HARARE – The Zimbabwean government has been called upon to issue an urgent ministerial statement clarifying the implications of the financial crisis at South African sugar producer Tongaat Hulett Limited, amid growing concern over the potential impact on thousands of livelihoods in the Lowveld.
The call was made in Parliament by Zaka South Zanu-PF legislator Clemence Chiduwa, who raised a point of national interest last week following the company’s application for provisional liquidation after the collapse of its business rescue plan.
Tongaat Hulett is the parent company of Triangle Limited and holds an indirect controlling stake in Hippo Valley Estates Limited, two of Zimbabwe’s largest sugar producers.
Lawmakers warned that the possible liquidation of the South African parent company could have a devastating impact on the Zimbabwean operations, despite assurances that local activities would continue unaffected.
Chiduwa, who also chairs the parliamentary portfolio committee on Industry and Commerce Committee said the sugar industry anchors economic activity in key Lowveld centres such as Chiredzi and Masvingo, while also supporting surrounding rural communities.
The sector sustains more than 1,200 outgrowers and provides employment for an estimated 20,000 people, including workers, small-scale farmers and service providers.
He warned that if the South African courts grant a liquidation order, key assets could fall under the control of liquidators, potentially creating uncertainty for Zimbabwe’s sugar industry.
“It is said that the provisional liquidation does not affect Zimbabwe’s operations. Yet, as I have already said, Tongaat Hulett owns 100% of Triangle and Triangle owns 50.32% of Hippo Valley.
“If the South African High Court grants the liquidation order, the Triangle asset base may then fall directly under the control of the liquidators,” Chiduwa said.
“The likelihood of this happening is creating anxiety and uncertainty, given the likely domino effect on Triangle and Hippo Valley.
“Given the strategic nature of the sugar crop, I call upon the Minister of Industry and Commerce to issue an urgent Ministerial Statement on the status of Triangle and Hippo Valley.”
Tongaat Hulett applied for provisional liquidation earlier this month after its Business Rescue Practitioners concluded there was no reasonable prospect of saving the company.
The decision followed the collapse of a restructuring plan centred on the proposed acquisition of operating assets by Vision Sugar after key funding conditions were not met.
Tongaat Hulett was placed under business rescue in October 2022, with creditors approving a restructuring plan in January 2024. The plan, however, became unworkable after shareholders rejected a debt-to-equity conversion and the associated asset sale agreements later lapsed.
The company has indicated that operations in Zimbabwe, Mozambique and Botswana will continue despite the developments in South Africa.
Hippo Valley Estates last week issued a statement saying its Zimbabwean operations remain financially sound and operationally stable, noting that the provisional liquidation application related only to the South African parent company.
The Zimbabwean sugar estates are among the country’s largest private sector employers and play a central role in agricultural production, but analysts say the fate of the parent company remains a key risk factor for the sector.
