South African group Tongaat Hulett has verbally communicated to workers at the Mafambisse sugar plant and to the Mozambican government that it will abandon activity in the region, said the unit’s union representative.
Mozambican newspaper A Verdade reported that more than 3,000 permanent jobs and thousands of other seasonal jobs in the Mafambisse sugar plant will be lost following this closure, as a result of the group’s financial problems in South Africa, where it has bank debt of about 11 billion rands (US$767 million).
The secretary of the Açucareira de Mafambisse plant union committee told the newspaper that the company’s management had only had the sugar cane cut for processing at the plant and had even stopped watering the plantation.
The group’s management informed shareholders at the end of May that the audited report and accounts for the 2018 financial year had to be “reviewed” as it did not reflect the financial situation correctly.
The South African financial press reported that Tongaat Hulett shares fell from 173 rands in 2015 to 53.17 rands in early 2019 and were priced at 13.50 rand before being suspended from the Johannesburg Stock Exchange and the secondary market of the London Stock Exchange, in the United Kingdom.
The group holds an 85% interest in Açucareira de Mafambisse and 88% in Açucareira de Xinavane, both in Mozambique.
The Mafambisse unit, originally built in 1965 and recovered in the late 1980s at a cost of about US$50 million, is located near the Pungwe River in the Dondo district of Sofala province.
The Tongaat Hulett group began managing the sugar plant in 1996, and two years later acquired a 75% stake owned by the Mozambican state and in 2008 increased that stake to 85%. (Macauhub)