretch over 25 000 hectares.

It also owns a sugar cane plantation at Mwenezana Estates in Mwenezi that straddle nearly 4 000ha.

According to the country’s laws, all land belongs to the State and Government is in the processing of issuing 99-year lease to guarantee security of tenure for those occupying the land as part of efforts to promote investment on the land and boosting productivity.

Tongaat has been appealing to Government to guarantee the firm’s security of tenure on its cane lands in the Lowveld and other fallow territories under its purview.

This, the firm reasoned, would enable it to commit more investments as it would be guaranteed of its future in Zimbabwe, while also enabled to use the lease as collateral to extract finance for expansion projects from banks.

Minister of State for Masvingo Provincial Affairs Ezra Chadzamira yesterday said Government, through the Ministry of Lands, Agriculture, Water and Rural Resettlement, was working on the Tongaat lease.

Lands, Agriculture, Water and Rural Resettlement Minister Dr Anxious Masuka last week toured the cane fields in Chiredzi to have an appreciation of the firm’s operations.

Minister Chadzamira disclosed that the tour was part of plans to give the sugar producer security of tenure for its cane growing business.

“Government is working on the issue of a 99-year lease for Tongaat, which owns cane plantations in Chiredzi and work on giving the firm that lease is currently underway, though there are no clear time-lines as to when they will be given the lease,” said Minister Chadzamira.

“The lease will basically serve as a confidence builder to the company so that they can also plan their long term investments with a guarantee that they will be on their land.”

Minister Chadzamira hailed Tongaat for the work it was doing to expand the sugar cane industry.

He singled out the US$40 million Kilimanjaro Sugar Cane Project at Hippo Valley as testament of the firm’s long standing commitment to Zimbabwe.

Tongaat is Zimbabwe’s sole sugar producer and the country owns the only two sugar cane mills at Hippo Valley and Triangle estates.

Zimbabwe produces an average of 455 000 tonnes of sugar annually, with 300 000 tonnes being consumed locally, while the remainder is exported, earning the country foreign currency.

Besides sugar, Tongaat produces ethanol and molasses for stock-feed.

Under project Kilimanjaro that is already underway, Tongaat is in partnership with four local leading banks to develop nearly 4 000ha of virgin land into cane fields.

The project is being rolled out on a cost recovery basis and upon completion, the cane fields will be subdivided into plots that will be allocated to indigenous Zimbabweans to empower them. It is envisaged that by 2023/24, Kilimanjaro will help Tongaat’s two sugar mills to operate near the 600 000 tonnes of sugar annually installed capacity.

This will make Zimbabwe a competitive global sugar producer, while also taking in nearly US$100 million in export of sucrose and related by products.