Tongaat Hulett invests R460 million in off-season maintenance ahead of upcoming 2025/26 sugar season
14 March 2025
Tongaat Hulett invests R460 million in off-season maintenance ahead of upcoming 2025/26 sugar season
Tongaat Hulett Limited (THL) is prepared for the upcoming 2025/26 sugar season, with all operations set to open and run smoothly as scheduled in April and early May.
As part of THL’s commitment to operational excellence, extensive off-season maintenance and investment to the value of R460 million was undertaken over the past few months across the company’s Maidstone, Amatikulu, and Felixton mills along with its central refinery in Durban and the Voermol animal feeds facility.
As a result, the company will be ready to welcome sugarcane deliveries from growers ensuring a strong start to what promises to be a productive season.
As the industry navigates ongoing threats including declining global sugar prices, job losses due to the sugar tax, and insufficient import tariffs resulting in increased volumes of imported sugar, THL remains focused on ensuring a seamless and efficient milling process, supporting growers, and sustaining the broader sugar community.
THL remains a key economic contributor in South Africa, supporting thousands of jobs and farmers in KwaZulu-Natal. The company’s South African operations contribute around R9.3 billion to the country’s GDP each year and it directly employs over 2,600 people – supporting more than 25,500 jobs in communities surrounding its three mills, refinery and animal feeds plant. More than two-fifths (43%) of the sugarcane processed by THL mills is sourced from 15 000 black cane growers and cooperative members with these farmers collectively paid around R500 million each year.
At the same time, the ongoing business rescue process is firmly on track and moving steadily towards substantial implementation. The post commencement financing from the Industrial Development Corporation (IDC) has been fundamental to this success, ensuring the company has remained operational during the business rescue process.
Most critically, the IDC’s funding ensured crucial off-crop maintenance on the mills and refinery could continue over the past three financial years. This saw THL allocating a total of R1.425 billion to strengthening its infrastructure, ensuring reliability and efficiency in production:
- 2022/23: R472 million
- 2023/24: R493 million
- 2024/25: R460 million
This investment underscores THL’s dedication to maintaining world-class facilities and enhancing operational performance for the benefit of growers, employees, and industry stakeholders.
The off-season maintenance has included significant infrastructure investments across all three mills. In addition to general maintenance, nearly 40% of the budget has been allocated to boiler improvements, enhancing steam efficiency, ensuring consistent factory performance, and addressing environmental compliance. Around 30% has been directed towards Front-End equipment to improve sugar extraction from cane, while the remaining funds have been invested in Back-End processing and service areas of the plants.
Finally, in line with the legally binding business rescue plan, which incorporates the transaction with the Vision Parties and was adopted by over 98% of creditors on 11 January 2024, the closing of the South African sale of assets transaction is drawing ever closer.
This will mark a significant step toward securing the long-term sustainability of the operations and towards the successful implementation of the business rescue plan. The business rescue process has provided a critical lifeline to all stakeholders invested in the rehabilitation and long-term survival of the business, people and assets of Tongaat Hulett, and avoided the devastation that liquidation in October 2022 would have wrought on local communities, the broader industry and the economy.
As the 2025/26 sugar season begins, we look forward to working closely with our growers, employees, and industry partners to build a more resilient and competitive sugar sector. With continued investment in infrastructure, operational efficiencies, and strategic partnerships, THL is well-positioned to drive sustainable growth and innovation in the industry.
