Andrew Russell, Chairman of SA Canegrowers. tells the OFM Business Hour there is a great deal of uncertainty for the sugarcane growers that deal directly with the mills that are under business rescue.

For one they are wondering if there will be a mill in future to accept their sugarcane; and should their sugarcane be accepted by the mills, will the growers receive compensation for their work? All this uncertainty does not bode well for the sector at the moment he stresses. 

Russell was on the show following a KwaZulu-Natal High Court Judgment that vindicated the South African Sugar Association (SASA) with respect to industry fees that Tongaat Hulett’s business rescue practitioners view as contractual and not obligatory. The piece of legislation in contention is the Sugar Industry Agreement which falls under the Sugar Act and is therefore – according to industry bodies - obligatory and not optional. 

#TongaatHulett’s efforts to evade #sugarindustry obligations and payments during #businessrescue have been dismissed by the Durban #HighCourt. Read more about this significant judgment here: https://t.co/JAWTAOwFp9 ??

— SA Canegrowers (@sa_canegrowers) December 7, 2023

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According to Russell “what this means practically, is that the Business Rescue Practitioners (BRP’s) at Tongaat Hulett and Gledhow cannot suspend the obligation to pay more than R1.5 million that was due to SASA at the end of March 2023, and which was not paid at the time due to the BRP’s contention that the business rescue process took precedence over industry arrangements. The substantive basis for the dismissal of the application is a welcome outcome for the ongoing sustainability of the sugar industry. This judgment brings the industry one step closer to a resolution of this critical industry matter. It does not, however, put the matter to bed”.

Since the aforementioned judgment was delivered more applications to interdict Tongaat Hulett’s BRPs from meeting with creditors were lodged in the High Court.

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Despite the ongoing discord, the SA Canegrowers chairman maintains liquidation of Tongaat Hulett remains the worst-case scenario and is hopeful that the BRPs can amicably work alongside industry bodies to save the company. 

Previously on the OFM Business Hour Russell said that that the country is nearly three years into the Agriculture and Agro-Processing Master Plan (AAMP) under the auspices of the Department of Trade and Industry (DTI) as well as the Department of Agriculture. Whilst some of the plans are starting to come to fruition, this progress he believes is brought to a halt by the focus that is directed to the continued financial crisis at Tongaat Hulett and other milling companies. 

OFM Business Hour