Tongaat says Vision group to complete acquisition by December

HARARE – Tongaat Hulett Zimbabwe says it’s on the verge of a major transformation, characterised by fresh ownership and localised participation at shareholder level, which will ultimately pave the way for a significant shift in the company’s trajectory.

This comes after South Africa’s Competition Commission recommended the approval of the acquisition of Tongaat Hulett by a consortium of companies, including one founded by IT mogul Robert Gumede, which is under the Vision group.

Tongaat Hulett Zimbabwe CEO Tendai Masawi told FinX on the sideline of a media tour in Chiredzi, that there are new shareholders under the Vision Group, comprising four principal shareholders. The consortium is made up of Terris Sugar, a vehicle of Terris Fund, which invests in and operates local large-scale businesses, Gumede’s Pan-African diversified global business Guma, Mauritian-based investment holding company Remoggo, and Almoiz, one of Pakistan’s largest agribusiness companies. Moreover, the Mutapa Investment Fund has also committed to investing in the business, further bolstering its prospects.

“We were running a long process as Tongaat Hulett in South Africa when the business went under business rescue. The Zimbabwean business did not go into business rescue, but our parent company in South Africa did. The incoming Vision Group will bring new ownership. I’m informed that Mutapa Investment Fund will also invest in the business. These are the main shareholders we expect to add a new chapter to the business. The involvement of the Remoggo Group, a consortium of Zimbabweans, and the Mutapa Fund, brings an element of localisation,” Masawi said.

Mutapa, a portfolio investor, is seeking to invest in Tongaat at group level.

While the transition process is underway, Masawi emphasized that due process must be followed, adhering to all necessary statutory requirements. The company’s recent board meeting indicated that the new investors are expected to be in place by December, paving the way for a seamless transition.

“Due process must be followed, in compliance with the necessary statutory requirements, for the transition of the company from business rescue to new ownership. According to a recent board meeting, we were advised that the new investors should be in place, running the business 100%, by December,” he added.

Meanwhile, the company has set aside a capex budget of US$20 million to retool its operations, which includes the purchase of new machinery, with approximately 70% of the equipment being imported.

“This year, we are looking to invest close to US$18 million to US$20 million in the business. There is a programme in place that we will use for a certain number of years, after which replacement will be necessary,” Masawi said.

Tongaat Hulett Zimbabwe operations comprise of Hippo Valley Estates and Triangle Limited. It has six key units, sugarcane farming, milling, sugar refining, sugar packing and distribution, ethanol production and cattle ranching. The Triangle and Hippo mills have a combined capacity of 4.8 million tonnes of cane per year, producing 600 000t of raw sugar.

In terms of sugar volumes for FY2025, the company anticipates an increase ranging from 395,000 to 400,000t of sugar.” “Our total production for this year is approximately 370,000t, and we aim to produce 395,000 to 400,000t of sugar. Hippo Valley alone is expected to crush 1.6 million tonnes of cane this year, while Triangle is expected to crush approximately 1.7 million tonnes. The company does not anticipate any carryover of cane to the following year,” Masawi said.

Tongaat produced 375,000t last year from the two mills.

Additionally, the company expects revenue of US$382 million in FY2025.”

The company has cane growers, comprising approximately 1,200 private farmers who assist the company in growing sugar cane.

Harvesting of cane in Hippo Valley Estates in Chiredzi last week