Thousands of jobs at risk as sugarcane growers wait for millions

Tongaat Hulett Limited’s (THL) decision to go into voluntary business rescue has put more than 14 000 jobs on the line.

SA Canegrowers is set to meet business rescue practitioners (BRPs) on Wednesday to discuss the “perilous” position of thousands of livelihoods.

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Business rescue woes

Last week, THL announced two of its operations would be placed under business rescue.

The company has in recent years been rocked by allegations of mismanagement and financial misstatements, and currently has a debt burden of R6.3 billion.

Tongaat said its debt levels remained well in excess of what could be serviced and delays in its recapitalisation had worsened the situation.

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Missed payments

THL and BRPs missed the Monday deadline to pay growers for sugarcane delivered to Felixton, Amatikulu and Maidstone mills in KwaZulu-Natal in September. The amount owed to growers amounts to millions.

SA Canegrowers chairperson Andrew Russell said this included around 4 300 growers, who delivered almost 600 000 tonnes of sugarcane to various THL mills last month.

They were due to be paid in excess of R400 million by the end of October.

“More than 4 000 of these are small-scale growers who are especially vulnerable,” Russell said.

Large-scale growers provide the bulk of cane tonnage essential to keep mills running at 350 tonnes per hour.

He said the estimated 14 642 permanent and seasonal farm workers employed by large and small-scale growers run the risk of being without work as a knock-on effect of THL’s voluntary business rescue.

This figure does not include contractors, haulier companies, input suppliers, mill workers and other service providers throughout the value chain who will also be impacted.

And the number of jobs at risk is likely to grow while payments owed to growers continues to be defaulted on.

“An estimated R345 million will become due for payment at the end of November to cover these sugarcane deliveries,” Russell added.

A number of communities, many of which already plagued by poverty, stand to be affected. These include the rural areas of Empangeni, Eshowe, Gingindlovu, Amatikulu, Darnall, KwaDukuza, Shakaskraal, Tongaat, Ndwedwe, Isinembe, Nyoni, Entumeni, Kwambonambi, Nseleni, Melmoth, and Heatonville, Jozini and the Makhathini Flats, which already suffer from high levels of unemployment and poverty.

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‘Speedy’ solutions

All is not lost, however. Russell said while the situation was “dire”, the sugar industry could still recover.

“But for this to happen, it is essential that THL secure the funding necessary to maintain its operations.

“SA Canegrowers is committed to working with THL, the Business Rescue Practitioners, banks, government, and other industry stakeholders to ensure that we can reverse the current crisis and mitigate the impact on the workers and the rural economies that rely on the sugar industry for their livelihoods.

He said this would be the focus of the meeting between the association and BRPs, to find a “speedy solution” to the industry’s current woes.

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Compiled by Nica Richards.