Embattled agri-processing and property giant Tongaat Hulett is preparing to pull out of sugar farming as part of a turnaround plan that has seen the company issue 5 000 employees with retrenchment notices.
Tongaat is still finalising the steps it will take to stabilise itself in the face of massive losses caused by an auditing scandal, but it said last week that it had “identified the opportunity for the company to exit its direct sugar-cane farming activities in South Africa”.
Tongaat has already identified several estates that it will lease to black cane growers to keep land productive until the farms are sold for property development. It is not clear at this stage how long this initiative will be maintained for and at what point the company will sell its farms.
Next week management will meet with the unions operating at Tongaat’s milling operations to discuss the retrenchments, which have thus far affected mainly agricultural workers and staff employed in research and extension services.
Trading in Tongaat’s shares was suspended on the JSE and in London in June over the accounting irregularities, with the company delaying the release of its March results, while its results for several years were subjected to a forensic audit.
On Tuesday, Tongaat’s board extended its cautionary announcement to shareholders, saying it would announce a date for the release of the results only on November 18.
The 127-year-old company’s South African sugar operations cover 119 000 hectares of land, mainly in KwaZulu-Natal and Mpumalanga, with subsidiaries operating in Mozambique and Zimbabwe.
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