Durban — The South African Canegrowers Association is expected to meet business rescue practitioners on Wednesday (today) as fears of job losses grow after Tongaat Hulett missed its payment deadline.
Thousands of livelihoods of the sugar-cane growers and workers delivering cane to the Felixton, Amatikulu and Maidstone mills in KwaZulu-Natal hang in the balance because of the delayed payment to growers for sugar-cane delivered in September.
SA Canegrowers chairperson Andrew Russell said the association would meet practitioners appointed to try to find a solution to the matter.
The concerns are that the non-payment will place the livelihoods of an estimated 14 642 permanent and seasonal farmworkers employed by these growers at risk.
Notably, this figure excludes contractors, haulier companies, input suppliers, mill workers and other service providers throughout the value chain who will also be affected.
“This is as a result of a recent meeting between the business rescue practitioners and the representatives of the growers impacted by the Tongaat Hulett board’s decision to enter into voluntary business rescue, which has placed the entire sugar industry and the jobs it sustains in a perilous position with thousands of jobs and livelihoods hanging in the balance,” Andrew said.
He added that he feared the prevailing situation might have dire financial consequences for growers as well as the farmworkers they supported.
“This could plunge thousands of growers and workers into destitution and raises the risk of unrest in KwaZulu-Natal’s rural cane-growing communities,” he said.
Among those who are affected are about 4 300 growers who delivered almost 600 000 tons of sugar cane to Tongaat Hulett mills in September, and were due to be paid more than R400 million by the end of October.
Tongaat Hulett said more than 4 000 of these are small-scale growers, who are especially vulnerable.
The company said it was important to stress that the viability of sugar industry was dependent on the survival of both large and small-scale growers, as the larger producers provided the bulk of the cane tonnage that is required to keep the mills running at 350 tons an hour and also cross-subsidise small-scale growers through a variety of financial support mechanisms.
The number of jobs at risk is likely to increase as uncertainty rises about whether growers who delivered cane in October will be paid on time.
For a number of small-scale growers, September marked their first deliveries of the season, and any default on these payments will have devastating impacts on their livelihoods, as well as the communities they support.
Questions also remain about how payments will be made for deliveries in October, November and December, which means the impact on growers is likely to worsen if the mills do not remain operational.
Although the sugar industry has been aware of Tongaat Hulett’s financial woes, the decision to enter into business rescue at this time has come without warning.
Because the surrounding mills in the province lack the ability to take on Tongaat Hulett’s deliveries, the decision also has serious short and long-term implications for the supply of sugar to the local market.
Tongaat Hulett added that an estimated R345m would become due for payment at the end of November to cover these sugar cane deliveries.
It is feared that the impact of the current situation is far-reaching and will be devastating.
Affected communities include the rural areas of Empangeni, Eshowe, Gingindlovu, Amatikulu, Darnall, KwaDukuza, Shakaskraal, Tongaat, Ndwedwe, Isinembe, Nyoni, Entumeni, Kwambonambi, Nseleni, Melmoth, Heatonville, Jozini and the Makhathini Flats, which already suffer from high levels of unemployment and poverty. While the current situation is dire, the sugar industry can still recover.
But for this to happen, it is essential that Tongaat Hulett secures the funding necessary to maintain its operations.
“As the SA Canegrowers, we are committed to working with Tongaat Hulett, 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.
“This will be the focus of tomorrow’s meeting between SA Canegrowers and the Business Rescue Practitioners, so that a speedy solution to the current situation can be found,” said Andrew Russell.
Daily News