Trade, Industry and Competition Minister, Parks Tau has welcomed the withdrawal of the liquidation proceedings against Tongaat Hulett and commended all stakeholders who worked tirelessly to secure a viable path forward for one of South Africa’s most important agro-industrial companies.
“The withdrawal of the liquidation application represents a significant milestone in safeguarding around 250 000 jobs, protecting rural livelihoods, preserving productive industrial capacity and securing the future of the sugar value chain,” the Minister said in a statement on Wednesday.
This as Parliament’s Portfolio Committee on Trade, Industry and Competition also welcomed the agreement reached between the Industrial Development Corporation (IDC), the business rescue practitioners of Tongaat Hulett and the Vision Group, for Tongaat Hulett to exit business rescue and maintain its operations.
Tongaat Hulett is a strategic asset within South Africa’s agricultural and manufacturing sectors.
Its operations support thousands of direct and indirect jobs and underpin the economic wellbeing of communities across KwaZulu-Natal and other parts of Southern Africa.
The Minister said the prospect of liquidation posed serious risks not only to workers and growers, but also to suppliers, transport operators, small businesses and the broader economy.
“Government has consistently maintained that every lawful effort should be pursued to secure a sustainable and durable solution for the company. We therefore welcome the progress made by stakeholders in reaching an outcome that creates an opportunity for the business to continue operating while longer-term restructuring and stabilisation measures are implemented,” Tau said.
In addition, the Minister acknowledged the role played by the Industrial Development Corporation (IDC), industry stakeholders, organised agriculture, labour and all other parties who remained committed to finding a constructive solution under extremely challenging circumstances.
The Portfolio Committee said the outcome of the agreement is what it called for.
“The committee welcomes the demonstration of decisive leadership by the IDC. At a time when uncertainty threatened the future of Tongaat Hulett and the broader sugar industry, the IDC stepped forward to facilitate a solution that prioritises industrial capacity, economic stability and jobs preservation.
“The committee also recognises the role played by the Vision Group in reaching an agreement that provides a credible path towards stabilising and rebuilding one of the oldest and most important companies in the southern African sugar sector,” said the committee in a statement.
While welcoming the agreement, the committee emphasises that the rescue of Tongaat Hulett must be accompanied by accountability for the events that led to the company’s collapse. The committee remains firmly of the view that individuals responsible for fraud, and corporate and financial misconduct at the company must face the full consequences of their actions.
The committee also reiterated its call on the government to accelerate the implementation of the Sugar Value Chain Master Plan.
“The progress achieved under the first phase of the Master Plan has demonstrated that coordinated action between government, labour, growers and industry can deliver positive results. However, it is important to note that challenges remain which require the government’s interventions, including protection against unfair sugar imports, support for small-scale growers, funding certainty and the development of a competitive biofuels industry; and investment from the private sector, particularly for industry diversification, “said the committee.
This article first appeared on SA News. Find it here.
Photo by Victoria Priessnitz on Unsplash
Relevant Agribook pages include “Sugarcane.” The Business Listings below comes from that page.
