Agriculture Minister John Steenhuisen has voiced deep concern over the mounting crisis in South Africa’s sugar industry, warning that the ongoing liquidation of Tongaat Hulett is creating severe uncertainty for the operation of critical sugar mills just weeks before the start of the April crushing season. The collapse of Tongaat Hulett – one of the country’s largest sugar producers – risks disrupting cane crushing at several key mills in KwaZulu-Natal, including Amatikulu, Maidstone and Felixton.
Industry leaders estimate that closure of these facilities could leave tens of thousands of hectares of cane without processing capacity, severely impacting both large-scale and small-scale growers who rely on nearby mills due to the high cost and limited distance viability of transporting cane.Speaking on the matter, Minister Steenhuisen emphasised the broader economic and social implications:“The sugar sector is not just an agricultural industry – it is the lifeblood of entire rural communities in KwaZulu-Natal and Mpumalanga. The potential loss of milling capacity threatens the livelihoods of thousands of direct and indirect jobs, from cane growers to transport operators, mill workers and supporting businesses. We cannot allow bureaucratic delays or unresolved liquidation processes to push viable cane fields into abandonment ahead of the new season.”
The minister highlighted that the industry already faces intense pressure from surging cheap imports (primarily from Brazil, India, Guatemala and Thailand), which have displaced local sugar in retail and manufacturing markets. Combined with the Tongaat uncertainty, the sector is at risk of irreversible damage.
Steenhuisen confirmed that his department is working closely with the South African Sugar Association (SASA), SA Canegrowers, and other stakeholders to explore contingency options, including possible temporary arrangements with neighbouring mills and accelerated support for the Sugar Industry Master Plan (Vision 2030). The plan aims to diversify into bioeconomy products such as bioethanol and sustainable aviation fuel while advancing black and women ownership and protecting jobs.He also reiterated calls for urgent reform of the dollar-based reference price (DBRP) mechanism – currently set at US$680 per tonne since 2018 – to better shield local producers from subsidised imports. SASA’s application to raise the DBRP to US$905 per tonne remains under review by the International Trade Administration Commission (ITAC).
The minister urged all parties involved in the Tongaat liquidation process to prioritise continuity of milling operations to safeguard the 2026 crushing season and prevent widespread economic devastation in sugar-dependent rural regions.“Time is running out,” Steenhuisen warned. “We need decisive action now to protect this strategic, labour-intensive agro-industry and the communities that depend on it.”
Tongaat Hulett, a historic 134-year-old South African sugar producer, is heading toward liquidation after its business rescue process failed in early 2026. The company first entered business rescue (South Africa's form of bankruptcy protection/restructuring) in October 2022, and the rescue plan ultimately became unimplementable, leading business rescue practitioners (BRPs) to apply for provisional liquidation in February 2026.
Tongaat Hulett’s downfall began with a massive accounting scandal in 2019 that exposed severe irregularities, inflated profits, falsified accounts, and manipulated targets under former management—often to trigger executive bonuses. The fraud destroyed about R12 billion in shareholder value, wrecked the balance sheet, shattered credibility, and cut off funding access.The company had already built unsustainable debt (peaking around R12 billion by 2018) through over-expansion into property development (initial cash generator that later stalled), excessive borrowing in a low-debt industry, and ongoing pressures from rising costs and market challenges.In October 2022, Tongaat entered business rescue. An approved plan relied on asset sales, refinancing, and a proposed buyout by the Vision consortium backed by complex funding deals and escrow arrangements.
By early 2026, these collapsed: Vision refused an unconditional extension, funding talks (including with the IDC) failed, and key conditions weren’t met. The business rescue practitioners concluded rescue was impossible, leading to a provisional liquidation application on 7 February 2026.The crisis is mainly South African, driven by local debt, governance failures, and market conditions; operations in Zimbabwe and elsewhere remain unaffected. The collapse threatens thousands of jobs and rural livelihoods in KwaZulu-Natal’s sugar belt, leaves cane growers (especially small-scale) without milling capacity, and adds pressure to an industry already hit by cheap imports, the health promotion levy, and structural issues.
Despite years of rescue efforts, the failure to secure funding and finalise a sale sealed Tongaat Hulett’s fate in 2026.
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