Tongaat Hulett liquidation move: SAFDA warns of severe impact on KZN farmers

The South African Farmers Development Association (SAFDA) has called for calm across the sugar industry following news that Tongaat Hulett Limited (THL) has filed for provisional liquidation.

In a statement, SAFDA stated that it had engaged directly with THL executives and reviewed official stakeholder communications, including the SENS announcement to the markets.

The association noted “with serious concern” the company’s application, which follows the lapse of sale agreements with Vision Sugar and failed funding negotiations with the Industrial Development Corporation (IDC).

“We thought we dodged this bullet in 2022 when THL entered Business Rescue instead of liquidation,” SAFDA said. “It was hoped that the business rescue process would turn around the fortunes of this company.”

Instead, the move to file for provisional liquidation has introduced fresh uncertainty for thousands of farmers and workers who depend on the company’s operations.

Widescale impact

Describing the scale of the impact, SAFDA said of the country’s 25,653 small-scale sugarcane farmers, around 60%, approximately 15,446 growers operate within THL’s catchment area in KwaZulu-Natal.

These farmers supply cane to three key mills:

• Maidstone Mill in Tongaat
• Amatigulu Mill in Gingindlovu
• Felixton Mill in Empangeni

In the season ending 31 March 2026, small-scale farmers delivered more than one million tons of sugarcane, generating about R845.7 million in revenue.

“What is at stake are the livelihoods of the small-scale farmers in particular,” SAFDA said, warning that the impact would extend to households, farm workers, and local enterprises in rural communities.

Commercial farmers, who produce 80% of the industry’s total sugarcane crop, would also be affected. THL accounts for 27% of the country’s total sugar production, making it one of the sector’s most significant market players.

Mounting industry pressures

The liquidation application comes amid broader pressures on the sugar industry. SAFDA pointed to cheap sugar imports “currently flooding our market” as a major concern.

Sugar imports up to December 2025 for the 2025/2026 season stood at 163,000 tons, a 155% increase compared to the same period in the previous season.

“These developments come at the back of other crippling factors battering our industry,” the association said, citing the Health Promotion Levy, rising production costs, and high US tariffs that threaten access to premium export markets.

SAFDA executive chairman, Dr Siyabonga Madlala, appealed for restraint and unity during the period of uncertainty.

Key discussions underway

The organisation said urgent discussions are currently underway with the relevant Ministers and key stakeholders to explore all possible interventions to prevent adverse outcomes that may result if the provisional liquidation process proceeds to a “point of no return”.

Madlala emphasised that the potential closure of Tongaat Hulett would have “devastating consequences not only for growers, farm workers, and rural communities, but also for the broader economy.”

SAFDA said it remains committed to protecting the interests of small-scale sugarcane growers and will continue engaging government, industry partners, and financial institutions to seek sustainable solutions.

“We urge our growers to remain calm, united, and focused as engagements continue,” the association said, adding that further updates would be provided once more clarity emerges.

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