Tongaat crisis: Small farmers get money for Sept, but 300 bigger growers left unpaid

Small-scale farmers who supply the Tongaat Hulett mills at Felixton, Amatikulu and Maidstone in KwaZulu-Natal have now been paid for sugar cane delivered in September.

The company, which was placed in business rescue on October 27th, missed a deadline to pay R401 million for cane delivered by about 4 300 growers.

But some 300 commercial growers have not yet been paid, according to the association. This is putting almost 15 000 jobs at risk as these farmers employ the vast majority of the area’s cane farm workers, it said in a statement on Saturday.

Tongaat entered business rescue after disagreeing with lenders about its restructuring plan. The group has a debt burden of more than R6 billion.

The association raised concerns about Tongaat Hulett’s ability to “make timeous payments of more than R345 million at the end of November for the more than 570 000 tons of cane delivered in October.”

“It is also critical that clarity is provided on plans for the remainder of the season, and to try to secure the future of Tongaat Hulett for the sake of the thousands of livelihoods dependent on cane growing in the north coast of KwaZulu-Natal.”

The association is in negotiations with Tongaat’s business rescue practitioners to prioritise payments to commercial growers, which will enable payments to other companies including contractors, haulier companies and input suppliers.

Tongaat, the country’s largest sugar producer, has been hit by an accounting scandal with accusations that it inflated its financial position by R12 billion from 2011 to 2018. Its shares are currently suspended on the JSE.-ebusinessweekly